Daily Compliance Item- 9.30.16- Current Event

NCAA payouts may reward academic skills, not just athletic ones


For decades, colleges’ performances in the NCAA men’s basketball tournament have had an impact on how the association annually divides hundreds of millions of dollars in TV revenue among its Division I conferences.

Now, the NCAA is set to vote on making the academic performance of athletes in all sports a factor for the first time.

A special committee has recommended to the NCAA’s top governing boards that they let athletic departments’ ability to meet at least one of three academic benchmarks annually determine how much money their respective conferences receive from a new pool of money that would be funded by future increases in the association’s media rights fees.

The recommendation is included in the final report of the NCAA Division I Values-Based Revenue Distribution Working Group, a copy of which was obtained this week by USA TODAY Sports.

The NCAA Board of Governors and the Division I Board of Directors are expected to vote on the group’s recommendations during meetings scheduled for the last week in October.

The proposed academics-based distribution fund would debut in the NCAA’s 2019-2020 fiscal year. During its first six years, it would get 75% of the annual TV rights fee increases. That means it would start with nearly $12.7 million in 2019-2020, then rapidly grow to a little more than $105.4 million in 2024-25, according to the working group’s report.

At that amount — and based on the working group’s projection that about two-thirds of the more than 340 Division I schools will meet at least one of the required benchmarks each year — a conference would get about $460,000 for each school that qualifies.

After that, the fund would continue growing annually, but by much smaller amounts.

The academic-based fund’s growth would not prevent increases in the NCAA’s other Division I revenue distribution funds, including the one based on schools’ performance in the basketball tournament. And the basketball fund would continue to have more money in it each year than would the academic-based fund.

According to the NCAA’s most recent audited financial statement, it is due to receive $827 million in 2019-2020 from its current 14-year, $10.8 billion TV and marketing deal with CBS and Turner. In April, the NCAA announced it had made an eight-year, $8.8 billion extension of the CBS/Turner deal.

The NCAA working group’s final report states that the group initially had suggested that 100% of the annual growth in the media rights deal be allocated to the academics-based fund, but feedback from the association’s membership prompted it to alter its approach.

Schools would annually earn an academic fund payment for their conference if their overall athlete populations meet any of three criteria:

– An Academic Performance Rate (APR) of at least 985 for the previous year. The APR is based on whether athletes maintain their eligibility and return to school for each academic term.

– A Graduation Success Rate (GSR) of at least 90 for the most recent year. The GSR is based on the number of athletes who graduate within six years of entering college, with school’s receiving consideration for athletes who transfer or leave school early while in good academic standing.

– A Federal graduation rate for the most recent year that is at least 13 percentage points greater than that of the entire undergraduate student body. Under the Federal rate, if an athlete initially enrolls at one school, then transfers, the athlete is deemed to have not graduated from the initial school and counts against its graduation rate, regardless of the athlete’s academic standing at the time or their eventual academic outcome.

Each conference would receive money from the NCAA based on the total number of payment units earned by its member schools. The conferences would then be able to distribute the money based on their own revenue-sharing systems. Thus, it would be possible for a school that does not earn an academic-based unit to receive money from the fund anyway — in much the same way that schools whose teams do not play in a bowl game or NCAA basketball tournament receive shares of their conferences’ revenues from those events.

Once money from the academic fund reaches schools, they would be allowed to use it for any purpose — not just for academic initiatives. Other Division I revenue distribution funds carry restrictions on how the money can be used.

College presidents’ interest in examining the creation of an academic-based distribution fund has roots in an August 2015 meeting organized by the NCAA that was followed by the working group’s creation. Though the new TV deal makes it easier for the association’s membership to proceed now, groups such as the Knight Foundation Commission on Intercollegiate Athletics have pushed such a move for more than a decade.

This article was selected for educational purposes only.

Jennifer M. Condaras
Deputy Commissioner, NCAA Relations & Administration
Colonial Athletic Association

The opinions expressed in the Daily Compliance Item are the author’s and the author’s alone, and are not endorsed by The COLONIAL ATHLETIC ASSOCIATION or JumpForward. The Daily Compliance Item is not a substitute for a compliance office, case specific research, or the NCAA Bylaws. Do some homework, ask around, and get it right.

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