National Collegiate Athletic Association |
The NCAA News - News and FeaturesAugust 31, 1998
Revenue distribution level for Division I members
Overall expenses to increase $4.7 million for '98-99 fiscal year
The NCAA budget for the 1998-99 academic year, approved August 12 by the NCAA Executive Committee, shows that the total distribution to Division I members for 1998-99 will be $140,650,000, an increase of only 0.2 percent over 1997-98. The only increase will be an additional $300,000 distributed through the academic-enhancement fund (the fund includes $50,000 for every Division I institution, and there are six new members in the division). Overall NCAA expenses will increase by $4,667,000. That increase mostly reflects the additional expense of the recently renegotiated catastrophic-injury insurance plan, which jumped in cost from $3.6 million to $7.4 million. Revenue for 1998-99 is not flat, reflecting greater television rights payments from CBS Sports, which increase annually throughout the eight years of the contract. The NCAA currently is in the fifth year of that agreement. Overall operating revenue for 1998-99 will be $282,990,000, 80 percent of which will come from television rights fees. That contrasts with operating expenses of $265,690,000. The revenue surplus of $17.3 million will be directed to the membership trust. Division I members will not receive any supplemental distribution of revenues over expenses. The membership trust -- along with $13 million available for operations from 1996 and 1997, will be held to meet certain strategic initiatives, possibly including legal expenses facing the Association. If the membership trust is not used, it would be returned to the Division I membership. Even though overall expenses will not increase significantly for 1998-99, the budget does include two important features that positively affect student-athletes. First, by reallocating Division I championship expenses, bracket expansions were accomplished in five Division I sports: baseball, men's and women's cross country, women's soccer, women's softball, and women's volleyball. The expansions, estimated to cost about $825,000, will be effective for 1998-99. Also, the Association was able to renew the catastrophic-injury insurance program, which offers protection to student-athletes at all NCAA member institutions. The claims experience in recent years more than doubled the cost of the program. In addition, the deductible increased from $25,000 to $50,000. However, the program remains far less expensive than what institutions or conferences could negotiate individually. Divisions II and III The Division II allocation will be $11,842,000, an increase of $720,000 from last year. Division III's allocation will increase $523,000 to $8,617,000. The NCAA Constitution states that 4.37 percent of NCAA operating revenue in each year is to go to Division II while 3.18 percent is directed to Division III. (The allocations do not match those percentages exactly because advance rights fees and interest are deducted from the operating revenue.) NCAA President Cedric W. Dempsey noted that several guiding principles were used in development of the 1998-99 budget:
Strategic plan Dempsey also noted that this is the first budget to based on the development of an internal strategic plan. The key elements of that plan are:
1998-99 general operating budget -- 1997-98 -- 1998-99 REVENUE -- Budget -- Budget NCAA operating revenue Television -- $213,625,000 -- $226,400,000 Division I men's basketball -- $17,140,000 -- $18,235,000 Other Division I championships -- $7,790,000 -- $8,481,000 Division II championship -- $750,000 -- $540,000 Division III championships -- $320,000 -- $303,000 Licensing and royalties -- $17,232,000 -- $18,370,000 Investments -- $6,500,000 -- $7,000,000 Sales, fees and services -- $3,666,000 -- $3,661,000 Total NCAA operating revenue -- $267,023,000 -- $282,990,000 -- 1997-98 -- 1998-99 EXPENSE -- Budget -- Budget Distribution to Division I members Dist. to institutional athletics programs -- $110,000,000 -- $110,000,000 Dist. to student-athlete programs -- $25,250,00 -- $25,550,000 Dist. to conference program -- $5,100,000 -- $5,100,000 Total distribution to Division I members -- $140,350,000 -- $140,650,000 Division-specific expenses Division I men's basketball -- $12,900,000 -- $11,500,000 Other Division I championships -- $21,672,000 -- $22,952,000 Division II allocation -- $11,122,000 -- $11,842,000 Division III allocation -- $8,094,000 -- $8,617,000 Student-athlete welfare and youth programs and services Catastrophic insurance -- $3,687,000 -- $7,400,000 Sports sciences -- $2,898,000 -- $2,898,000 Initial eligibility -- $2,000,000 -- $2,000,000 Scholarships -- $1,289,000 -- -- Youth programs -- $1,655,000 -- $1,655,000 Award ceremonies -- $400,000 -- $435,000 Citizenship Through Sports -- $100,000 -- -- Sports-agent/antigambling issues -- $64,000 -- $64,000 National Student-Athlete Day -- $30,000 -- -- Membership programs and services Public affairs -- $4,861,000 -- $2,921,000 Marketing, licensing and promotions -- $3,521,000 -- $4,840,000 Legal services -- $3,000,000 -- $3,500,000 Convention and seminars -- $953,000 -- $1,074,000 Liability insurance -- $875,000 -- $986,000 Officiating insurance programs -- $617,000 -- $645,000 Research -- $469,000 -- $469,000 Information technology -- $330,000 -- $830,000 Athletics certification/education -- $285,000 -- $86,000 Grants and other services -- $198,000 -- $198,000 Professional development -- $190,000 -- $190,000 Contingency--programs and services -- $3,500,000 -- $3,626,000 Membership services staffing -- $4,044,000 -- $3,849,000 Enforcement/eligibility appeals staffing -- $3,091,000 -- $3,085,000 Championships staffing -- $2,518,000 -- $2,725,000 Education services staffing -- $2,365,000 -- $2,460,000 Marketing, licensing and promotions staffing -- $1,832,000 -- $2,175,000 Governance/committees -- $3,750,000 -- $3,750,000 Administrative services General and administrative expenses -- $8,506,000 -- $8,236,000 -- Executive and governance staff -- $3,900,000 -- $4,050,000 Public affairs -- $3,266,000 -- $2,961,000 Finance and information services -- $2,291,000 -- $2,621,000 Contingency-administrative services -- $400,000 -- $400,000 Total NCAA operating expenses -- $261,023,000 -- 265,690,000 Supplemental revenue distribution -- $2,500,000 -- -- Membership trust -- $3,500,000 -- $17,300,000 Total -- $276,023,000 -- $282,990,000 Associated organizations -- 1997-98 -- 1998-99 Revenue -- Budget -- Budget National Youth Sports Program -- $12,000,000 -- $14,000,000 NCAA Foundation -- $2,555,000 -- $39,928,000 NCAA Marketing Corporation -- $1,750,000 -- $1,750,000 Total revenue -- $16,305,000 -- $19,678,000 1997-98 -- 1998-99 Expenses -- Budget -- Budget National Youth Sports Program -- $12,000,000 -- $14,000,000 NCAA Foundation -- $2,555,000 -- $3,928,000 NCAA Marketing Corporation -- $1,750,000 -- $1,750,000 Total expenses -- $16,305,000 -- $19,678,000 |
For the first time since the NCAA revenue-distribution plan was implemented in 1991, distributions to Division I members will not increase over the preceding year.