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Both the men’s and women’s basketball NCAA tournaments, aka March Madness, were canceled due to the coronavirus pandemic, and the financial impact on many colleges will be massive.
The loss of the March Madness tournament will cost the NCAA about $375 million, the NCAA says. The NCAA was originally scheduled to distribute a total of $600 million to over 1,200 schools across all divisions before the cancellations, but now will distribute $225 million.
A portion of the revenue from events like March Madness and conference tournaments, which were also canceled, would normally be distributed to the NCAA’s member schools for athletic departments and a variety of other programs.
Because many athletic programs are not profitable, the multimillion-dollar contributions from the NCAA helps many athletic departments operate.
“We’re going to take some hits there,” said Bob Bowlsby, the Commissioner of the Big 12 Conference on a teleconference. Bowlsby claims his conference was set to receive $24 million from NCAA distributions but will now receive about $10 million.
Generally, the main revenue sports for universities are football and basketball. The lack of funds could impact sports that don’t turn a profit like swimming or softball. Roster sizes and coaching salaries could be cut in an updated budget from athletic departments.
Women’s sports, which tend to turn a profit less often than men’s sports, could be impacted by this lack of financial distribution as well. Any cuts to women’s sports programs could be subject to Title IX, which protects participation and benefits of education programs from gender discrimination.
There is also some potential for athletic scholarships to be affected.
According to the NCAA, the organization gave $222 million last year to be used for athletic scholarships and scholarship funds.
Most scholarships are renewed annually, meaning they are basically a series of one-year agreements. Multi-year scholarships are popular with high-level athletes like major conference football players.
Kerry Traylor, Founder of College Strategy Experts, a group that provides professional college and financial aid services, doesn’t think schools will cut athletic scholarships as a result. “You can’t just take a student’s scholarship away,” she told MarketWatch shortly after the NCAA tournaments were canceled.
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Division II and Division III universities are also huge beneficiaries from the NCAA’s revenue allocation system. The NCAA claims Division II schools will receive $13.9 million, which is $30 million less than last year — Division III schools will receive $10.7 million, which is $22 million less than last year.
MarketWatch reached out to representatives at multiple university athletic departments for this story. Several of them said they were concerned over what is next to come, but none of them wanted to be quoted.
The universities stopped short of speculating how they will deal with a decrease in financial resources from the NCAA.
The NCAA said it is “undertaking a variety of cost-cutting budget measures that will be determined in the upcoming weeks.”
