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Events and Attractions

Exact Financial Losses Not Yet Clear For Canceled NCAA Tournament

The NCAA's contract with CBS and Turner to broadcast March Madness pays about $800M per yearGETTY IMAGES

The loss of the NCAA Tournament will "create some unexpected red ink on the NCAA’s balance sheet this year," but exactly how much is "to be determined," according to Ralph Russo of the AP. The NCAA’s contract with CBS and Turner "pays about $800 million per year." Bevilacqua Helfant Ventures co-Founder Chris Bevilacqua said that it is "standard for media rights contracts to have language that relieves rights holders from financial obligations if games are canceled due to events outside the control of the property." NCAA President Mark Emmert has said that the NCAA has "business disruption insurance to cover some of its losses." Bevilacqua said that the long-running partnership between the NCAA and CBS, which has aired the tournament every year since '82, and Turner, could "help the two sides find a resolution to any outstanding money matters." Russo noted sponsorship deals that companies have with CBS and Turner to run ads during games are "typically structured similarly to the rights fees." If the spots "don’t run, the sponsors don’t have to pay." Typically, the money "flows from sponsors to the networks to the NCAA to the schools." Former NCAA Senior VP Greg Shaheen said, “Every one of those steps has to be worked through to determine what is going to happen here. And that has to happen in conjunction with the insurance conversation” (AP, 3/17).

FINANCIAL FALLOUT: USA TODAY's Berkowitz & Wolken note major ADs are "planning on the NCAA not being able to cover all of the revenue it will lose because of the cancellation" of the tournament. Anonymous ADs said that is "likely to result in a reduction of the association’s scheduled distribution" of $600M to D-I schools and conferences this spring. How much of a reduction is "still to be determined, and that will depend on the association’s ability to tap its reserves and borrow money." The ADs and other college administrators have been told that the NCAA has $250-275M in "business-interruption insurance connected to the tournament" (USA TODAY, 3/18).

DEMANDING ANSWERS: In Indianapolis, Gregg Doyel writes people are "mad, and they want more answers than they’ve been getting from Emmert about the decision to cancel one of the best events on the annual sports calendar -- without postponing it first." There are more than 350 schools in D-I, more than 30 conference tournaments, and this "saga was moving too fast." March Madness is the "biggest, most beautiful thing, but in this case it was the Titanic and there was no way to avoid that iceberg." Doyel: "And no way to crash gracefully." Emmert said, "Nobody wants to conduct the tournament more than we do. The decision to cancel the tournament was one of the hardest decisions I and the Board of Governors have ever made. We would have loved to postpone it. We looked at postponing it, and also looked at whether we could move it up, shorten the tournament to a Sweet 16 to accelerate and get in front of the spread of the coronavirus, but we wound up having to conclude we couldn’t do either one." He added, "For those who say we do everything for money, this is the most painful thing we’ve ever done financially. We will lose a significant portion of our revenue. We’re working our way through that right now, as you might expect … but there’s no way to go through this year and into next year without a very significant financial interruption" (INDIANAPOLIS STAR, 3/18).

LACKING LEADERSHIP? ESPN's Paul Finebaum said it was "inexcusable" for Emmert and the NCAA to "not have more consultation" for ADs in the midst of canceling conference tournaments last week. Finebaum noted Emmert drew praise Wednesday for deciding to play games without fans, but there was "no consultation with anyone." Finebaum: "Mark Emmert is just an arrogant, egomaniacal leader who needs to be replaced immediately for the way he handled that last week. ... To allow Mark Emmert to go on another day as the leader of this organization to me is unexplainable" ("The Roundtable," ESPN, 3/16).

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