We now have the cost of canceling March Madness, as the NCAA will not pay out an expected $375 million to 350 member schools after the major event was canceled due to the coronavirus pandemic.
In all, the NCAA will distribute $225 million in June to Division I members. That’s down from the previously budgeted $600 million, with the first distribution scheduled for April. The cuts also affect Division II and Division III schools. For instance, Division III faces a $7.6 million deficit for the 2019-20 fiscal year as a result of the cancellation of the remaining winter and spring championships.
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.
“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 V. Drake, chair of the board and president of 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.
In addition, the NCAA is undertaking a variety of cost-cutting budget measures as a way to lessen the cost of canceling March Madness.
