NCAA revenue shortfall will force athletic directors to make tough decisions
Thursday’s big story in college sports was the NCAA’s announcement that instead of a projected $600 million distribution to Division I schools, the Board of Governors voted unanimously to distribute $225 million.
The reason for the shortfall is the lack of an NCAA Men’s Division I Basketball Tournament. The NCAA relies on ticket sales, sponsorships and television rights for most of its revenue. And this year’s tournament was canceled in the wake of the coronavirus pandemic.
“We are living in unprecedented times not only for higher education, but for the entire nation and around the globe as we face the COVID-19 public health crisis,” said Michael V. Drake, chair of the board and president of The Ohio State University. “As an Association, we must acknowledge the uncertainties of our financial situation and continue to make thoughtful and prudent decisions on how we can assist conferences and campuses in supporting student-athletes now and into the future.”
The NCAA will use $50 million in reserve. It said it also has a $270 million event cancellation insurance policy, and the proceeds will be used to “pay off a line of credit that will cover the remaining distribution within 12 months.”
What does this mean for schools like Kentucky? Big 12 Commissioner Bob Bowlsby said on a teleconference Thursday that the revenue is about $14 million less than what the league had expected. It is the conference that distributes the money to its members. SEC schools were to receive $44.6 million payouts this year, but that figure will be downgraded thanks to the loss of spring sports and the NCAA shortfall.
Arkansas AD Hunter Yurachek had already told his school’s Board of Governors that revenue would be down $2 million to $3 million this year after cancellation of the SEC Men’s Basketball Tournament and spring sports. Wyoming AD Tom Burman told Sports Illustrated his school would be down $1 million. “It’s scary,” he said.
In other words, expect to see some financial cuts at schools like UK. And athletic programs will be in a tough spot with ticket prices. With the current economic uncertainty, can they raise ticket prices to try and bridge the financial gap? Will some sports be cut? Will ADs be forced to take a harder line on future coach’s salaries?
UK football ticket sales adjustments
Just this week UK AD Mitch Barnhart said in a release that the school was making some changes on football ticket sales because of the pandemic:
▪ Extended the season ticket renewal due date by three weeks to Friday, May 1.
▪ Updated the three-month payment option to now extend until June 26, with first payment due by May 1.
▪ All payment plans have been extended by three weeks to allow for more flexibility. For ticket holders currently on a football payment plan, no charges will be made on April 10, May 8 and June 5 as previously scheduled. The new installment dates will now be May 1, May 29 and June 26, respectively.
▪ The seat upgrade process will be delayed until mid to late May. As a reminder, if fans are interested in moving your seats, they are welcome to call (800) 928-2287 (option 1) to check on current availability.
▪ With the UK Ticket Office currently closed for in-person business, fans are encouraged to renew your tickets online through your My UK Account or by phone at (800) 928-2287. UK will continue to pick up and process mail several times per week.
Some interesting links
▪ USA Today’s Dan Wolken asks if the party over for college athletics. “In a sense, college athletics is no different other sports and entertainment businesses, all of which will face various levels of uncertainty in the post-coronavirus pandemic world. But what made college athletics different, particularly in the last several years, is how much of its growth was fueled by philanthropy and invested in luxuries that were primarily designed to appeal to recruits.”
▪ USA Today’s Nancy Armour writes that the next time billionaire owners coming looking for handouts, cities should remember that they laid off employees during the pandemic. “While there is a discussion to be had — and a long overdue one, at that — about the obscene income disparity that exists in our country, this isn’t simply about fairness. These owners, and all their other cronies in the billionaire boys club, owe it to the public to not add their employees to the growing list of Americans now dependent on public resources and services just to keep their heads above water.”
▪ Earlier this week, Mike Bianchi of the Orlando Sentinel talked to Florida AD Scott Stricklin, who told him, “For right now, it’s all manageable,” Stricklin says of the coronavirus pandemic that has shut down sports, “but the question your mind goes to really quickly is if this lasts into another school year. From a financial standpoint, if we’re not playing football games in the fall, it will shake the foundation of college athletics. As everyone knows, football pays for the enterprise to go forward.”
▪ On the flip side, New Orleans Saints quarterback Drew Brees and his wife Brittany pledged $5 million to the coronavirus relief efforts in Louisiana. Brees plans to deliver 10,000 meals per day through their various business interests to needy families.
This story was originally published March 27, 2020 at 8:08 AM.
