Insurance policy on canceled championships used to support college athletes

NCAA Sets Revised Financial Distribution




In response to the cancellation of all remaining winter and spring NCAA championships, the Board of Governors voted unanimously to distribute $225 million in June to Division I members to specifically focus on supporting college athletes.

Division I revenue distribution for 2020 was previously budgeted at approximately $600 million, with the first distribution scheduled for April.

The NCAA receives most of its revenue from the Division I men’s basketball championship television and marketing rights, as well as championship ticket sales. The revenue is used to provide distributions to member conferences and schools along with funding championships, national programs, and other initiatives to support student-athletes.

In its decision, the Board of Governors stressed the importance of using the distributions to aid college athletes during the uncertainty of the current environment, along with the importance of carefully planning with less revenue. The decision also allows membership to engage in planning while the NCAA continues to work with its contractual partners.

“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 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.”

Of the $225 million distribution, $50 million will come from NCAA reserves. The NCAA also has a $270-million event cancellation insurance policy, and the proceeds, when received, will be used to pay off a line of credit that will cover the remaining distribution within 12 months.

To further assist with the reduction in revenue this year, Drake said the NCAA is undertaking a variety of cost-cutting budget measures that will be determined in the coming weeks.

“The association has prepared for a financial catastrophic event like the one we face now,” Drake said. “While we certainly have challenges ahead, we would be in a far worse position had it not been for this long-standing, forward-focused planning.”

The Division I Board of Directors determined for this year’s Division I distribution, $53.6 million will stem from the Equal Conference Fund, which is split equally among Division I basketball playing conferences that meet athletic and academic standards to play in the men’s basketball tournament. The remainder will be proportionally distributed through the remainder of all other funds. The money will be unrestricted to provide latitude to conferences.

Division II will receive 4.37 percent of actual revenues, currently projected to be $13.9 million for the division, which is a $30 million decrease from last year. Division III will receive 3.18 percent of actual revenues, currently projected to be $10.7 million for the division, which is a $22 million decrease from last year. These amounts will be used to fund national programs.

“Our priority is to ensure that we are able to support student-athletes and continue to provide opportunity as broadly as possible,” said Division I board chair Eli Capilouto, president at University of Kentucky.

 

More On Scholarship

Members also adjusted financial aid rules to allow teams to carry more members on scholarship to account for incoming recruits and student-athletes who had been in their last year of eligibility who decide to stay. In a nod to the financial uncertainty faced by higher education, the vote provides schools with the flexibility to give students the opportunity to return for 2020-21 without requiring athletics aid be provided at the same level awarded for 2019-20. This flexibility applies only to student-athletes who would have exhausted eligibility in 2019-20.

Schools will also have the ability to use the NCAA’s Student Assistance Fund to pay for scholarships for students who take advantage of the additional eligibility flexibility.

Division I rules limit student-athletes to four seasons of competition in a five-year period. The council’s decision allows schools to self-apply waivers to restore one of those to student-athletes who had competed while eligible in the COVID-19-shortened 2020 spring season. Schools can also self-apply a one-year extension of eligibility for spring, effectively extending each student’s five-year “clock” by a year. This decision was especially important for student-athletes who had reached the end of their five-year clock in 2020 and saw their seasons end abruptly.

“The council’s decision gives individual schools the flexibility to make decisions at a campus level,” said council chair M. Grace Calhoun, athletic director at Penn State University. “The Board of Governors encouraged conferences and schools to take action in the best interest of student-athletes and their communities, and now schools have the opportunity to do that.”

Winter sports were not included in the decision. Council members declined to extend eligibility for student-athletes in sports where all or much of their regular seasons was completed.

The council also increased the roster limit in baseball for student-athletes impacted by the COVID-19 pandemic, the only spring sport with such a limit.

 

Recruiting Dead Period

The committee voted to extend the suspension of in-person recruiting activity through May 31. Institutional staff members are still allowed to communicate with prospective student-athletes by phone or email.

