Almost all of Division I is in financial trouble. Leaves and layoffs, pay cuts, and travel and expense deductions are some of the tools used to try to balance a fiscal year 2021 budget with minimal income but many fixed expenses. It’s ugly.
When the Power 5 created the College Football Playoff in 2014, media dollars poured in, to the tune of $450 million a year. Over the past six years, $2.7 billion has filled their coffers, leaving the rest of Division I in the dust as they try to stay competitive.
Yet some of these same behemoth schools are dropping out of the sport. I’ve written about the challenges faced by schools that resorted to budget cuts in 2020, such as Stanford Universitythe University of Iowa and the University of Minnesota. You know it’s bad when the richest schools bail out.
But it’s even worse for non-Power 5 programs which, if the big schools are swimming in debt, are drowning in it. Schools like William and Mary, George Washington University, LaSalle University, Boise State University, and the University of Connecticut raised their hands and said they could no longer have such a broad program. Many fans and sports managers want someone – anyone – to throw them a lifeline.
Well, someone did. Last week the Knight Commission on Intercollegiate Athletics (KCIA) hosted a webinar that explained, in detail, how the NCAA’s March Madness revenue distribution formula could be modified to create more revenue for non-Power 5 football schools. They found a way to redirect legally $61 million to $65 million to non-Power 5 programs, which could save athletic opportunities for hundreds of athletes.
The Knight Commission sponsored a to study by CliftonLarsonAllen of Finance on how FBS football teams benefit disproportionately from the current NCAA formula. The takeaway is this: up to $65 million could be redistributed as early as next year, which would help achieve the NCAA’s stated goals of increasing opportunities for all athletes and addressing issues. of diversity facing college sports. A win-win, right?
To find out more, I spoke with Knight Commission member and longtime NCAA basketball analyst Len Elmore about where the idea came from. “The financial and economic structure of NCAA athletics has not been threatened as it is now,” he explains, referring to the Covid-19 pandemic. “We ask the NCAA to stay true to its essential formula and only count (athletes) in sports that compete in a national championship (under the NCAA umbrella).
“The College Football Playoff controls the revenue associated with FBS football,” not the NCAA, he continues. “That money could ultimately go to schools which could definitely use it to create more opportunities.”
Originally, the NCAA tried to incentivize large-scale programs by rewarding athletic programs that offer at least 150 athletic scholarships. Because football at the FBS level requires 85 scholarships, these programs automatically had a head start.
When the College Football Playoffs were created in 2014, all revenue was separated from the NCAA, going exclusively to FBS conferences. But they “still receive substantial financial and administrative support from the NCAA, which manages all national operational costs, including player eligibility, health and safety, insurance, litigation and legal settlements,” according to a report. press release from the Knight Commission.
At a time when sports budgets exceed $100 million, an extra million from the NCAA’s annual distribution funds could be the difference between saving or abandoning an Olympic sport. It seems only fitting that a rule that was originally intended to promote opportunities should, under the KCIA proposal, do just that.
In a year with only sporadic good news, it seems like a no-brainer for the NCAA to adopt.
Disclaimer: I am a consultant to the Knight Commission.