Nearing of the Green – Revenue Distribution February 2006
What happens when one person deeply involved with the NCAA Division I Women’s Basketball Championship says that it operates at a deficit while another, equally involved, says, simply, “You can immediately put to rest the Women’s Championship is a five million dollar losing enterprise. It’s simply flawed to make that statement.”
Well, if you’re me, you step away from the question of numbers and ponder the ever-nearing tipping point: What might the practical, psychological, and even philosophical impact of being able to say, “Yes, the women’s tournament actually earns money.”
Anyone involved with women’s sports at any level knows the issue of money has been a constant theme. The most dramatic example would be in the legislation of equal funding at the collegiate level because of Title IX. Subtler, and not so subtle, manifestations include equating a sports importance or “legitimacy” with its ability generate revenue.
“That’s so wrong, for people to judge the value of the enterprise by whether it makes money,” said Jim Isch, NCAA Senior Vice President for Administration and Chief Financial Officer. “Now, I understand that we, as Americans who live in a capitalist society, tend to value things by money. But there’s a lot more that’s good about sports – and women’s sports – than money. Certainly we need to make money, but it’s about the student athlete experience and the value that athletics brings to the institution. There are many more values than just winning.”
And yet, wrongly, perhaps even childishly, I want to be able to say, “Yeah, we make money. So there.”
Some of that is related to an almost knee-jerk, instinctual reaction to defend the right of women’s basketball, along with other women’s sports, to exist. (Don’t you wish we had truly gotten beyond that?) As it relates to revenue, that translates into being able to show that women’s basketball is “earning its keep,” which, in turn, can be a source of both pride and pressure.
Is there’s any doubt that coaches are feeling that? “Did you see the number of coaches that were fired last year?” noted Muffet McGraw. “[Athletic Directors] are looking at women’s basketball differently. We’re definitely in the area where they’re wanting us to make money.”
But achieving revenue-generating status for the women’s game, be it through ticket sales, television contracts with ESPN or t-shirt sales, is not simply a moral victory. It has far-reaching repercussions: How do you allocate and distribute that revenue back to schools? Looking on the men’s side, we know that men’s basketball programs are significant contributors to the NCAA’s annual budget, and various distribution models return that money to their conferences and, in turn, to their institutions. Consider the following outline Isch shared during a 2004 teleconference on revenue distribution:
Our revenues for fiscal year 2002-03 were approximately $438 million. Eighty-five percent of these revenues came from television and media rights. Another 10 percent from the sale of championship tickets for a total of about 95 percent.
You can see the majority of our revenues are from those two major categories.
Expenditures during the same period totaled $428 million. Of this amount 61 percent or $260 million was distributed directly back to the Division I member institutions and conferences.
Another 10 percent went to support Division I championships. Seven percent went to support Division II and III members and programs. Seventeen percent was expended on association wide programming such as our catastrophic insurance program for all our student athletes, with the remaining 5 percent supporting management and general expenses of the NCAA national office.
Whether or not people agree that Women’s Basketball is currently a revenue generator and deserving of a distribution model, there is good reason for the NCAA to want it to become so. “Right now, from an intercollegiate standpoint, football and men’s basketball is maximized — and efficiently maximized — with the amount of dollars being generated, which not only helps their own sports, but absolutely helps every other sport and institutions,” said Bernadette McGlade, Associate Commissioner of the Atlantic Coast Conference. “If you’re going into the future, knowing that our costs are never, it seems, going down, to me women’s basketball, as your flagship sport, should be looked at really optimistically as the next opportunity to be able to maximize efficiently some additional revenue streams.”
Currently, though, even with a $162 million dollar ESPN broadcast contract and sold out Final Fours, Sue Donohoe, Vice President for Division I Women’s basketball says the field of 64 operates in a deficit. “Quite candidly, we’re healthy as can be at the Final Four level. We’re healthy at the regional level, much more so than we are at the first and second rounds level. We have done some things over the last several years to aggressively reduce that deficit,” she continued. Going to an eight-site/eight-team format not only reduced operational and travel costs, but also placed the Championship in a position to “grow in popularity, to generate excitement around the first and second rounds, and have that attention be maintained through the Regionals.”
Donohoe sees generating more ticket sales as the keystone to increasing Championship revenue. “Whether you’re talking revenue share or growth of the Championship, it’s of the utmost importance that we get healthy at the foundation of the tournament. In the first and second rounds, whether we’re walking in to a venue or we’re turning on ESPN or ESPN2, we need that venue having the feeling of being a Championship venue because you can’t get a ticket to it.” That feeling, combined with a quality product, will, in turn, be an important part of the next round of contracts in 2011. “Our focus is how to grow the championship day in and day out, so that when we do go back to the table we have a property that is attractive and viable.”
