The NCAA canceled all men's and women's tournaments on March 15 due to the COVID-19 outbreak. This meant that March Madness would not be taking place. Another repercussion is that athletic directors of Division I schools are preparing for the NCAA being unable to cover all of the lost revenue.
Speaking with USA Today on the condition of anonymity, multiple athletic directors mentioned that there will likely be a reduction of the scheduled distribution of $600 million to Division I schools and conferences this spring. The ADs did not know the exact amount at the time of the interviews, but the NCAA relies on March Madness for nearly all of its $1.1 billion in normal annual revenue. "The economics of all this could definitely be extensive," one AD told USA Today.
The association depends on the basketball tournament for nearly all of its roughly $1.1 billion in normal annual revenue.
During a fiscal year ending Aug. 31, 2020, the NCAA had been scheduled to collect $827 million just from its long-term multimedia and marketing rights agreement with CBS and Turner, according to the association's recently released audited financial statement. That statement attributed $170 million in non-CBS/Turner revenue for fiscal 2019 to "championships and NIT tournaments," with a sizable portion of that likely coming from the men's basketball tournament.
According to Bloomberg, the NCAA will be distributing about $225 million to schools this year. This is roughly 37 percent of its original projection. The NCAA board of governors had projected for $600 million dispersed through a mix of grants and payouts based on athletic performance, academic performance, and scholarship funds.
The board of governors reportedly voted to approve the disbursement on Thursday. Of the $225 million, $50 million will be paid out of the NCAA's reserve funds. The remaining funds are from a line of credit. The association has a canceled events insurance policy worth $270 million.
There are concerns about the shortfall impacting several Division I schools. These universities rely on the NCAA's funds to assist in personnel decisions, facilities projects, and offered sports.
The fans of college athletics have been missing March Madness, as well as multiple other sporting events, and have been rewatching classic games from past tournaments. This didn't entirely fill the void left by the canceled events, but the fans also understood the safety and health concerns that led to the men's and women's tournaments being called off.
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