NCAA Didn’t Have To Pay Fewer Dollars With March Madness Being Canceled
$225 million will be sent to schools.
Some schools will have financial issues.
The NCAA Tournament being canceled due to COVID-19 nearly shutting down is costing NCAA schools a whole lot of money. March Madness brings in the bulk of the $1.1 billion for the NCAA.
The NCAA was scheduled to pay out $600 million but instead a paltry $225 million is being sent out with no Division 1 tournament.
This is going to be a huge hit for programs that are not in a Power 5 football league. The Big 12 was looking at $24 million for its league which is $2.4 million per school but that league can handle it.
For a better example, take a look at football power Clemson whose NCAA tournament revenue is generally right around two to three percent of its annual athletic budget, this year at $134 million. They can take the hit.
Whereas if the Mountain West were to get 1/3 of a million bucks payout, that would be a big financial hit.
This is a huge deal and will have impacts on those schools not making $25 million per year in its media rights deal. However, a real scenario could see a Mountain West school drop a non-revenue sport that is not competitive to make up a bit of that money they thought they would have.
Another scenario is that they may skimp on other budget items like new coaches salaries, where they stay on the road, per diem for athletes, or recruiting.
There will be smaller leagues that take a hit but that might not have always been the case as the NCAA did have a huge savings account but that was wiped away.
That $400 million would have made up enough to make up for the NCAA Tournament being canceled. Just about half of that money was spent on rising costs across the NCAA but the other half came from a lawsuit regarding cost of attendance for former student-athletes to the tune of $208.7 million legal settlement.
There was money there but it was spent on a few things and now that puts schools in a financial bind. Some are saying with no spring sports that it could maybe balance out a bit with no travel, food, and other costs associated with the sports, with the exception of coaching staff being paid. Maybe that will help a little bit.
The big question looming is what if college football does not return in a normal form? With the Olympics being pushed back a year that has to leave an eery feeling in the pits of athletic directors stomachs if college football does not play. Even playing with no fans does not help because there is so much money made at home games with ticket sales, parking, food, and memorabilia.
We will have more on college football in upcoming articles but it will be something to watch over the next month or so to see how COVID-19 impacts the United States.