By Barry Janoff
May 12, 2016: In a strongly worded report that both echoes and expands upon growing national sentiment regarding the financial state of college athletics, the Knight Commission on Intercollegiate Athletics called for the NCAA to "establish a new guiding principle for the use of NCAA revenues distributed to institutions from the March Madness tournament."
The Knight Commission, formed by the John S. and James L. Knight Foundation in October 1989 in response to "highly visible scandals in college sports," recommended that "100% of NCAA revenues received by institutions should be restricted to supporting athletes' education and providing them with appropriate health and safety benefits and protections."
Under current guidelines, 25% of NCAA revenues received by institutions are restricted to support athletes' education and provide other benefits, according to the Commission.
"The NCAA's revenue distribution policies haven't fundamentally changed in a quarter century, even though the revenues have expanded dramatically," Knight Commission chairman William Kirwan said in a statement.
In addition, the Commission "affirmed its strong support for altering the incentives in the NCAA's revenue distribution plan to reward academic outcomes and not just athletic outcomes."
To support its position regarding March Madness, the Knight Commission shared data showing that among schools that compete in the NCAA Football Bowl Subdivision, "the five-year growth rate for academic spending per student is up only 4%, while institutional subsidies for athletics per athlete have jumped 41%."
The Commission said the recommendation that 100% of NCAA revenues received by institutions be restricted to educational or health and safety purposes "establishes an important principle — national shared revenues received by institutions must be devoted to athletes' education and health and safety benefits and protections."
The Knight Commission offered that the NCAA's current financial reporting system "could be easily modified to implement the Commission's recommendation, which would enhance transparency and accountability for institutional use of NCAA funds."
The Knight Commission said that this "long-standing proposal" was supported by a preliminary report issued earlier this month by a special NCAA Values-Based Revenue Distribution Working Group.
That report, which was sent to Div. I institutions for feedback, included the proposal of awarding a portion of the money to schools for academic success by using increases in the NCAA's March Madness media rights agreement to create a new "academic achievement" fund, per the Knight Commission.
At present, nearly 40% of the more than $540 million in NCAA revenues annually distributed to Division I institutions is based on the appearances and success of teams in the NCAA Div. 1 Men's Basketball Tournament, according to the Commission.
These and other recommendations came about two months after the NCAA signed an eight-year extension with CBS and Turner, valued at $8.8 billion, for TV, digital and other coverage of March Madness through 2032.
That extended a a 14-year deal, which took effect in 2011, with CBS and Turner, for March Madness coverage, valued at $10.8 billion.
"The NCAA's revenue distribution policies haven't fundamentally changed in a quarter century, even though the revenues have expanded dramatically."
CBS has carried the tournament since 1982.
According to Kirwan, "We applaud the NCAA for considering changes that, for the first time, would allocate some NCAA revenues to institutions based on the academic outcomes of college athletes."
However, Kirwan said that the Commission believes there is a "real opportunity now to make more sweeping changes. We recommend that the use of all funds institutions receive from the NCAA be restricted to support athletes' education and to provide them with appropriate health and safety benefits and protections."
The Knight Commission on Intercollegiate Athletics, which met this week in Washington D.C., also included co-vice chairs Carol Cartwright, president emeritus, Kent State University and Arne Duncan, former U.S. Secretary of Education; Paul Tagliabue, former commissioner of the NFL; University of Oklahoma head men's basketball coach Lon Kruger; former college football player Marcus Lattimore; and Anna Nelson Spangler, chairman of the Spangler Companies.
Since 2005, the NCAA Men's Div. 1 Basketball Tournament has generated more than $8.7 billion in marketing, promotions and related activations from nearly 300 different marketers, according to research and media intelligence firm Kantar Media, NY.
In 2015, March Madness generated a then-record $1.19 billion in TV ad spend. That figure was topped this year, with final numbers still to be released.
Calling it "Marketing Madness,” Kantar said, "The NCAA has successfully monetized the sporting event through media rights fees and corporate sponsorship payments while creating a platform for marketers to reap benefits from advertising and promotional programs anchored around the games."
According to Kantar Media, 2015's $1.19 billion in March Madness-related TV ad spend was a 4.8% increase from 2014. The figure includes pre-game, game and post-game programming, as well as studio shows.
During its meeting, the Knight Commission also addressed other major issues relating directly to student-athletes.
During a panel examining NCAA amateurism rules and potential changes, Gabe Feldman, associate professor of law and director for the Sports Law Program at Tulane University, proposed a model that "would eliminate some of the current restrictions on college athletes using their names, images or likenesses (NIL) for financial gain."
According to Feldman, a new system that permits "non-game" related NIL payments, such as commercial endorsements, would not "unduly interfere with the NCAA's core goals" and that these changes "are more appropriate for college sports than a 'pay-for-play' model."
The Top Ten March Madness advertisers in 2015, of which seven were NCAA partners, spent $444.4 million on 2,103 units.
The list was topped by General Motors, which spent $93.3 million on 390 units.
Also in the Top Ten: AT&T ($75.2 million, 418 units), Capital One ($44.8 million, 186 units), Berkshire Hathaway ($41.4 million, 197 units), Coca-Cola ($40.9 million, 188 units), Southwest Airlines ($33.7 million, 163 units), Samsung ($31.2 million, 124 units), Nissan ($18.4 million, 133 units), Unilever $27.9 million, 168 units) and Allstate ($27.9 million,126 units).
AT&T, Capital One and Coca-Cola are NCAA top-tier champion partners.
NCAA corporate partners include Allstate, Amazon Echo, Microsoft's Bing, Buffalo Wild Wings, GM's Buick, Enterprise, Infiniti, Lowe's, LG, Nabisco, Northwestern Mutual, Reese's, Unilever and UPS.
Under a Knight Commission model, a fund "would phase in slowly but have significant effects on revenue distribution over time. By 2032, the end of the current media rights contract, funding awarded to institutions from the new academic achievement fund would nearly match the amount awarded to institutions based on men's basketball tournament appearances and wins."
According to vice-chair Duncan, "It is not only important that the NCAA set a clear and high bar as a matter of principle for use of the revenues it distributes but that it act as soon as possible to do so, especially as NCAA revenues from March Madness escalate dramatically over time in the new tournament contract.
"Those revenues should be used by institutions to directly support the education and medical care of college athletes—not for coaching salaries, recruiting, and building more athletics facilities," said Duncan.
In addition, the Knight Commission heard presentations from experts and former athletes on several issues "that the members regard as paramount for the NCAA and member institutions in the administration of intercollege athletics going forward."
• Actions being taking by the NCAA to reduce athletic time demands, a which the Commission said was a "priority." Proposed changes included requiring mandatory no-activity periods at the end of competitive seasons, post-travel rest periods from athletically-related activities, and requiring two days off per week out-of-season.
• The Commission said it supports changing NCAA rules to pause the current "athletics eligibility clock" for any student who takes time away from athletics for a study abroad or internship experience.
• Sports medicine professionals discussed recent changes implemented by institutions and conferences to improve medical care and address ongoing health and safety challenges. Former football players Kevin Glover, J.C. Watts and Marcus Lattimore called for increased attention to and post-enrollment coverage of medical conditions and injuries that resulted from participation in college sports.
The Commission said it "promotes reforms that support and strengthen the educational mission of college sports. Over the years, the NCAA has adopted a number of the Commission's recommendations, including the rule that requires teams to be on track to graduate more than 50 percent of their players to be eligible for post-season competition."
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