Lost Revenue From COVID-19 Crisis Prompts Colleges, Universities To Urge NCAA Waiver

Jackson Lewis P.C.
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Even as some states claim the immediate effect of the COVID-19 pandemic is starting to plateau, the potential financial impact of the pandemic on college athletics is just starting to emerge.

As college and universities assess potential budget shortfalls as a result of the $375-million loss of their portion of revenue distribution following the cancellation of the men’s and women’s basketball national championship tournaments and the elimination of all NCAA spring sports competitions, university presidents and athletic directors are being forced to analyze operating budgets, seek solutions, and make hard decisions regarding their sports programs for the 2020-21 academic year.

In a joint letter submitted to NCAA President Mark Emmert, the commissioners of five Division I conferences, asked the NCAA to waive certain NCAA requirements and provide waivers from compliance for a four-year period. The leaders of the American Athletic, Mountain West, Mid-American, Sun Belt, and Conference USA conferences have collectively asked the NCAA to eliminate its current requirement that a university sponsor a minimum of 16 intercollegiate varsity sports to remain a member of the Football Bowl Subdivision. The group of five commissioners also seeks to change current mandates that require schools to:

  • Offer a minimum number of athletic scholarships per year
  • Average at least 15,000 in attendance for home football games
  • Play a minimum number of total and home games in sports such as football, basketball and baseball

Acknowledging the challenges that universities face during the current COVID-19 environment, the commissioners’ letter pointed out that the

“financial challenges being faced include significant decreases in state appropriations, substantial losses in endowment valuation, and a downturn in philanthropic activity.”

Mountain West Commissioner Craig Thompson stated, “Other conferences are engaged in the same process and this collaborative request from the Group of Five is intended as the sort of creative alternative these unprecedented times demand. The waivers of NCAA legislation would create a permissive environment, allowing each institution and conference across the Division I landscape the necessary flexibility to determine how best to proceed in making financial adjustments which are intended to preserve sports and opportunities for student-athletes.”

The letter from the five conference leaders indicates that schools are assessing the potential for additional revenue loss from the delay or cancellation of part or all of the 2020 college football as that is becoming more realistic with each passing day.

“The potential loss of football-related revenue could eliminate revenue currently utilized to balance costs for non-revenue generating sports on a temporary basis.

This reality has already been felt. The University of Cincinnati has announced the elimination of its men’s soccer program and Old Dominion has confirmed that its wrestling program is being eliminated.

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