The NCAA News - News & Features

Direct distribution up 9.2 percent

Most of the money is part of the Division I revenue-distribution plan, which provides money to member institutions through five different funds. Three of the funds -- basketball, grants-in-aid and sports sponsorship -- will pay more than they did last year, in keeping with the NCAA Executive Committee's long-range budgeting concepts that will increase direct payments to the membership at a rate equal to or greater than the increase in rights fees from CBS.

This year, CBS will pay the Association $188.4 million for television rights fees, 5.7 percent more than last year. Total operating revenue will be $239.4 million.

This year, the basketball fund will pay $50 million to Division I members based on their conferences' performance in the Division I Men's Basketball Championship over a six-year period (1991-96). That is $5 million more than last year and $18.5 million more than three years ago, when the same fund paid $31.5 million.

The "broad-based" funds -- sports sponsorship and grants-in-aid -- also will pay $50 million combined this year. They have increased at the same rate as the basketball fund.

The membership distribution also includes $2.5 million in anticipated investment income from the $50 million payment the NCAA received from CBS in January 1996 as part of the current contract. Investment revenue from that source is to be distributed annually to Division I members through the basketball and broad-based funds.

In most ways, the budget is similar to those of recent years. The line items are almost identical.

One difference, however, has to do with the enhanced marketing program that was approved at the Executive Committee's August meeting.

The new budget shows $8.6 million in corporate-partner revenue, which is $1.5 million more than last year. The anticipated increase results from the revenue-sharing component of the NCAA's contract with Host Communications; effective this year, the Association will receive a percentage of adjusted gross revenues generated by the corporate-partner program (which includes radio rights and championship game programs).

In another matter related to marketing, the revenue budget shows a $1.5 million decrease in foreign and domestic licensing revenue. Previously, licensing money went directly to the NCAA, which distributed it under the heading of "royalties" ($1.1 million in the 1995-96 budget). Under the Association's new contract with the Licensing Resource Group (LRG), licensing revenue will go to LRG, which will distribute appropriate amounts to the NCAA and the membership. The "royalties" expense line-item has been eliminated.

Other items of interest in the 1996-97 NCAA budget:

* The expense for the administration of Division I championships increased from $18.5 million to $19.0 million, primarily because of the implementation of the National Collegiate Rowing Championship.

* The budget for legal expenses is $2.5 million, the most since 1992-93.

* An additional $250,000 will be spent on the degree-completion and postgraduate-scholarship programs.

* A total of $1.6 million is budgeted for "initial eligibility," which includes administration of the NCAA Initial-Eligibility Clearinghouse, retention of a consultant on learning disabilities and public-information efforts related to the implementation of new initial-eligibility standards.

* The NCAA 2000 project, which relates to the national headquarters site, is expected to cost about $300,000, which will be paid for out of a $1.5 million contingency line item.

* A new $795,000 line item for liability insurance does not reflect a new expense, but rather a change in the way membership insurance expenses are treated in the budget.

* The total expense for program administration and national office expense for 1996-97 is set at $28.8 million, which is 12 percent of operating revenue -- the same as last year.