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DII presidents adopt new long-range budget plan

By David Pickle
NCAA.org

After 18 months of prioritizing, analysis and discussion, Division II has a new long-range budgetary plan.

At its spring meeting Thursday in Indianapolis, the Division II Presidents Council approved a plan that provides the division with financial structure through 2023-24 when the NCAA’s media rights agreement with Turner and CBS will expire.

The extended budget provides for annual financial growth for Division II championships and other prominent programs while also allowing for the addition of up to 75 new member institutions over the 14-year period.

Council vice chair Pat O’Brien, president of West Texas A&M University and chair of the Long-Range Projections Task Force that developed the plan, highlighted several principles that guided the long-term budget:

• It is consistent with Division II’s strategic plan and strategic-positioning platform.
• Championships are the highest priority, with the necessary funding provided for institutions and student-athletes to compete.
• Current active member benefits are preserved.
• Membership growth is accounted for.
• Sufficient reserves are provided.

Division II is entitled to 4.37 percent of NCAA revenue, as described in Constitution 4.01.2.1. The new media rights agreement (the NCAA’s primary source of revenue) will expand by about 3 percent annually, meaning that Division II’s annual allocation will grow from $32.9 million this year to $43.7 million in 2023-24.

The long-range budgeting exercise would have been relatively simple if the number of member conferences and institutions stayed constant over the period. However, the Long-Range Projections Task Force determined that the Division II membership values growth, especially in regions where current membership is sparse.

Because the 3 percent annual increase in revenue would not be enough to accommodate significant additional membership over time without compromising benefits for existing members, the Long-Range Projections Task Force freed additional resources by reducing the built-in surplus for championships by $1 million annually then indexing a 2 percent annual increase off the reduced number (proposed championships expenses actually dip in 2011-12, but only because the built-in surplus will be reduced). The plan also relied on the purchase of business-interruption insurance to reduce the amount of reserve needed in case a loss of NCAA revenue affected Division II.

Those approaches, along with the annual expansion of overall revenue, enabled the long-range budget not only to provide for the 2 percent annual growth in championships funding but also for a 2 percent annual expansion of the Division II Enhancement Fund and the conference grant program. In addition, the long-range budget accommodates valued Division II programs such as championships and regular-season telecasts, the Division II National Championships Festival, year-round drug testing, and matching grants to aid professional development for women and minorities.

Council chair Drew Bogner, president of Molloy College, said the outcome was the result of hard work and the inclusion of interested constituents throughout the Division II membership.

“It was very collegial,” Bogner said. “Early on, there were some conversations about perhaps some shifting of some priorities, minor conversations, but clearly it was more of an educational process. Once people understood what we meant and how we did things, we came to a conclusion that those priorities made sense.”

The management of membership growth − the other part of Division II’s long-range planning effort − was examined Wednesday during a joint meeting of the Presidents Council, presidential chairs of Division II conferences and Division II conference commissioners.

The group, about 60 people in all, considered legislative concepts developed by the Division II Membership Committee and considered at the April meeting of the Management Council.

Most of the concepts were accepted without discussion, but the talk did reveal concerns over whether a collection of prospective member institutions should be able to enter concurrently as a new conference (the approach on the table requires separate processes, which some regarded as a creating a chicken-and-egg problem). Some participants also thought a proposed five-year waiting period for automatic qualification for new conferences would be punitive for student-athletes in those conferences.

“I thought there were a lot of very, very good questions that were asked,” O’Brien said. “Some of the questions dealt with clarifications, the way the language was written. Some individuals were not clear as to active membership requirements for institutions or conferences and they just wanted a better understanding. I think it really served a good educational purpose.”

Most members seemed satisfied with the explanations they received, especially the one about automatic qualification, which includes a recommendation to maintain at least 50 percent of the fields for at-large selections. Ironically, concern had been expressed at the Management Council meeting earlier in the month that the five-year waiting period for AQ was not long enough.

Bogner acknowledged that the discussion was occasionally difficult, although he said much of the challenge came from the conversation being based on possible legislation.

“Part of what I felt we were struggling as a group to talk about various scenarios that you knew could play out,” he said. “People were testing Scenario A, Scenario B, Scenario C, and some of those scenarios were clearly not hypothetical but ones that they suspected could be happening now or might happen.”

Still, Bogner said the inclusive aspect of the discussion was good.

“If we truly want to make good decisions, then we have to spend the time to look at it from multiple perspectives and have an open conversation,” he said. “So for me, I thought it was a great meeting and highly beneficial.

“I didn’t walk away feeling that anyone came away from that meeting feeling that their point of view wasn’t heard or that the general sense is a bad thing. I think everybody understands the general way in which we’re moving and wants that to happen. But let’s make sure that we don’t have an unintended consequence of the legislation.”

The plan remains for legislation to manage membership growth to be considered at the 2012 Convention in Indianapolis.

In other action at its April 27-28 meeting, the Presidents Council:

• Received a report from Pittsburg State officials detailing their experience with a random federal Title IX review at their institution.
• Heard from NCAA researchers Todd Petr and Tom Paskus on Division II student-athlete experience information from the GOALS and SCORE studies.
• Agreed to sponsor legislation for the 2012 Convention to modify the winter-break period so that the seven consecutive days off would dictated by where Dec. 20 falls on the calendar (a chart would be added to the Division II Manual identifying the particular break period 15 years out). The proposal is a follow-through to a Presidents Council commitment made at the 2011 Convention.
• Requested several modifications to a proposed Model Strategic Communications Plan for member institutions.
• Elected a new Region 1 representative to the Council to replace Cheryl Norton of Southern Connecticut State. The new member will be announced next week, pending notification.