The NCAA Can Lose FBS Football, It Can’t Lose March Madness
The Knight Commission on Intercollegiate Athletics released its recommendations on the future of FBS football last week. From that perspective, the fundamental point was that the NCAA should get out of the business of running FBS football. I, frankly, couldn’t agree more.
But that’s the top sheet. Dig in and you’ll find a snug little nugget of information that’s important to the NCAA’s basketball fortunes:
“FBS institutions remain full NCAA Division I members in all sports except football.”
The Knight Commission recommending THAT is vital to the NCAA remaining relevant on the college athletics stage, if that’s something you care about. And if you’re a college basketball fan, you should care.
The NCAA can actually live without the FBS. Why? Because the Knight Commission’s recommendation just reinforces most of what is already happening in FBS. The NCAA makes little money off FBS football. The conferences negotiate their television contracts. The College Football Playoff runs the playoff and negotiates the TV deal for the playoffs. What does the NCAA get? Basically, the regulatory nightmare. The Knight Commission’s recommendation takes the NCAA out of that business as well. I’ll quote:
“(FBS would) Manage all issues related to FBS football athlete education, health, safety, revenue distribution, litigation, eligibility and enforcement.”
The NCAA would LOVE that. Why? It’s a migraine headache and, honestly, the NCAA isn’t good at it. Best just to walk away.
But the NCAA cannot walk away from basketball. It absolutely cannot. And it boils down to two words:
March. Madness.
Most major athletic departments make its money off of football. The NCAA makes its money off of March Madness. The three-week tournament, perhaps the most exciting thing in collegiate or professional sports, is the NCAA’s cash cow. The NCAA and CBS/Turner have a long, entrenched deal that tethers the tournament to the networks through 2032. Right now the NCAA makes a fat $771 million per year in television rights fees alone. That number goes up to $1.1 billion when the extension kicks in starting in 2025.
The contract, on balance, from its start in 2010 to its completion in 2032 is $19.6 billion.
The tournament works like clockwork, or at least it did until the 2020 Tournament, which was canceled due to the coronavirus pandemic. The financial impact was insane. Marketwatch.com reported that canceling the tournament cost the NCAA $375 million. Statista.com estimated that the NCAA COULD lose up to $933 million when they ran numbers in June. That would include all revenue, including media rights, ticket sales and sponsorships. Yahoo! estimated that the NCAA lost $1 billion in revenue when it canceled both the men’s and women’s NCAA Tournaments.
So the NCAA took a huge hit in March, so much so that the NCAA had to furlough its entire staff for the final four months of the year. Plus, top management took pay cuts.
Now, if you don’t think that this impacts the NCAA’s member schools, then you probably don’t understand the symbiotic financial structure of college athletics. Yes, the NCAA has a huge TV contract, but they pass a good portion of that money along to their member schools. The NCAA was expected to pass along $600 million to its member schools for the 2019-20 season from rights fees and other revenue sources. This summer it was only $225 million. This is part of the reason you saw layoffs, furloughs and pay cuts at many NCAA schools this summer.
Many NCAA schools rely on that money, even some of the bigger ones, including schools in the Big 12.
The NCAA can’t give that up. For that matter, the NCAA’s member schools can’t give that up, either, because the NCAA holds those contracts.
That’s why these recommendations are so important for the NCAA, each Big 12 football program and each Big 12 basketball program. It’s the best of all worlds.
Now, the NCAA just has to approve it. And you know how that goes.
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