It appears the coronavirus is going to force some athletic directors to work for a living.
Major-college athletics directors are planning on the NCAA not being able to cover all of the revenue it will lose because of the cancellation of the Division I men’s basketball tournament due to the coronavirus outbreak, six ADs and college sports administrators have told USA TODAY.
That is likely to result in a reduction of the association’s scheduled distribution of $600 million to Division I schools and conferences this spring, the ADs and administrators said. How much of a reduction is still to be determined, and that will depend on the association’s ability to tap its reserves and borrow money.
The ADs and administrators spoke on the condition of anonymity because the financial details are still being worked out.
“The economics of all this could definitely be extensive,” one AD said.
The NCAA has about $275 million in business-interruption insurance connected to the tournament coming. The men’s tournament rakes in almost $900 million for the organization, so you do the math.
The NCAA’s 2020 Revenue Distribution Plan calls for the association to make payouts to Division I schools from April 15 through June 10. Just over $220 million in payments are scheduled for April 15, but those may be delayed.
One AD said it will take a long time for the finances to be fully determined and sorted out legally.
You can bet athletic directors across the country are already doing just that.
11 responses to “An unexpected consequence”
I read that typical business interruption insurance excludes pandemics, reduces the amount of coverage, and is usually an extra rider onto an standard policy. I bet the ADs and that jackass Emmert need to start looking elsewhere because the insurers are likely to fight these claims tooth and nail.
Maybe a couple of our fine Risk Management & Insurance alumni can share their knowledge.
Is this where McGarity gloats and tries to act like a genius? (In theory) this is what the reserve fund has been waiting for (though I’m sure this will not be enough of a disaster to justify spending any of it)!
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Rest assured, the delay in season ticket purchases are so our lawyers can review our force majeur agreements for the 2020 season. Please remember to have your money in by the 6th.
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What is he going to spend it on right now that he wouldn’t otherwise? Coaches and support staff still have to be paid. I assume the expenses associated with the facilities will practically go to zero. I’m assuming he’s already talking to the accountants on North Campus about the housing and meal plan allowances that will need to be “refunded.”
He can use it to back-fill the lost revenue from cancelled sports and related losses. Everything is allocated based on estimation.
My point is that McGarity has guarded the reserve fund under the guise of “For Emergency Use Only” and perhaps this will expose that position for what it really is … bullshit.
BTW, the bulk of coaches salaries are paid from the Athletic Association.
The ESPN money from the SEC Network and the SEC sports package and the CBS money is pretty much already in the conference’s hands. I seriously doubt there is going to be much of a reduction in the 2019-20 distribution of those funds. I guess that was my point about the spending on current commitments … most of that money will be in the bank.
I don’t know how much of the distribution for March Madness goes to the conferences vs. directly to the schools based on how deep a school goes in the tournament. The tournament is the cash cow for the operation of the NCAA.
Since we’re talking money, what happens with those infamous student athletic fees. Do they get partially refunded?
Yup just like the IRS will send you any over payment without asking.
I believe the university has stated they are reviewing all of the fees charged for the semester and refunding a portion of them based on loss of use.
Hmmm. How much money would be available if the NCAA didn’t keep paying Remy to lose cases?
In this one narrow application of the affects of the Mexican beer virus, this is somewhat karmic.