NCAA News Archive - 2005

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Questions being answered after NCAA's NIT purchase
Meaningful enhancements are on the way


Sep 12, 2005 10:01:06 AM

By Gary T. Brown
The NCAA News

While the NCAA's acquisition of the preseason and postseason National Invitation Tournaments last month ended an argument that took four years to settle, it also led to questions that will have to be answered more quickly if the purported benefits of the deal are to be realized.

New York University President John Sexton and NCAA President Myles Brand were adamant at the August 17 announcement that positioning the NCAA in the NIT driver's seat was good for men's basketball. At the time, though, few details were evident to support the rhetoric. All that was made available was that the NCAA would acquire the two events, that they would stay in New York City for at least five years and that the Division I Men's Basketball Committee would not select the NIT fields.

The rest of the logistics were left to a comprehensive and now ongoing review that probably will unfold in fits and spurts over the next several months. But after just three weeks of what Brand called "double-time work" by NCAA officials, the bigger picture already is becoming somewhat clearer.

First, the deal itself technically is not official. Though the words "effective immediately" were used at the announcement, the asset purchase transaction isn't expected to close until mid-September. Practically, however, NCAA officials are making decisions about the tournaments at this point.

One of them is that the NIT preseason and postseason assets will be placed in what will be called the NIT, Limited Liability Company (LLC), which receives the NCAA's nonprofit standing but will be legally recognized as a separate entity for purposes of managing the NIT tournaments. The NCAA will be the NIT LLC's only member. The NCAA Executive Committee authorized NCAA President Brand to create a LLC to carry out the requirements of the settlement and the asset purchase agreement while at the same time provide opportunities to enhance the NIT assets.

"The LLC was a strategic decision -- we did not want to mingle the NIT assets with NCAA championships assets," said the NCAA's Greg Shaheen, who as vice-president for Division I men's basketball and championship strategies has helped oversee decisions regarding the NIT since the acquisition. "This was done to separate the NCAA's contractual obligations with CBS and ESPN under the bundled-rights agreements, given that certain operational agreements already are in place regarding the acquired events."

Shaheen said the LLC will be managed by a group still to be selected by the NCAA.

Whoever comprises it will have to swing into action quickly, as the 2005 preseason NIT tips off with four games November 14 and four more the following day. This year's preseason event will not change much, if at all, in the way it is administered. Sixteen teams already have contracted to play: Alabama, Army, Boston University, UCLA, Drexel, Duke, Manhattan, Memphis, Miami (Ohio), Missouri, New Mexico State, Princeton, Sam Houston State, Seton Hall, Temple and Wisconsin-Milwaukee. The semifinals and final once again will be held in New York City.

"Given the short time frame before the preseason event, the focus will be to deliver the quality basketball that participants, institutions and fans have come to expect over the years," said NCAA Executive Vice-President Tom Jernstedt, whose oversight of the Division I Men's Basketball Championship spans more than three decades.

Jernstedt said the NIT may borrow a variety of NCAA staff, along with subcontractors and others, to conduct the events. He also said the NIT staff has been cooperative throughout the transition and receptive to the new organization.

Antitrust examination avoided

The entire issue came to a head when five New York-area schools comprising the Metropolitan Intercollegiate Basketball Association (MIBA), the parent organization of the NIT, sued the NCAA in 2001 over a rule that prevented NCAA members from spurning the Association's championships to participate in another postseason event. The MIBA -- Manhattan, St. John's University (New York), New York University, Fordham University and Wagner College -- filed an antitrust claim that the rule had illegally injured the postseason NIT, which began in 1938, a year before the NCAA tournament was established. The NCAA countered that its member schools were within their right to create the rule in 1982, and that they did so primarily to protect more fledgling championships in other sports from alternative competition.

The two parties seemed unlikely to settle as recently as August 1 when the trial began. MIBA counsel sought damages and legal fees that, when trebled as they would be in an antitrust case, would have mounted into the hundreds of millions of dollars. Then, surprisingly, jurors were sent home August 16 when lawyers told the judge in the case that an agreement was imminent.

President Sexton of MIBA-member New York University said the settlement was prompted by each side "working hard" to listen to the other's desires. In the MIBA's case, Sexton said, what members coveted most was a healthy future for the NIT events as New York icons. They believe the NCAA's long history of championships expertise gives them that.

Suddenly, what had been perceived as a contentious legal battle produced instead an agreement both parties celebrated as being good for the game. Sexton and NCAA President Brand told reporters August 17 that regardless of the past, they were excited about the agreement's effect on the future. "Even counter-pointed relationships can turn on a dime and become wonderful," Sexton said. "Today we celebrate the fact that there is a tremendous mutuality of interest."

