Over the past few months, COVID-19 has sent the global economy into a freefall. On Thursday, the virus found yet another economic victim: Division-I athletic programs.
The NCAA Board of Governors voted unanimously Thursday to distribute $225 million to Division-I member schools, a 62.5% decrease from the expected $600 million. The decision could have a crippling effect on mid- and low-major programs, which will be forced to make decisions regarding their future athletic budgets.
The move could force UB to adapt to a new financial reality.
UB Athletic Director Mark Alnutt acknowledged these challenges in an interview with The Spectrum on Monday.
“The biggest consequence is cancelling the NCAA tournament, in which the majority of those monies are distributed back to the membership,” Alnutt said. “That has essentially been reduced to about 35% of what we had expected.”
Alnutt said UB Athletics has budgeted “conservatively” for the 2019-20 fiscal year, but that he is now focusing on the 2020-21 fiscal year, which is a big “unknown.” Some D-I programs may have to reduce staffing or freeze salaries, but Alnutt said UB Athletics has not yet had those conversations.
“Not at this time,” Alnutt said. “What we’re trying to do is forecast what 2021 looks like as it pertains to where we’re currently at with this pandemic. … What we’re trying to do is gather as much data as we can to make sensible decisions.”
Michael V. Drake, chair of the NCAA Board of Governors and president of The Ohio State University, said in a statement Thursday that the decision to cut revenue distributions is “forward-focused,” even if it will have a negative impact on member schools’ finances in the short term.
“We are living in unprecedented times not only for higher education, but for the entire nation and around the globe as we face the COVID-19 public health crisis,” Drake said. “As an association, we must acknowledge the uncertainties of our financial situation and continue to make thoughtful and prudent decisions on how we can assist conferences and campuses in supporting student-athletes now and into the future.”
UB is one of 351 Division-I member schools that will be forced to adapt to the NCAA’s cuts to revenue distribution.
Of the $225 million distribution, $50 million will come from NCAA reserves and $53.6 million will be distributed as originally proposed through the Equal Conference Fund, which is split equally among Division-I conferences that are eligible to play in the men’s basketball tournament. The remainder will be proportionally distributed through the rest of the NCAA’s funds.
UB Athletics received about $1.7 million in NCAA distributions in 2018-19, which made up about 3.8% of total revenues.
UB Athletics is also bracing for cuts to other traditional revenue streams.
On March 23, UB Vice President for Finance and Administration Laura Hubbard sent an email to the student body addressing “prorated credits for certain other fees where services have been discontinued or curtailed due to the COVID-19 emergency.”
She wrote that “a calculated credit amount is being determined” by the administration for five fees, including the Athletics fee. In 2018-19, student fees were UB Athletics’ second-largest revenue source, at roughly $9.8 million.
Alnutt says the department is also trying to figure out how to approach asking for private monetary contributions, after COVID-19 has put the economy on a downward-spiral and forced people to evaluate their personal economic situations.
But most importantly, Alnutt said UB Athletics is bracing for the impact of cuts to direct government and institutional support. In the 2018-19 academic year, these sources accounted for nearly $20 million of Athletics’ roughly $46 million revenue totals.
“We are looking to see how [COVID-19] affects the budgets, especially the state budgets,” Alnutt said. “As we try to forecast the future, what does that look like in terms of what type of assistance universities have? Not just athletic departments, but universities in general. Obviously if there are reductions in universities, there is going to be a reduction from an athletics standpoint.”
Still, this is an evolving situation and Alnutt said he isn’t ruling anything out.
“Are there certain things on the table we might need to discuss from a membership standpoint within the NCAA — amount of grant aid, amount of sports sponsorships, what have you?” Alnutt said. “I think every discussion right now is on the table, and unfortunately, I don’t think we’re going to have a clear answer until we have a clear idea of how long this pandemic will last and how long the economy will take to recover.”
Justin Weiss is the senior sports editor and can be reached at justin.weiss@ubspectrum.com and on Twitter @jwmlb1.
Justin Weiss is The Spectrum's managing editor. In his free time, he can be found hiking, playing baseball or throwing things at his TV when his sports teams aren't winning. His words have appeared in Elite Sports New York and the Long Island Herald. He can be found on Twitter @Jwmlb1.
