Yahoo Finance NCAA reveals budget, revenue gulfs between men’s and women’s basketball tournaments
The NCAA on Friday acknowledged for the first time that its budget for the Division I men’s basketball tournament is nearly twice its budget for the women’s tournament.
But in a summary of financial data first provided to The New York Times and ESPN, and later obtained by Yahoo Sports, the NCAA attempted to justify that budget disparity, and said that its 2019 women’s basketball tournament lost $2.8 million, the “largest loss of any NCAA championship” event.
The NCAA released figures for its 2019 basketball tournaments, the last ones unaffected by the pandemic, amid uproar over inequities between its 2021 men’s and women’s tournaments. Figures for the 2021 tournaments are expected to be relatively similar.
The 2019 men’s tournament, the NCAA said, generated $917.8 million in revenue, and $864.6 million in net income. The 2019 women’s tournament, it said, generated $15.1 million in revenue, and that $2.8 million in net losses.
The revenue gulf is largely attributable to TV contracts. CBS and Turner pay the NCAA roughly $900 million per year to broadcast the men’s tournament. ESPN pays the NCAA roughly $36 million per year to broadcast 24 other NCAA championships, including the women’s basketball tournament. Kathleen McNeely, the NCAA’s chief financial officer, told The New York Times that women’s basketball accounts for 15.9% of the ESPN contract’s value, per a third-party assessment. That would make the women’s basketball tournament’s TV rights worth roughly $5.7 million per year.
Experts, though, question that assessment. "I don't think there's anything scientific about that percentage," Andrew Zimbalist, an experienced sports economist, told Yahoo Sports. "Off the cuff, it strikes me – it's gotta be much larger than that."
The revenue gulf also accounts for ticket sales. Exact financial breakdowns, however, were not provided. The NCAA, as a nonprofit organization, is required to release audited financial statements annually, but those statements also keep the revenue and expense breakdowns somewhat vague.
The NCAA’s summary also does not clarify whether its budget figures encapsulate marketing and promotional expenses, or whether they simply represent the costs of operating venues and accommodating participants. The net income calculations factor in “both direct and indirect expenses,” it said, but the differences between revenue and net income – $53.2 million for the men’s tournament – are far greater than the budget figures ($28 million for the men).
How NCAA parses budget disparity
The NCAA said that structural differences between the two tournaments accounted for $7.1 million of the $13.5 million budget disparity. Those differences included:
Women’s first- and second-round games are, in non-pandemic times, played at campus sites, rather than neutral sites, and therefore require less travel. Reductions in travel and per-diem expenses associated with that difference totaled $4.4 million, the NCAA said.
Staging the First Four – a preliminary round that the women’s tournament does not have – costs the men’s tournament $1.1 million.
The NCAA usually holds the women’s Final Four in a basketball arena, and holds the men’s Final Four in a football stadium with more than three times the capacity. Converting the football stadium into a basketball venue costs about $1.6 million per year, whereas women’s basketball “build-out costs” are roughly $20,000, according to the NCAA.
The NCAA interprets this to mean that the true budget disparity is around $6.4 million.
Marketing imbalance may play role
But it’s unclear what exactly the budget is for, and whether it includes, for example, digital advertising. (An NCAA spokeswoman did not immediately respond to a question asking for clarification.) "It's clear what they are including is operational costs," Zimbalist, the sports economist, said. "To what extent that includes short-term marketing resources as well, I'm just not sure. I doubt that includes longer-term marketing resources."
Coaches, fans and media have called out the NCAA for its underpromotion of the women’s game. Its uber-popular “March Madness” brand, for example, is used exclusively to promote the men’s tournament. The NCAA last weekend lied to the Wall Street Journal when asked why. It initially said that “women’s basketball leadership … chose to pursue their own brand identity,” then admitted that statement was inaccurate.
The men’s basketball tournament accounted for roughly 82% of the NCAA’s $1.1 billion in 2019 revenue, according to Friday’s summary and the NCAA’s financial statements. “The men’s basketball tournament pays for nearly every other NCAA championship across all divisions,” the NCAA wrote in its summary. The only others that generate a profit, it said, were Division I championships in baseball, men’s ice hockey, men’s lacrosse and men’s wrestling.
Marketing experts, economists and advocates, however, question the NCAA’s accounting; and they argue that if the NCAA promoted the women’s basketball tournament as much as, and on equal footing with the men’s tournament, the popularity and value of the women’s tournament could soar. The gulf in revenue is a function of the gulf in investment, not merely a reason for it.
"If they decide to treat the women's tournament as inferior, and as small potatoes, as something that's not going to pay off for them," Zimbalist said of the NCAA, "they're just going to keep repeating their experience and their failure."
The budget figures also presumably do not account for the fact that the NCAA awarded schools and conferences a total of $168.5 million in 2019 for their performances at the men's basketball tournament. The revenue distribution scheme incentivizes investment in men's basketball. No such "Basketball Performance Fund" for the women's tournament exists.
The NCAA itself is not beholden to Title IX. But all its member schools are. And Title IX, Zimbalist explained, "says that it doesn't really matter how much money is generated by women's sports and men's sports, women are entitled to equal treatment."
"If anything," Zimbalist continued, "one could make the opposite argument. One could say that women deserve more resources, to try to equalize their popularity with the men."
The NCAA, after apologizing last week for inequities between the men’s and women’s tournament, announced Thursday that it had hired a law firm to “evaluate our practices and policies” with respect to gender equity.
“The NCAA will continue to aggressively address material and impactful differences between the Division I Men’s and Women’s Basketball Championships,” NCAA president Mark Emmert said in a statement. “While many of the operational issues identified have been resolved, we must continue to make sure we are doing all we can to support gender equity in sports. As part of this effort, we are evaluating the current and previous resource allocation to each championship, so we have a clear understanding of costs, spend and revenue.”
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