Basketball coaches also seemed pleased, with several saying publicly that the agreement was indeed a positive step. Now, a month later, National Association of Basketball Coaches Executive Director Jim Haney said that sentiment hasn't changed.

"What the NCAA saw in this suit was not just a settlement, but a way of using its influence, extending its reach and sending its messages beyond March. Having the NCAA operate the preseason NIT creates an opportunity to make a more distinct beginning to the season," Haney said.

Big East Conference Commissioner Mike Tranghese said coaches felt that having the NIT and the NCAA battle it out legally was not healthy for men's basketball. "The NIT has been an important part of the fabric of college basketball," he said, "and the agreement gives the NCAA the opportunity to make the NIT better than it's ever been."

The NCAA's Shaheen echoed that his discussions with various NCAA constituents of the agreement also have been well received. He said LLC officials already have met with student-athletes, coaches, athletics directors, commissioners and the media to gather feedback, input, experiences and suggestions as to how to best approach the future of the events. "The collection process has been extraordinary and the feedback most meaningful to where the future can take the NIT to benefit all involved," he said.

Ironically, though, while the litigation may have been settled, the core antitrust issue was not addressed. The settlement was reached before the proceedings could indicate whether jurors were buying either side's arguments. And, in effect, the NCAA acquired the litigant by purchasing the NIT.

Even though the NCAA believed it had a solid defense, President Brand said the amicable agreement trumped a bitter court battle.

"I prefer to resolve issues between our member schools and the Association in some other way than through litigation," Brand said in his monthly correspondence to presidents and chancellors. "Though it took us some time and part of a trial to get there, this particular resolution accomplishes that. The NIT gains the benefit of NCAA resources and expertise in championships administration, and the NCAA, through the LLC, gains the opportunity to turn the pre- and postseason NITs into an outstanding events."

Ideas for the future

How that will be done remains to be seen. No firm decisions have been made about the postseason event for 2006, other than that the Division I Men's Basketball Committee will not select the field. One of the models being considered is a VIP/blue ribbon panel being established for selection purposes. Brand has been clear from the outset, though, that whatever process is used will be fair. A criticism that emerged from some onlookers regarding previous selections was that television interests drove the match-ups. Brand said that concern will be ameliorated.

Under discussion in fact is whether the postseason NIT might even be a landing place for regular-season conference champions that are not selected to the NCAA tournament. Several teams annually win a regular-season crown but lose the AQ in their league's postseason tournament, and then are not selected for the NCAA field based on their season credentials and are not chosen for the NIT based on their fan base or broadcast attractiveness. An NCAA-guided selection process would be more merit-based.

Haney said that's an example of why most coaches are happy with the new agreement. "That accountability piece," he said, "and the 'everyone gets a fair shot' component that is so intrinsic in the NCAA tournament selection process will now extend to the postseason NIT."

Other enhancements being discussed include everything from when the games are played to how NIT champions are recognized. Any dramatic changes, though, probably would not occur until after this year. Tranghese said the preliminary ideas he's been privy to "are ones that anyone associated with college basketball would be excited about."

Shaheen did say, though, that there is no credence to rumors that the NIT postseason may be morphed into or combined with the NCAA tournament.

"We have long said the NCAA Division I Men's Basketball Championship model of 65 teams serves our membership well," Shaheen said. "Our focus is to assure that the postseason NIT is a meaningful and exciting complement to the Division I Men's Basketball Championship. Along with the NCAA's championship, it connects the present to the past of college basketball. We will take time to study the best way to make this event attractive to fans and participants alike."

ESPN's contract to broadcast the postseason NIT runs through the 2010 tournament. Shaheen said no plans have been envisioned after that point. He noted that CBS supports the acquisition, and that the NIT LLC will work with NIT rights-holders, including ESPN, to explore opportunities for interested NCAA corporate champions, partners, and licensees whose rights are granted through CBS by the NCAA's contract with CBS.

There also is the matter of how the $40.5 million acquisition and $16 million settlement will be paid. NCAA President Brand at the August 17 announcement said the five MIBA schools each will receive $1 million annually over the next nine years. The money, Brand said, would come from annual reserves, insurance and other existing sources. While details have not been finalized, Brand stressed that payments would not be funded from any reduction to the revenue distribution plan.

The preseason NIT also may be affected by legislation that had been tabled regarding certified events and the maximum number of regular-season basketball contests. At its April legislative meeting, the Division I Management Council paused on three proposals (Nos. 04-40-A, B and C) that modify playing and practice seasons in various sports, including basketball.

The proposals not only amend the maximum number of contests, but they also eliminate the NCAA's certification of events, which would negate the "two-in-four rule" that restricts teams from playing in more than two certified events over a four-year period. The Council tabled the measures until the conclusion of the MIBA case, and the group expects to act on the proposals at its January meeting.

 



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