The NCAA Executive Committee heard some good news at its October 31 meeting in Indianapolis relating to the financial stability of the Association.

The matter pertains to the NCAA's financial rating being upgraded by Standard and Poor's Ratings Services from an AA- to an AA. The rating shift is important in that it gives the NCAA additional financial flexibility and credibility.

NCAA President Myles Brand told Executive Committee members that "while the NCAA does not have plans to issue additional debt, the rating is an important indication of the Association's financial position."

Standard and Poor's, one of two national companies on Wall Street that provide this service, issued the upgrade after reviewing the NCAA's assets, as well as efforts the Association has taken to develop contingency plans in the event of extreme circumstances. Standard and Poor's pointed to several factors, including:

The NCAA's 11-year television contracts with CBS and ESPN;

Established reserve policies that the Executive Committee has followed;

Detailed risk-management plans supplemented with adequate insurance coverage;

A financial contingency plan, approved by the Executive Committee last year, that details how the Association would respond to a financial shortfall; and

An incident-management plan developed by the national office staff that could be implemented at NCAA championships if a disruption occurs.

In its report, Standard and Poor's said the upgrade reflects the NCAA's dominant position in college sports, and the Association's high level of budgetary flexibility in the event of a sharp drop in revenue and its low debt burden relative to assets.

The report also cited the NCAA's expectation of no additional debt issuance, the favorable and certain terms of the television contracts, and the reserves and unrestricted net assets that have grown since the issuance of the bonds in 1999.

"The stable outlook reflects the anticipation that the NCAA will be successful in maintaining its levels of unrestricted net assets and cash and investments relative to operations," the report said. "Standard and Poor's also expects that the television contract will generate the levels of revenues that are expected through fiscal-year 2013 and that no additional debt will be issued during the next several years."

"Though the upgrade in rating has practical implications, the more important piece is the outside validation of the NCAA's financial decisions and the Association's contingency plans in case there is a disruption in our revenue stream," said NCAA Chief Financial Officer Jim Isch. "The fact that the NCAA has been practicing for disruptions, strategizing about how to handle them and determining who needs to be involved -- all as part of reducing the impact that an event could have on our finances -- gives bond-holders more confidence that we can meet our obligations."

Association-wide issues

The Executive Committee also discussed two core-principle matters during its meeting that have Association-wide implications. The first regards recent concerns from the NCAA membership about institutional participation in competitive events sponsored by companies or businesses whose ideals and values may not be compatible with the Association's principles of student-athlete welfare and nondiscrimination.

The issue was raised when several Division I men's and women's golf teams participated in the Hooters Collegiate Match Play Championship, a certified event held this year. Several NCAA members were concerned that the event sponsor may be construed as a business that portrays women in a disrespectful, demeaning or degrading manner and therefore is not an appropriate sponsor for an NCAA event.

Historically, the Division I Championships/Competition Cabinet's certified contests subcommittee has not considered the sponsorship of such events to be a factor in the certification decision. The events simply are required to submit an executed contract with a sponsor, and the ideals and values of the sponsor are not a factor in the certification decision. The subcommittee also believes member institutions have the autonomy to choose events in which to involve their teams.

The NCAA encountered a similar situation recently when several basketball events were scheduled to take place in facilities that offered sports wagering. Those events also were certified without regard to the locale. That issue was addressed legislatively, however, since NCAA legislation regarding gambling activities is clear. The issue of corporate sponsorship of college sports events, though, has not been legislatively defined.

Though the certified events subcommittee will continue to certify events based on existing parameters, the Executive Committee approved the following statement of principle for institutions to use as a guideline when evaluating whether to participate in certified events:

"A guiding principle of the NCAA is that it promotes an atmosphere of respect for and sensitivity to the dignity of every person and equal treatment for all individuals regardless of race, gender or sexual orientation. Member institutions should determine whether the sponsor of an event depicts any student-athlete subgroup in a disrespectful, demeaning or degrading manner before aligning with corporate entities and participating in competitive events, including the corporate sponsorship of such events."

NCAA President Brand said, "I strongly believe the membership has an obligation to each student-athlete to promote this principle and not involve its student-athletes in any event aligned with a corporate sponsor that may hold a conflicting system of values or business practices."

The Executive Committee also ruled on a playing-rules issue that had not gained an Association-wide consensus in the governance structure. The issue concerns a proposal from the NCAA Men's and Women's Soccer Rules Committee to adopt a zero-tolerance language-abuse policy for intercollegiate soccer contests (see related story, page 5).

Because playing rules must be common among divisions, the proposal required the groups in the governance structure with playing-rules oversight (Division I Championships/Competition Cabinet and Divisions II and III Presidents Councils) to reach consensus. While Divisions II and III supported the measure, Division I was opposed, citing the fact that soccer already has rules in place that give officials the discretion to punish players and coaches for abusive language or gestures. The cabinet also was concerned that the policy would be arbitrary if applied only to soccer.

The NCAA Playing Rules Oversight Panel, a group composed of championships committee members and charged with providing input to the Executive Committee in such disputes, had recommended passage of the measure. Ultimately, though, the Executive Committee agreed with Division I in believing a zero-tolerance measure is not the right approach. The Executive Committee did, however, support a substitute motion that implores officials in all sports to enforce the existing rules that pertain to player and coach behavior. The Executive Committee also charged institutions and conferences with ensuring that the officials they hire for their contests follow those rules.