The committee voted to lift its restriction on issuing institutional athletics financial aid agreements beginning April 16. Earlier in March, the committee issued a temporary ban on issuing these athletics aid agreements to align with the recruiting dead period through April 15. Committee members determined the athletics aid ban should not be continued past that date due to mounting institutional concerns around enrollment management and the need for schools to more effectively plan for the next academic year.

They also recommended providing the enforcement staff additional authority to address COVID-19-related challenges with the NCAA Transfer Portal and permission-to-contact violations. For example, schools that fail to provide permission to contact within the legislated time frame of 14 consecutive calendar days may temporarily be granted flexibility from normal enforcement penalties. Student-athletes still automatically would be granted permission to contact by default.

 

What Now?

NCAA Chief Medical Officer Brian Hainline said student-athletes have been most concerned about their mental health and sense of well-being.

“Something was taken away from them very suddenly, and when that happens, that is when you become most vulnerable for mental health symptoms and disorders,” said Hainline, who spoke with members of a student-athlete liaison group, made up of members of various student-athlete advisory committees. “We are working to provide guidelines for them, such as the importance of setting up a regular schedule of discipline and doing the things that are necessary for self-care, fitness, and wellness.”

The advisory panel has turned its attention to what’s to come, like training during social distancing and fall sports. For example, it recommends against any exercise involving sharing a ball. As far as fall sports go, it is impossible to predict.

Hainline held conference calls with dozens of groups in the past weeks to discuss the COVID-19 trajectory, exercise and practice recommendations, and what’s on the horizon. There have been calls with representatives from the NBA, International Olympic Committee, International Tennis Federation, and Centers for Disease Control and Prevention.

As chair of the International Tennis Federation Sports Science and Medicine Commission, Hainline was part of a task force that assessed whether upcoming tennis tournaments in Europe and Asia, including Olympic qualifying events, could be played, and if so, where.

He was instrumental in presenting the information he collected during that time to the Board of Governors with board member Dr. Vivek Murthy, who was the 19th U.S. Surgeon General, serving in that position from 2014-17.

“There is a lag between the tests you see being registered — on the news every day — and the actual infection that’s happening right now,” Murthy said. “The numbers today are a reflection of the number of people affected one or two weeks ago. Knowing that there was a lag here, we also had to recognize that even though at that time the actual total case numbers in the United States was low, we had strong reason to believe that they were markedly higher — and I don’t mean 50 percent higher, I mean, potentially 10 times higher than what we were seeing because of the lack of testing and because of the lag affect between infection and ultimate diagnosis.”

They worked with a group of physicians from the American Medical Society for Sports Medicine, receiving detailed information back in January, before deciding to cancel the men’s basketball championship and spring sports in mid-March. It has upended the lives of student-athletes, Murthy said, navigating the new normal and the lack of social connections made through sports.

“We’re developing an even greater appreciation for how much we rely on each other, and how much we rely on having people in our lives who we can see, we can go visit, we can catch a movie with, we can take a walk with,” Murthy said. “These are things that perhaps some of us took for granted. And I think this experience is making it clear that we truly do need each other.”

The NCAA thanked student-athletes for their social responsibility and knowing their sacrifice is for a greater good.

“As collegiate athletes, we have all persevered through challenges, injury, and heartbreak, and we have come out even stronger on the other side,” the NCAA said in an open letter to student-athletes. “Now is the time to tap into the grit we have all developed through our athletics experience and to realize our identity is greater than our sport. Sports are what we do, but they are not who we are.”

“For many, sports have always been the escape from heartbreak, and now, especially for seniors, the sacrifice of not playing our sport is what breaks our heart,” the letter continued. “To our fellow student-athletes and everyone else in this country, thank you for making an enormous sacrifice. Your sacrifice is not in vain; it protects millions of people around the world, including our family, friends, and loved ones. Our collective sacrifices can save countless lives.”

Due to the evolving COVID-19 public health situation, the NCAA national office will extend the suspension of normal building operations in Indianapolis through May 1. All other operations will continue as the NCAA national office staff works remotely. NCAA employees will continue to be accessible through regular communication channels. The length of the suspension will be evaluated on an ongoing basis.

desiree@indyeastend.com