The NCAA News - News and Features

August 31, 1998

Division II near distribution decision

CEOs looking to resolve $3 million issue in October

CHICAGO -- The governing bodies of Division II are taking care to make certain that the division's $3 million enhancement fund is distributed in an equitable, yet constructive, way.

The topic has been discussed at length now by the Division II Budget and Finance Committee, the Management Council and, most recently, by the Presidents Council.

In all three forums, there has been a similar consensus: The current method is not acceptable because it distributes half the money from the fund based on conference performance in the Division II Men's Basketball Championship. There is general agreement that basing half the distribution on the outcome of a single sport is a practice that needs to be changed.

The problem is that changing the distribution formula affects institutions and conferences in different ways. Some would benefit under new formulas, but those benefits would be balanced by others who would be receiving less money than before.

Because of the widespread impact that any change will have, the Division II Management Council recommended at its July meeting that the matter be considered one final time at a Convention forum in January.

However, the Presidents Council, which met August 11, believes that it is time to make a decision. The question now is this: Which action is best?

In concept, both the presidents and the Management Council seem to favor an option that would distribute a third of the fund equally to member institutions, a third to the conferences based on their teams' performance in the men's and women's basketball championships, and a third to the conferences based on the number of championships they conduct.

The benefits are that such a distribution would place equal emphasis on performance in the men's and women's basketball championships (the only sports in which all conferences have automatic qualification) and would reward conferences that sponsor many different sports. It also would enhance the role of conferences in the Division II structure.

However, because only a third of the fund would be distributed directly to member schools (as opposed to the one-half that they currently receive), the per-institution distribution would drop by a third. Applying the proposed formula using 1997-98 as an example, each Division II institution would receive $4,149, compared to $6,224 under the current method. But in that example, 18 of the 22 Division II conferences would receive more money -- significantly more in most cases. In fact, half of the conferences would receive at least 50 percent more than they do now. Those conferences would be free to use the money as they see fit, presumably distributing part of the money to their own memberships or reducing membership dues, thus at least offsetting the $2,075 shortfall in the distribution to individual institutions.

The problem that all of the governing bodies have encountered is this: As well as the proposed distribution method would work for many conferences, it could result in a loss of revenue for some others. In the 1997-98 example, the reduction would be more than 10 percent for two conferences. That effect would be compounded by the fact that the institutions in those conferences also would be receiving less money directly from the fund.

In the alternative, both the Management and Presidents Councils have explored a model that would distribute one-third of the fund equally to all Division II member institutions and would distribute the remaining two-thirds to conferences based on their members' performance in the men's and women's basketball championships.

As with the other model, individual institutions would receive less direct money. As for the effect on conferences, in the 1997-98 example, six conferences would receive less money (rather than five under the other model); however, in most cases, the reduction in funding would be less than under the other model. In the first model, the biggest drop in the distribution to a conference would be almost $28,000; in the second model, the largest reduction would be about $7,500.

The downside is this: Although all groups acknowledge that the second model most approximates how the division currently distributes the revenue, most of those involved in the decision process appear to believe that the current method should be changed to enhance the role of conferences and to encourage broader sports sponsorship.

With all of that in mind, the presidents have asked for more information on how certain conferences could be assisted through a transition period. One suggestion was to direct resources from the division's unallocated funds for that purpose.

The Presidents Council will review the matter at its October meeting, at which time a decision likely will be made. Any changes will take effect in the 2000-01 academic year.

Legislation

Although the Presidents Council devoted most of its time at its August 11 meeting to examining the distribution of the enhancement fund, it also addressed several other significant issues passed along by the Management Council.

Regarding proposed legislation, the presidents: