After the NCAA was forced to cancel the Division 1 men’s basketball tournament due to the coronavirus pandemic, college administrators have become concerned that college sports’ governing body will not be able to cover all of the revenue it will lose.
The NCAA, which depends on the annual tourney to rake in a good deal of its $1.1 billion yearly revenue, has about $250 million to $275 million in business-interruption insurance connected to the tournament, according to USA Today. That will help cushion the blow of the cancellation of March Madness, but major-college athletics directors are planning on the NCAA not being able to cover all of the revenue it will lose.
The NCAA is due to distribute $600 million to Division I schools and conferences this spring, but it seems more likely than not that figure will have to be reduced. By how much depends on the NCAA’s ability to tap its reserves and borrow money. “The economics of all this could definitely be extensive,” one athletic director told USA Today.
In a statement last week, the NCAA said it was “identifying and working through the considerable implications related to the decision to cancel remaining winter and all spring championships in response to the COVID-19 pandemic. While some decisions can be made quickly like the suspension of recruiting activity, others may take time to reach conclusion. As details become available, we will share with our membership and the public.”
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