National Collegiate Athletic Association

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The NCAA News -- May 10, 1999

Executive Committee offers conference payment options

Guidelines for Division I conferences to determine how and when to remit the balance due for the restricted-earnings coaches settlement were established during the NCAA Executive Committee's April 21 meeting in Washington, D.C.

The payment plan for the $54.5 million settlement, which was developed by the Division I Management Council members of the Budget Subcommittee and ultimately approved by the Division I Board of Directors, uses Association-wide reserves in the amount of $18.25 million to help reduce the allocation of the cost and divides the remaining $36.25 million among Division I schools.

Half of the $36.25 million will be allocated based on an equal payment among the 306 Division I schools, and the other half will be allocated to Division I schools through the revenue-distribution plan.

The Executive Committee worked with the plan to develop a conference assessment formula that determines the total amount each conference would owe, the amount each conference would be credited for the distribution withholdings that occurred in the current fiscal year and in fiscal year 2000, and a final balance due from each conference once the credit is applied.

The committee agreed that conferences could allocate their final payments among their member schools as they choose, and that conferences would be able to remit balances due in a lump sum or through a loan program to be developed and administered by the Executive Committee's Budget Subcommittee.

The loan program, which would be managed by the NCAA, would allow conferences to defer some or all of the costs of the settlement over a period of time.

The guidelines of the loan program are as follows:

  • Conferences will be responsible for administering one conference loan for all institutions within the conference.

  • Loan repayments will be funded from future April conference distributions.

  • Loans will be amortized on a straight-line basis with payments due over a period of time to be determined by the Budget Subcommittee.

  • Interest will accrue effective September 1, 1999.

  • Interest will be assessed on a simple basis as of April 1 each year.

  • Interest rates will range from 5.5 percent to 6.0 percent if the Association has access to tax-exempt financing or 7.0 percent to 8.0 percent if the Association has to borrow funds on a taxable basis.

    Conferences have until the end of June to decide whether to remit the balance due in a lump sum, defer payment through the loan program or remit through a combination of payment and loans.

    Budget items

    In addition to its review of the restricted-earnings payment plan, the Executive Committee reviewed a preliminary report from the Budget Subcommittee regarding the proposed budget for 1999-00. The committee tentatively approved budget allocations of $13.2 million after reviewing requests totaling approximately $16 million. The allocations include an increase of $10 million in Division I revenue distribution (half to the Division I men's basketball fund and half to broad-based funds) and an allocation of $800,000 for championships initiatives.

    The committee noted that the $800,000 for championships initiatives includes $550,000 in annual championships enhancements that the Board of Directors approved last year.

    The total also includes a cabinet request for an increase of $50,000 (which was approved in April by the Management Council) to cover officiating expenses resulting from previous bracket expansions in Division I baseball and softball.

    The committee also tentatively approved $2.4 million in funds for various Association-wide initiatives, including a comprehensive public affairs strategic plan; basketball marketing initiatives; requests from the Minority Opportunities and Interests and the Sportsmanship and Ethical Conduct Committees; gambling-education initiatives; and national office expenses.

    In another action, the committee discussed a process for ongoing evaluation of the effectiveness of Association governance bodies, including a preliminary report from William M. Mercer, Inc., on a process -- requested by NCAA President Cedric W. Dempsey -- for evaluating the office of NCAA president.

    The process is designed to align the performance of the president with the strategic plan of the NCAA and to facilitate open communication between the evaluation committee and the president, assuring that the president has full knowledge of the performance priorities during each fiscal year.

    Restricted-earnings settlement analysis

    The following chart shows the number of dollars assessed to each conference to pay the restricted-earnings coaches case settlement, the amount each conference would be credited for the distribution withholdings that occurred in the current fiscal year and fiscal year 2000, and a net amount due from each conference once the credit is applied. The totals in the final column (net amount due) are subject to change to accommodate movement of Division I institutions among conferences.

    Conference -- No. of members in each conf. -- $36.25 million per conf. assessment -- $20.0 million per conf. credit -- Net amt. due prior to conference change adjust.

    America East -- 10 -- $961,150 -- $406,986 -- $554,164

    Atlantic 10 -- 12 -- $1,600,867 -- $982,160 -- $618,707

    Atlantic Coast -- 9 -- $2,159,904 -- $1,795,107 -- $364,797

    Big 12 -- 12 -- $2,341,465 -- $1,799,371 -- $542,094

    Big East -- 13 -- $2,111,248 -- $1,479,980 -- $631,268

    Big Sky -- 8 -- $694,615 -- $243,596 -- $451,019

    Big South -- 7 -- $544,065 -- $142,831 -- $401,234

    Big Ten -- 11 -- $2,504,484 -- $2,044,615 -- $459,869

    Big West -- 12 -- $1,078,388 -- $405,632 -- $672,756

    Colonial -- 9 -- $844,394 -- $343,509 -- $500,885

    Conference USA -- 12 -- $1,826,925 -- $1,231,603 -- $595,322

    Ivy Group -- 8 -- $834,785 -- $398,266 -- $436,519

    Metro Atlantic -- 10 -- $812,291 -- $242,726 -- $569,565

    Mid-American -- 12 -- $1,383,211 -- $741,988 -- $641,223

    Mid-Continent -- 9 -- $712,481 -- $197,951 -- $514,530

    Mid-Eastern -- 11 -- $860,656 -- $230,735 -- $629,921

    Midwestern -- 8 -- $647,659 -- $191,782 -- $455,877

    Missouri Valley -- 10 -- $954,744 -- $399,916 -- $554,828

    Northeast -- 9 -- $694,151 -- $177,724 -- $516,427

    Ohio Valley -- 10 -- $844,349 -- $278,100 -- $566,249

    Pacific-10 -- 10 -- $1,958,546 -- $1,507,560 -- $450,986

    Patriot League -- 7 -- $679,872 -- $292,688 -- $387,184

    Southeastern -- 12 -- $2,374,372 -- $1,835,683 -- $538,689

    Southern -- 11 -- $905,985 -- $280,753 -- $625,232

    Southland -- 10 -- $807,353 -- $237,277 -- $570,076

    Southwestern -- 8 -- $669,162 -- $215,510 -- $453,652

    Sun Belt -- 10 -- $865,783 -- $301,752 -- $564,031

    Trans America -- 12 -- $920,093 -- $230,961 -- $689,132

    West Coast -- 8 -- $636,488 -- $179,456 -- $457,032

    Western -- 16 -- $2,020,514 -- $1,183,782 -- $836,732

    Total Distribution -- 306 -- $36,250,000 -- $20,000,000 -- $16,250,000