The NCAA makes a ton of money off of television deals and sponsorships. But the thing is, the NCAA also spends a lot of money on its over 400,000 student athletes, their programs, and their games.
How much money did the NCAA spend exactly in 2016? A cool $1.4 billion. That $1.4 billion is also an eye-opening $500 million *more* than they spent in 2015, according to USA Today.
The thing is, the additional $500 million didn’t come out of nowhere. Instead, that large chunk of money was due to the NCAA “allocating more than a decade’s worth of accumulated money to legal settlements and costs and a special one-time distribution to Division I schools.”
While the additional $500 million is still an incredible amount of money to spend compared to 2015, the reasoning behind it makes sense. It also was bad news for the NCAA, which brought in a record $996 million in revenue 2016. With the additional $500 million they had to spend, that meant the NCAA took a $404 million year-end net asset loss leaving their net assets at $294 million, the lowest year-end total for the NCAA since 2006.
“(The NCAA’s ability to absorb these costs) is the result of the Board of Governors’ thoughtful stewardship. The increase in expenditures provides programs and services that will benefit current and former student-athletes,” NCAA Chief Financial Officer Kathleen McNeely said in a statement.
In terms of revenue, the $996 million brought in by the NCAA was $84 million more than what they took in the year before in 2015. But in 2015, the NCAA’s revenue also took a $76 million hit, meaning that compared to 2014, the $996 million brought in this past year is only an $8 million increase.
Two of the bigger expenses the NCAA had to deal with this past year (that it hadn’t previously dealt with) were $32 million in legal expenses and $200 million in supplemental distribution to Division I schools.
The $32 million in legal fees was $7 million more than the NCAA spent in 2015. The $200 million in supplemental distribution for DI schools is meant to support student athletes and was “funded by money from a type of endowment that had been intended to give the association a substantial cushion in case of a catastrophic loss of revenue from its main funding source.”
One final major expense the NCAA had to deal with was an odd, but prominent, one: the Ed O’Bannon antitrust case. The O’Bannon case dealt with the NCAA using athlete’s images for commercial purposes. The NCAA had to pay more than $42.3 million in attorney fees and costs to lawyers according to USA Today.
At the end of the day, the NCAA can afford all of this and will be just fine. After all, nearly a year ago in April of 2016, the NCAA signed a new $8.8 billion dollar TV deal with CBS and Turner for March Madness rights through 2032.
