Here as discussion of the financial impact and other effects

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Posted by mh on March 13, 2020 at 09:28:08

Will 2019-20 NCAA champions be crowned in college basketball and other sports whose championships were canceled?
The NCAA hasn't provided a definitive answer on this, but it's difficult to envision anything beside a simple "no." College football crowned a champion based on polls for a number of years, so Kansas and South Carolina would win titles in men's and women's basketball if the NCAA decided to do it that way -- but that seems unlikely. In all likelihood, there's going to be a blank line in the college sports annals next to 2019-20.


What will this mean for future player eligibility for affected players in college basketball and other winter sports that had yet to complete their championships? What about spring sports that had begun their regular seasons?

Both SEC commissioner Greg Sankey and Big 12 commissioner Bob Bowlsby told ESPN they weren't sure yet how the cancellations will affect student-athletes' eligibility. It's a question that will certainly be tackled eventually, but was part of a long list of other repercussions that must be dealt with.

Auriemma interested in giving seniors an extra year of eligibilityUConn women's basketball coach Geno Auriemma offers support for offering the seniors of spring sports an extra year of eligibility.
What will the revenue impact of cancellations be on NCAA member schools and conferences?

The NCAA tournament uses a "units" system to reward conferences based on the number of the teams from a particular league that qualify for its postseason tournament and advance. Last year, eight Big Ten teams qualified for the men's NCAA tournament and Michigan State made a run to the Final Four.

After winning 13 games, the Big Ten earned 21 units, which warranted a $35 million payout. Overall, the Big Ten reportedly distributed $759 million to its member schools last year. The Big Ten and other Power 5 leagues won't take a substantial hit, if the cancellations mean the schools and leagues don't get paid under these unique circumstances, but the non-Power 5 schools could be dramatically affected by this.

Think about a league like the Missouri Valley Conference. In 2018, Loyola Chicago made $8.45 million (paid out over a six-year stretch) for its league (the units stop once a team reaches the Final Four). That's an average of $845,000 overall for each of the 10 schools in the Missouri Valley Conference. Take a school such as Illinois State. That $845,000 represents about 10% of Illinois State's $9 million budget for men's athletics, per Department of Education data. That money can change these programs.

What these non-Power 5 schools miss with this year's cancellation is the potential to make hundreds of thousands of dollars in additional revenue for their respective budgets if one of their member schools gets hot in March. They don't have Power 5 TV revenue streams. They don't have major sponsorship deals. It's more significant for those schools and their leagues than for the major programs in the field.

We might be having a different conversation if this had unfolded during the college football season. The money that member schools and leagues make off the NCAA tournament is dwarfed by the TV revenue obtained during the college football and college basketball regular seasons for those same conferences.


Will the cancellations have an impact on CBS and Turner's multibillion-dollar TV contract for the men's basketball tournament?

In 2016, CBS and Turner Sports agreed to an eight-year, $8.8 billion extension for the rights to air the NCAA tournament. That extension trumped the initial, 14-year, $10.8 billion deal the two sides agreed to in 2010 and expanded the annual rights contract for the NCAA tournament to an average of more than $1 billion per year, beginning in 2025. Why does this matter? The bulk of the NCAA's annual revenue comes from this deal. "Television and marketing rights fees, primarily from the Division I men's basketball championship, generate the majority of our revenue," according to the NCAA's website. So the NCAA essentially gets its money up front, while CBS and Turner are charged with attracting the advertising dollars attached to the NCAA tournament. But that's in a typical year. And this year is anything but typical.

Per the NCAA website, a part of the extended deal, which commences in 2025 and ends in 2032, demands an annual $66 million "pre-term" payment to be held in escrow, which also includes a $9 million advance to the NCAA.

"As the Pre-Term Payments represent an advance on future contract years and are refundable to CBS and Turner should certain events occur, the Pre-Term Payments will be recognized as revenue in years 2025 through 2032 when no longer considered refundable in accordance with the terms of the contract," according to an external audit of the NCAA's finances which is posted on its website.

Does the cancellation qualify as "should certain events occur" and how does that affect the current deal and the $66 million lump sum? What about the rest of the cash? The same audit also states that the terms of the agreement with the NCAA are "guaranteed" by Time Warner Inc., the parent company of CBS and Turner.

More than 19 million people tuned in to CBS to watch last year's Virginia-Texas Tech national title game.

"There are very few premium sports properties that are available that can deliver for advertisers and for consumers," said David Levy, former president of Turner, after the extension was announced.

The cancellation of the NCAA tournament would seem to disrupt that revenue stream for CBS and Turner in 2020, although it's unclear what safeguards the deal might contain. CBS and Turner did release a statement, however, backing the NCAA's decision to cancel its postseason tournament:

"We are fully supportive of the NCAA's decision to cancel this year's NCAA Division I Men's Basketball Championship. We'll continue to work closely with the NCAA and all of our partners as we prioritize the health and well-being of everyone involved."

ESPN, which has rights to the NCAA women's tournament along with the majority of the other NCAA championships that were affected, addressed the cancellations: "This is an unprecedented situation," the network said in a statement. "We have great relationships with our league partners and are confident we can address all issues constructively going forward. Our immediate focus is on everyone's safety and well-being."


Will coaches who had NCAA tournament incentives in contracts see those provisions honored?

As one industry source privy to these discussions said, "There are going to be issues." For the conferences that already finished their league tournaments, the automatic-bid recipient should be eligible for the bonus. But it could ultimately be up to each individual school to honor bonuses and extensions that get triggered.

Now, what does that mean for coaches who expected to get one and then didn't due to the cancellation of the tournament? One source said there are absolutely going to be contract disputes over this issue -- and it could eventually lead to coaches leaving their current jobs a little earlier than expected.

"There are going to be difficult conversations," one industry source said.

"A lot of money was lost," another said.


How do the cancellations of the basketball tournaments and most spring sports impact coaching employment decisions?

It's too soon to tell, but the men's basketball coaching carousel should be much lighter than normal. Unless there's an obvious need for a dismissal, athletic directors and university boards likely will be cautious about making changes after such an abrupt and unusual end to the season. Also, they have many more things to worry about with their entire athletic programs essentially shut down for the spring.

"Has to be slower than expected," a coaching agent said. "Really bad look [to make a move now]. There could be a late cycle once things calm on the virus front."

So far, no power conference programs have made changes. Eleven schools have fired their coaches and two -- Evansville (Todd Lickliter) and Idaho (Zac Claus) -- already have hired replacements. What does Texas do with Shaka Smart? Texas had been seen as the trigger school for the 2020 coaching cycle, but few would be shocked if athletic director Chris Del Conte tables this decision for another year.

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