NCAA blew through rainy day fund intended for disaster like pandemic: Reports

  • The NCAA spent approximately $400 million that was previously set aside in the event of a canceled March Madness basketball tournament.
  • The funds were spent on a lawsuit settlement and scholarship expansion.

The NCAA March Madness basketball tournament was canceled earlier this year because of the coronavirus, which cost schools $375 million and the NCAA more than $800 million in missed revenues. 

In 2004, the college athletics organization started preparing for a canceled tournament by building up a fund of about $500 million to protect itself and colleges from potential revenue losses. But over the last few years, the organization spent it.

“They made a decision to be exposed...This didn’t have to happen.”   

According to reporting by USA Today and the Washington Post, by 2017, the NCAA had spent approximately 80 percent of the fund. The outlets reported that in 2015, new officials began spending over $400 million and did not increase insurance coverage for a lost tournament. 

“It was a managerial error,” one former NCAA employee told The Washington Post. “They made a decision to be exposed. … This didn’t have to happen.”

Half of the $400 million was reportedly given to schools in 2016 after changes in scholarships allowed for colleges and universities to include attendance costs in scholarship amounts. The other half was spent on a settlement for a class-action lawsuit. The NCAA paid the full settlement, despite being only one of twelve co-defendants. 

[RELATED: NCAA answers coronavirus complications with favor for D1 springtime athletes]

Former NCAA employees said the organization spent the money because college sports officials like Notre Dame Athletic Director Jack Swarbrick argued that the cash reserve would invite lawsuits. 

Jeffrey Kessler, who was a lead attorney on an antitrust lawsuit against the NCAA, called the reasoning “absurd.” 

“The word ‘absurd’ seems entirely appropriate,” Kessler said. “This just sounds like frankly another NCAA fabrication to justify an action that didn’t make any sense and now exposes them in the face of this pandemic.”

[RELATED: NCAA cancels March Madness amid coronavirus fears]

The NCAA appeared to shift the blame to university presidents. 

In a phone interview with The Washington Post, the organization’s chief operating officer, Donald Remy, said the decision to spend money from the savings fund was made by university presidents and not by NCAA executives. 

“To suggest that the management made an error, I think, misunderstands our structure,” Remy said. “It was a pretty prudent amount of insurance for an event that was likely never going to occur. … Clearly we got a pandemic, and it did occur.”

Follow the author of this article on Facebook: @eduneret and Twitter: @eduneret



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Eduardo Neret
Eduardo Neret | Digital Reporter

Eduardo Neret is a digital reporter for Campus Reform. Prior to taking on his current position, Eduardo served as the Senior Florida Correspondent for Campus Reform and founded a conservative web publication where he hosted a series of interviews with notable conservative commentators and public figures. Eduardo’s work has appeared on the Fox News Channel, FoxNews.com, The Washington Examiner, Daily Caller, The Drudge Report, The Blaze, and The Daily Wire. He most recently served as a contributor to the Red Alert Politics section of The Washington Examiner. In addition to his independent journalism, Neret also previously worked at the Department of Justice and the Fox News Channel. He has appeared on numerous radio programs and NewsMaxTV to discuss his work and comment on relevant political issues.

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