Yahoo Finance Report: NCAA revenue falls by $600M in 2020 after NCAA tournament cancellations
The NCAA experienced a $600 million drop in revenue for the 2020 fiscal year, new documents acquired by USA Today show. It’s due largely in part to the cancellation of the 2020 Division I men’s basketball tournament and shows why the NCAA is pushing forward with the tournament this year.
It’s a drop of more than 50% in revenue compared to the 2019 numbers.
Why did NCAA lose $600 million?
Though it had $270 million from event cancellation insurance and spent about $473 million less than the previous year, the NCAA still had a loss of nearly $56 million for the fiscal year that ended in August, per the New York Times.
It had a $700 million decline in television and marketing rights revenue, USA Today reported. The loss was almost all contributed to the multimedia and marketing rights contract with CBS and Turner for the monthlong Division I men’s basketball tournament.
The 2019 numbers for that revenue were at $868 million and its overall agreement with the stations is for $8.8 billion over eight years with more than 90 percent “used to benefit college athletes through programs, services and direct distribution to member conferences and schools,” per the NCAA.
The NCAA took out a $125 million credit line with PNC Bank on May 1, 2020, per USA Today, but as of Aug. 31, 2020, there was no outstanding amount.
NCAA overall revenue in 2019
The NCAA first surpassed $1.1 billion in revenue in the 2017 fiscal year. In 2019, it had $1.1 billion in revenue and recorded a profit of $71 million. Its net assets at the end of the year were $450 million, per the Times.
Weeks after canceling the 2020 NCAA tournament, the organization announced it would distribute $225 million to its Division I members in June. That’s a drop from the projected $600 million number it had before COVID-19 and from the $611 million sent out in 2019, per USA Today.
NCAA goes forward with 2021 March Madness
The NCAA delayed the start to the 2020-21 Division I basketball seasons and has continued on with a shortened schedule even as teams have paused because of positive COVID-19 tests.
The men’s and women’s tournaments are still on as scheduled with slight modifications. They will each take place entirely in a bubble environment rather than at different locations across the country.
Some coaches on both the men’s and the women’s side have voiced concern that the “almighty dollar,” in Baylor women’s coach Kim Mulkey’s words, is more important than player safety. UConn women’s head coach Geno Auriemma answered by saying it unfortunately is the reality of the situation.
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