The NCAA has received significant financial news from two major independent providers of credit ratings. Standard & Poor's Ratings Services has assigned its "AA" long-term rating to a series of NCAA revenue bonds, reflecting what the company calls "the Association's dominant position in college sports." And Moody's Investors Service gave the same line of bonds an "Aa2" rating for the NCAA's "stable outlook."

Both marks are comparable and represent a strong credit rating for the Association.

The financial vote of confidence prompted the NCAA Executive Committee at is October 27 meeting in Indianapolis to authorize the refinancing of about $9.6 million of outstanding bonds and the issuance of new debt of about $25 million to help finance the Association's recent purchase of the National Invitation Tournaments. Post-issuance debt, including interest, will be roughly $37 million.

University of Georgia President Michael Adams, who chairs the Executive Committee's Finance Committee, said the bonds to be refinanced originally were issued in
1999 for the NCAA office building furnishings and fixtures, and for the construction of the NCAA distribution center. Adams' committee recommended that the new money be used to buy NIT assets and/
or pay for settlement costs associated with the Metropolitan Intercollegiate Basketball Association (MIBA) lawsuit.

The MIBA had sued the NCAA four years ago, claiming that an NCAA rule precluding teams from participating in other postseason play if they were selected for an NCAA postseason tournament illegally harmed the NIT. In August, the two organizations reached a settlement that included the NCAA's purchase of the NIT for $40.5 million, plus an additional $16 million to settle the case.

Adams told Executive Committee members that the new money will be financed over a 20-year period, with debt service being paid from the proceeds of the preseason and postseason NITs.

Both Standard and Poor's and Moody's supported the transaction.

Adams said while short-term interest rates have been increasing, long-term rates have held flat, making it an attractive time to refinance and leverage the finance costs on the refunded issue with a new money issue.

"Financially, this transaction make good sense, as it allows us to save money on the old issue, while leveraging the refinancing costs with new money," Adams said at the Executive Committee's October meeting. "Moreover, it will limit the use of reserves for financing the MIBA costs."

Standard and Poor's indicated that its high rating of the NCAA revenue bonds "reflects phenomenal growth in television rights revenues, with a long-term contract guaranteeing growing levels of annual revenues through 2013." The company also cited several positive credit factors, including "good liquidity levels, with unrestricted resources equal to $184 million, or 41 percent of operating expenses." Standard and Poor's also valued the NCAA's strong management team and its recent implementation of a comprehensive strategic plan.

The company did point to the concentration of revenues from a single source (men's basketball) and a single corporation (CBS) as "offsetting factors." However, officials from Standard and Poor's told PRNewswire that they expect the NCAA "to be successful in maintaining its levels of unrestricted resources and cash and investments relative to operations."

"We also expect that the television contract will generate the levels of revenues that are expected through fiscal 2013 and that operating results will remain balanced," said Standard & Poor's credit analyst Marc Savaria. "As the Association begins to increase its quasi-endowment fund toward a goal of $500 million in the next several years while maintaining its strong operating performance and low level of debt, there could be positive implications for the long-term rating."

NCAA committee established to select NIT fields

The NCAA has announced a six-member committee that will select the fields and help determine the future direction for the two National Invitation Tournaments that the Association acquired earlier this year.

The NCAA purchased the two NITs in August as part of a settlement with the Metropolitan Intercollegiate Basketball Association, the entity that previously oversaw the tournaments.

Since then, the NCAA has established a limited liability company called the NIT, L.L.C., which now oversees the day-to-day operations of the NIT tournaments.

The six-member committee not only answers questions about who will select the field for the 2006 NIT postseason tournament, but also who will provide strategic direction for future events.

C.M. Newton, former longtime coach at Vanderbilt University and the University of Alabama, Tuscaloosa, and athletics director at the University of Kentucky, will chair the group.

Other members of the committee are:

* Gene Keady, who retired as Purdue University's head men's basketball coach in 2005 after 25 years at the helm;

* Reggie Minton, former head men's basketball coach at Dartmouth College and the U.S. Air Force Academy and current deputy executive director of the National Association of Basketball Coaches;

* John "Jack" Powers, former head men's basketball coach and athletics director at Manhattan College who has served as the executive director of the NIT since 1988;

* Dean Smith, former longtime head men's basketball coach at the University of North Carolina, Chapel Hill; and

* Carroll Williams, longtime head men's basketball coach at Santa Clara University who retired as director of athletics at the school in 2000.

Newton and Williams previously served as members of the NCAA Division I Men's Basketball Committee.

Greg Shaheen, NCAA vice president for Division I men's basketball and championship strategies, emphasized that the NIT selection committee will operate separately from the Division I Men's Basketball Committee, which is responsible for selecting the field for the Division I Men's Basketball Championship.

The NIT committee will evaluate the structure of the tournament's existing events and establish principles and procedures for the team selection process. The 2006 postseason NIT field will be the first selected by the committee. The teams for this year's newly named "NIT Season Tip-Off" were announced this summer.

Newton said he is eager to "forge the future of the NIT events."

"This is a great opportunity to take college basketball to the next level and provide an exciting start every season, as all roads lead to NCAA March Madness. I genuinely look forward to this opportunity," he said.

"The Preseason NIT," as the event was previously known, began in 1985 and has become the premiere early season tournament in men's college basketball. The field is composed of 16 teams, with the first two rounds held at campus sites. Some preliminary thought has been given to holding second-round games in future tournaments at predetermined sites. The semifinals and finals have been and will continue to be held at Madison Square Garden.

The postseason NIT currently provides for a field of 40 teams. The semifinals and final of that tournament also are conducted in Madison Square Garden.

Shaheen said the committee will review the size of both tournament fields. The panel will meet for the first time later this winter.

"The committee will be studying all the options," Shaheen said.