Basketball Fund rewards success
NCAA distribution plan widens revenue gap in Division I
By Kyle Nagel
Dayton Daily News
Carolyn Schlie Femovich woke up March 19 with a strange feeling. The previous night, the Patriot League executive director watched Bucknell — a school of 3,500 students in Lewisburg, Pa. — shock Kansas for her conference's first-ever NCAA tournament victory.
"It was so good the next day to think, 'We won a game,' instead of, 'Boy, that was close,' " Femovich said. "The whole league benefits from that, from a credibility standpoint."
The league also will benefit in the checkbook. Bucknell's win means that the Patriot League will receive at least an additional $1.2 million from the NCAA's Basketball Fund in the next six years.
The Basketball Fund is one of six parts to the NCAA's revenue distribution plan for spreading to members a portion of the association's 11-year, $6 billion contract with CBS for men's basketball tournament broadcast rights. It's a plan that gives an average of 47 percent of the money to the top six Division I conferences (out of 31).
In an age when the Southeastern Conference already earns 85 times the revenue of the Northeast Conference, the NCAA's distribution plan virtually assures that the gap will continue to widen through 2013, the final year of the CBS contract.
"It's not about fairness and unfairness, it's just the way it is," said Horizon League commissioner Jon LeCrone. "We've always had a voice in this process, although some people would view it as a small voice. As time wore on, most of these rules were made by what we would call the BCS conferences."
Valuable units
Those conferences greatly benefit from the rules, especially the Basketball Fund. Every participating school receives one "unit" for each tournament game played (excluding the national championship game). The unit worth increases each year — $152,037 this season to $280,661 in 2013. The units for each conference are totaled in six-year rolling periods and paid with the next year's unit value.
For example, because the Patriot League had never won a tournament game prior to this season, it had always received one unit each year. From 1999-2004, it totaled six units, which will be paid this month for $912,222 (using the $152,037 unit amount).
Other parts of the revenue distribution plan include the Academic Enhancement Fund (awarding "enhancement of academic-support programs for student-athletes") and the Broad-Based Distribution (awarding each sport sponsored above the D-I minimum of 14 and extra grants-in-aid).
No matter what fund, the big money goes to the big conferences. In 2002-03, the Big Ten Conference received $26.1 million from the NCAA. The Patriot League got $4.3 million.
In turn, according to tax records from the 2002-03 fiscal year, the Big Ten handed out about $10 million to each of its 11 members, an amount that totaled $109.8 million. The Patriot League, meanwhile, collected $387,500 in dues from its members.
"But," Femovich said, "the extra money from Bucknell's win could help reduce those fees."
While some are quick to criticize the plan for its top-heavy disbursement, NCAA officials say the revenue-sharing plan was accepted by the entire membership when the NCAA signed the first CBS contract in 1994.
"The decision was made based on the makeup of the committees at the time," said Joyce Collins, the NCAA's director of accounting. "Once we had a stable stream of revenue coming in, we set up the distribution."
Left behind
In 2002-03, the CBS contract comprised 85.6 percent of the NCAA's total revenue ($433 million). While the small conferences don't see much of that money, they also aren't doing as much to earn it, the big conferences say.
"In my opinion, it is fair," said Jim Delany, the Big Ten commissioner. "It's fair because it's far more than (smaller conferences) could ever receive if they were selling their product on their own. They don't add that much to the value. So, I think it's fair in the sense that if we were selling this in a pure market, probably 99 percent of the money would go to one-third of the schools."
From 1998-2004, the Big Ten received a total of $128.6 million from the NCAA, the top amount awarded to any conference during that period. Three others — the SEC, Big 12 and Big East — each received at least $100 million.
Meanwhile, the bottom five conferences — the Big South, Mid-Continent, West Coast, Horizon League and Metro Atlantic — failed to total $100 million ($89.4 million).
"You have to ask, 'What's our contribution to the thing?' " said Thomas Yeager, commissioner of the Colonial Athletic Association. "A football team can't function without a left guard, but the left guard isn't necessarily worth as much as your quarterback."
According to NCAA numbers, the gap will continue to grow. By 2013, the last year of the current CBS contract, the network will pay the NCAA $783.1 million to broadcast the tournament, a 45 percent rise from the current amount. At that point, if the revenue sharing follows the current average, the top six conferences will split $265 million and leave $298.8 million for the other 25.
Is it fair? There are arguments for both sides, and the debate continues.
"I testified in Washington, and they said these other conferences that don't have automatic qualification into the BCS, they only get a certain amount of money and that's unfair," Delany said. "I said, 'The thing we did that was a mistake was ever trying to be fair, because we provided them something that the marketplace wouldn't.' "
Contact Kyle Nagel at 225-7389.
