The NCAA Budget: Where The Money Goes
The NCAA funds many programs directly supporting the academic needs and wellbeing of student-athletes. NCAA Chief Financial Officer Kathleen McNeely describes the sources of the Association’s revenue and how it is distributed.
How can the NCAA be a nonprofit organization when it generates so much revenue?
The NCAA maintains its nonprofit status because it is an association of colleges and universities sharing a common academic mission. Every year, the NCAA and its members equip more than 450,000 student-athletes with skills to succeed on the playing field, in the classroom and throughout life.
Where does the NCAA’s revenue come from?
Television and marketing rights fees, mostly from the Division I men’s basketball championship, generate 90 percent of revenues. Championship ticket sales provide most of the remaining revenue. Current revenues total approximately $800 million.
How are NCAA funds distributed?
Ninety-six percent of NCAA expenses benefit student-athletes at member schools through services or direct distributions. The NCAA supports operational expenses and student-athlete travel expenses for 89 national championships in 23 sports. The association also provides catastrophic-injury insurance coverage for all student-athletes and various scholarship, grant and internship programs. The NCAA and member schools together award more than $2.4 billion in athletic scholarships every year to more than 150,000 student-athletes.
The NCAA helps member schools pay for expenses related to the number of scholarships they provide and sports they sponsor. As a school provides more opportunities to student-athletes, it receives larger reimbursements. Every year, the NCAA provides almost $100 million to enhance academic opportunities and help student-athletes who need educational material, clothing and emergency travel expenses.
The NCAA distributes additional funds to Division I schools that are successful in the men’s basketball championship, since those programs effectively make basketball revenue possible. Division I conference grants are provided to help develop athletics administrators and coaches.
Division II and III also have smaller distribution and grant programs currently totaling about $15 million.
How much money does the NCAA spend on producing championships?
More than 54,000 student-athletes experience the thrill of participating in an NCAA championship every year. The NCAA’s championship expenses support operational expenses, team transportation, per diem costs, sport committee expenses, fan-appreciation events and programs saluting student-athletes. The NCAA currently spends $85 million on Division I championships, $23 million on Division II championships and $21 million on Division III championships.
What are the NCAA’s operating expenses?
With most revenue allocated to supporting student-athletes through various programs, the remainder is used to administer the day-to-day operations of the NCAA. This includes the costs of running the national office and supporting its 500 employees, who administer 89 championships, maintain a governance structure sustaining approximately 1,100 member schools, provide educational services to coaches and athletics administrators, and manage financial systems for membership.
Other annual operating expenses include student-athlete catastrophic insurance, health and safety initiatives, legal support and governance committee travel.
How much are the NCAA’s current assets?
Under the direction of the NCAA Executive Committee, comprised of presidents and chancellors from all three divisions, the NCAA sets aside assets in reserve to protect NCAA membership in the future. The NCAA currently has approximately $530 million in unrestricted assets, including an operating reserve of $84 million, a $34-million reserve for capital replacement and a quasi-endowment of $282 million. The quasi-endowment is specifically intended to protect NCAA membership in the event that media revenue dollars are not received due to an interruption in the men's basketball championship. The quasi-endowment policy, as set by the Executive Committee, has a targeted goal of $380 million.
Excess assets not allocated to a reserve account are distributed back to Division I schools as a supplemental distribution. In February, 2013, the NCAA’s supplemental distribution was $42 million.
How does the NCAA support student-athlete well being?
The NCAA sponsors a number of health and safety initiatives, including a program collecting and analyzing injury incidence data in order to help create safer competition, championship and year-round drug testing that helps protect student-athletes and ensure fair play, and grants promoting health and safety research as well as the prevention of alcohol and drug abuse on college campuses.
Link to Article: NCAA - Budget: Where The Money Goes