Early NCAA Exits Will Cost ACC Millions
By David Glenn, ACCSports.com
The failure of the Atlantic Coast Conference to advance a team past the Sweet 16 of the NCAA Tournament this season made big headlines across the nation. "We've made our name, in part, with our postseason success," said John Swofford, ACC commissioner. "When the tournament gets to the second and third (Final Four) weekends, we have a pretty good track record for being participants rather than observers."
Most ACC-related media reports in March and April focused on the rarity of the league's collapse. Indeed, the conference had put at least one team past the Sweet 16 in 25 of the previous 26 years, and it had averaged one Final Four participant per year over the same period. The ACC had three of the last five national champions -- Duke in 2001, Maryland in 2002, North Carolina in 2005 -- as well as six of the last 15, and eight of the last 24.
The story the mainstream media missed may have hurt the ACC even more. Over time, each of the early exits by the league's four NCAA participants (Duke, Boston College, UNC, N.C. State) will cost it about $1 million in unrealized revenue. An additional win by each team would have been worth $4 million. Two more games each? That's $8 million.
If you think the disappointing NCAA Tournament performance of your favorite ACC basketball team left you with an emotional hangover, consider this: By missing out on millions in potential revenue, the ACC will be paying -- literally -- for its early exits in 2006 all the way through 2012.
"I always pull for the ACC schools (in the NCAA Tournament), even if we're not there," said Maryland athletic director Debbie Yow. "The primary reason is to elevate the conference, to maintain that status as the best men's basketball conference in the country. That has many benefits. The money is a secondary consideration, but certainly we're all aware of it."
Under the revenue distribution system adopted by the NCAA in the early 1990s, about 40 percent of the postseason payouts to individual schools and conferences is determined by the performance of that school/conference in the NCAA Tournament over the most recent six-year period.
For example, the check (worth $13 million-plus) that the ACC received from the NCAA this year reflected the league's performance in the NCAA Tournament from 2000-05. The 2007 check will be based on the number of "money units" accumulated from 2001-06. The 2012 check will reflect the results from 2006-11.
Each conference -- or, in the case of independents, each school -- earns one "money unit" for every game played in a given year's tournament. Exception: No units are credited for playing in the title game.
This year, with a disappointing four NCAA bids and just six victories, the ACC earned only 10 "money units." That stands in contrast to the league's performance in 2004, when six NCAA participants earned 19 money units. The ACC's average performance over the last 10 seasons is about 13 units, the highest number in the nation.
The move to the revolving, six-year revenue distribution formula was designed in part to lessen the impact of individual games. Because of image and gambling-related concerns, NCAA administrators did not want to read articles about how a missed free throw in the final seconds cost a particular conference or school truckloads of cash.
In reality, though, the dreaded "million-dollar free throw" concept remains alive and well. Last year, a single money unit was worth $152,037. This year, the number was about $164,000. Assuming more small increases in future years, and remembering that each of this year's "units" will remain in the distribution formula through 2012, the "million-dollar free throw" label appears to be a perfect fit.
Keep in mind that all NCAA Tournament money issues revolve around the NCAA's landmark 11-year, $6 billion contract with CBS. (Yes, that's "billion," with a "b.") That deal runs through 2013, when CBS is scheduled to pay $764 million to televise the event. This year's fee was $453 million.
In addition to the winning-based formula above, the NCAA keeps much of the NCAA Tournament revenue to sustain itself, and this year it will distribute about $165 million in other cash to member schools according to other (unrelated to winning) formulas.
Here's a rough breakdown of the latter category: $122 million based on the size (based on numbers of varsity sports, athletic scholarships) of each member school's sports program, $24.5 million for the Student-Athlete Opportunity Fund (which provides need-based financial assistance in personal emergencies and other situations) and $19 million (about $58,000 per school) for academic support programs.
Issue 1.3: May 11, 2006