Of course, if (and when) women’s collegiate basketball is generating significant revenue, decisions will have to be made on how and to whom that revenue is distributed. That being said, there are differing opinions on the actual benefits of revenue distribution. “There are folks that say, if you put a revenue sharing program into place, then that makes a tournament bid more… I don’t want to say attractive, but on-campus, administration might say, ‘If we resource our women’s basketball program more, there’s a revenue share there, then there’s a return for that.'” Additionally, it can be argued that the revenue distribution model used by the men has added to the tremendous growth and parity of their game, increased scholarship opportunities and supported a more diverse range of sports.
But others oppose revenue sharing because of possible pitfalls, including over-commercialization and fears that a distribution system might simply institutionalize a “the rich getting richer” syndrome. “When we walk in to the world of revenue sharing, we also walk in to some other issues,” said Donohoe. “What does it do to women’s collegiate basketball model? How does it impact it from the recruiting standpoint? From a student-athlete’s well-being standpoint? Those are all questions that have to be raised and discussed.”
To that end, I would recommend using the Knight Commission on Intercollegiate Athletics (http://www.knightcommission.org) as a resource. The Commission was formed in the late 1980’s in reaction to a number of scandals (recruiting violations, graduation rates under 30%, and severely under-educated athletes) that negatively impacted the public’s perception of higher education and college athletics. Members of Congress became concerned and there was a possibility they might get involved in some sort or regulation of college sports. “It was an effort by University presidents,” explained Executive Director Amy P. Perko, “to say, ‘Let’s clean up our act and let’s show that college presidents can get this on the right path.’ And the right path needs to be through presidential control with an emphasis on academic integrity, fiscal integrity and a certification process to verify that integrity.” The work of the Commission culminated in the publication of a powerful report on the state of academics and athletics and led to the adoption of the 1991 Public Disclosure Act of Graduation Rates and the Equity in Athletics Disclosure Act.
Since then, the Commission has been very active in supporting the NCAA’s redefining of revenue distribution methods. In 2001, they additionally recommend that, by 2007, teams that don’t graduate at least 50% of their players not be eligible for Championships or post-season play. Another suggestion is that revenue distribution plans be revised so that the revenues are distributed not only based on commercial values such as winning or losing, but on values such as improving academic performance, enhancing the athlete’s collegiate experiences and achieving gender equity.
“There have been changes throughout history, and the revenue distribution in its current form is much better than it was,” said Perko. “You have conference grants, broad-based distribution based on the number of sports sponsored and scholarships offered. They also have special assistance programs for all student athletes, and academic enhancement funds.” The Commission is also supportive of the concept to provide financial incentive to schools for high performances academically and for high graduation rates considering that, while there are disincentives for poor achievement, if you’re going to reward wins on the court, you should also honor success in the classroom.
“There’s nothing wrong with the fact that college sports have grown in interest and are in a position to create revenues. However, that should not be the focus and purpose of why we sponsor sports,” said Perko. “At the time that becomes the overriding factor in decision-making, then that’s the time when you have to look at, ‘Are we treating this as a professional sport or an amateur sport that is here for the educational experience of the athlete?'”
“With this issue there is a certain sensitivity to it,” acknowledged McGlade. “When you’re talking about revenue distribution there are dollars there. Everybody always fights for dollars. Obviously if they’re being allocated in one way, they’re being redirected from something else. But I also think that it’s a really healthy, positive discussion, and that there should be no fear of having it,” she added. “It’s not something that can be resolved immediately, but, if you ever want to move in that direction, it has to be discussed on the front end. There has to be a methodical planning. You’ve got to decide when is the right time, what are the parameters and guiding principals.”
What role women’s basketball coaches play in these discussions, be it gathering information from Sue Donohoe, asking to be part on the next television contract committee, or just shooting the breeze about it with their fellow coaches, is very much up to the individual. “I’ve been a coach,” said McGlade. “For them to have enough hours in the day to be thinking of these distribution mechanisms, it’s just a bit much. Hopefully their administrative support teams around them are doing their job so that coaches have the opportunity to focus on recruiting the right student-athlete, keeping them in school and winning games.”
Mindful of history and the progress of the women’s game, Donohoe knows that 15 to 20 years ago they were having the same types of discussions on the men’s side. The difference is women’s basketball can learn from their successes and missteps. “We will not shy away from initiatives to help grow the game and continue to protect the game. We are in a growth stage, but we want to make sure we grow in a healthy and right way. We don’t want to lose some of the things that make us what we are.”
That being said, women’s coaches are unquestioned stakeholders in this matter, and whatever decisions are made, it will have an impact on them. WBCA CEO Beth Bass remembers when the fight was simply to get the tournament games on TV. Now, it’s a rare night when you don’t have a choice of three or four. “When we experience success, the pressure cooker goes up ten-fold on our coaches,” said Bass. “Sometimes the devil is at the bottom of the wishing well. We need to look at how the men allocate their rights and fees and decide if we are we asking for something different or just the exact same way. How do we want to build this? How do we want to be different than the men’s model? How to we want to build this together?”
NCAA Revenue Distribution Plan 2005-06