The list of potential calamities in college athletics these days reads like the four horsemen of a modern apocalypse: death, injury, terrorism, event cancellation.

Without a doubt, the management of NCAA risk has grown more complicated in recent times. The principal factors involve the increasing amount of money and exposure surrounding intercollegiate athletics, difficulties facing the insurance industry, and the events of September 11, 2001.

Mix those issues together and the result is a complex stew that will place large planning and financial commitments on the Association for years to come.

It is, says Pete Eshelman, simply the way things are.

"I think that any business in America is faced with a very dynamic environment," said Eshelman, president and chief executive officer of American Specialty, a risk-management firm that specializes in the sports industry. "Before 9/11, we all had exposure to terrorism. Every business in America had that; we just didn't focus on it. Post 9/11, we're focused on it.

"I think it's something you don't cower from. You just try to view the world for what it really is and not for what it's perceived to be. And you try to drive the organization in that environment."

Recognizing that need, the NCAA Executive Committee in April appointed a risk-management and insurance task force to assess the NCAA's current situation. The Executive Committee received the task force's recommendations in November and has forwarded the report to each division for comments.

The task force has looked at two different issues -- traditional insurance questions, especially those involving athletically related injuries, and safeguarding the Association's overall business interests through an effective risk-management program.

In fiscal-year 2002-03, the Association's annual insurance bill will be about $13 million, according to Keith Martin, NCAA managing director of finance and business operations.

Most of that -- more than $9.2 million -- will go toward the catastrophic injury insurance program, which provides up to $20 million in lifetime benefits to varsity student-athletes who are catastrophically injured during qualifying play or practice, or during travel related to those activities. The annual premium for that program has more than doubled since 1997.

Not all 9/11

As rapid as that cost acceleration has been, it may pale compared to the increasing costs of guarding against the unexpected cancellation of the NCAA's marquee event, the Division I Men's Basketball Championship. Last year, Martin said the NCAA spent about $500,000 on event-cancellation insurance, but that figure could grow to $4 to $5 million annually, depending on capacity limits and the type of terrorism insurance that is purchased.

The knee-jerk reaction is to blame 9/11, which certainly is part of the equation. However, it is only one part.

"The insurance marketplace is basically re-engineering itself," Eshelman said. "It's really not just because of 9/11. It's because the insurance industry has lost money for a decade for all kinds of reasons, and 9/11 just pushed the industry over the edge."

In such a climate, the NCAA's answer must involve more than simply writing larger checks for insurance premiums.

The International Olympic Committee, facing a similar situation, increased its financial reserves by 37 percent ($52 million) in case future Olympics are called off. The $192 million reserve would permit the IOC to continue operating for four years if the Olympics were scrubbed.

"The international political situation and the danger of terrorism means the insurance market is reticent against taking this kind of risk," IOC President Jacques Rogge told the IOC general assembly in November.

In a similar way, the NCAA is doing what it can to develop a financial plan, mitigate its risks and minimize insurance costs.

"Step one is to identify what your exposures are to potential loss, either from an injury perspective or litigation perspective." Eshelman said. "Then the most important initiative is what steps can you take to mitigate those losses from occurring."

As an example, he cited the painful lessons that the Association learned from the restricted-earnings case, which involved legislation from the early '90s that resulted in a $54 million judgment against the NCAA.

"The NCAA has taken a lot of measures internally with its legal department and the legislative review process to better protect itself from something like that happening again," Eshelman said. "That is probably more important than insuring that exposure."

Protecting NCAA events

The same principle can be applied to making it more certain that NCAA events come off as planned. Perhaps the most obvious element already has been dealt with through the continuing development of a comprehensive security plan for NCAA championships.

While the Association has enhanced security for its championships, no one can guarantee that events on which the NCAA depends for revenue will not be compromised. Terrorism and boycotts are among the bleak scenarios. Almost forgotten these days are the possibilities of traditional accidents such as airplane crashes or weather disasters.

With that in mind, the task force has recommended a financial disaster recovery plan to the Executive Committee. The plans calls for a six-step approach to protecting revenue from the Division I Men's Basketball Championship rights agreement in the event of a cancellation:

Beyond all of that, the task force recommended that the Association retain a crisis-management firm, not only to see it through a crisis but also to anticipate issues before a disaster occurs.

To that end, the Association has engaged the Inocon Group to review and further develop incident and crisis-management planning, to identify risk scenarios, to review and enhance security plans, and -- most importantly -- to provide training and practice simulations to determine if contingency plans are effective for the Association to make key decisions.

It all sounds apocalyptic, but Eshelman says it could be worse. In fact, he said that the NCAA has been rather forward-thinking and is in a better position than most companies or associations.

"The Association is in an enviable position relative to most businesses in America," Eshelman said. "You guys have some guaranteed income streams, so you can absorb some losses."

But Eshelman said that those income streams also carry a boatload of issues.

"That big television contract -- there are a lot of positives," he said, "but there's a lot of baggage that comes with that.

"And that is that you're viewed as being a big target."