After the cancellation of the NCAA’s Division I men’s basketball tournament this past year due to the widespread COVID-19 pandemic, the unfortunate result was a $600 million loss in the total revenue for the association. The information for the 2020 fiscal year is readily available via a newly audited financial statement.
Compared to 2019, that is a 50% decrease.
The financial statement, which was obtained by several popular news networks, showed a decline of $700 million in revenue from television and marketing rights. Most of this money typically comes from contracts with Turner and CBS. In the NCAA’s 2019 fiscal year, the association reported revenue of around $868 million.
For the 2020 tournament, the NCAA was prepared to receive a hefty $827 million from Turner and CBS. Instead, the association only received $113.1 million, according to the recent financial statement.
“The NCAA lost more than $800 million in revenue” due to the cancellation of the men’s basketball tournament. The notes stated that this loss was due to the lack of ticket sales and TV/marketing rights agreements.
The statement did note, however, that the NCAA received $270 million in event cancellation insurance.
Due to this unprecedented drop in funds, the association had to adjust how it would distribute funds to is Division I conferences and schools. Rather than giving $611 million as they did in 2019, it could only shell out $246 million for 2020.
The latest financial statement provides the public with information regarding the impact of the tournament’s cancellation, though there are many other details that are left to the imagination.
The note on the statement says that the NCAA obtained a $125 million credit line through PNC bank on May 1, 2020. However, they also note that that credit line did not have any outstanding amount as of August 31, 2020.
This only reinforces how crucial the act of staging basketball tournaments during the 2020 season is to the NCAA. They recently announced that the men’s tournament for 2021 would be held exclusively at Indiana venues, which is quite a contract considering the fact that the tournament typically finds itself at a variety of locations around the country.
According to the most recent statement, the NCAA is set to receive $850 million from Turner and CBS during the 2021 fiscal year. Once again, the NCAA has event cancellation insurance in place for the 2021 tournament, which includes coverage for the pandemic. However, the amount of that coverage is not provided.
While things are going a bit closer as originally planned this year, many college commissioners are worried about increasing COVID-19 rates after the basketball season. Matt Norlander from CBS Sports reports the potential mid-season pause for basketball. Three factors here are giving administrators a tough choice to make, including lack of vaccine access, students returning to campus, and possibly new coronavirus restrictions from the federal government.
The NCAA basketball tournament is a significant revenue generator for the NCAA. To make sure that tournament is played this year, they will do everything they can possibly do, even if it means pushing the tournament back a month or two.