Knight Commission: Divvy Up March Madness Millions Fairly

Updated May 11, 2016

The perennial issue of how to equitably allocate and distribute the large sums of money generated by intercollegiate sports again took center stage Tuesday at a meeting of the Knight Commission on Intercollegiate Athletics at the National Press Club in Washington, D.C. As has been the case for decades, opinions and proposals ran the gamut.

At this meeting, the commission called on the NCAA to revamp the formula by which March Madness revenue is distributed to institutions. Currently, only 25 percent of the more than $540 million generated during March Madness is restricted for the benefit of athletes. Such funds can be used, for instance, for scholarships after players’ eligibility is up, athletes’ healthcare costs, and other programs benefitting the college athlete, in particular. The Knight Commission wants the current formula changed so all March Madness revenues are restricted for the benefit of student athletes.

Additionally, the Knight Commission reiterated its call for changing the incentives in the NCAA’s revenue distribution plan to reward academic outcomes and not just athletic outcomes. Currently, according to a Knight Commission release, nearly 40 percent of the more than $540 million in NCAA revenues annually distributed to Division I institutions is based on the appearances and success of teams in the men’s basketball tournament. The release noted that the proposal to change this revenue distribution plan has gained new momentum from a preliminary report issued last week by a special NCAA Values-Based Revenue Distribution Working Group.

New Knight Commission co-vice chair and former U.S. Secretary of Education Arne Duncan said in a statement, “It is not only important that the NCAA set a clear and high bar as a matter of principle for use of the revenues it distributes but that it act as soon as possible to do so, especially as NCAA revenues from March Madness escalate dramatically over time in the new tournament contract. Those revenues should be used by institutions to directly support the education and medical care of college athletes — not for coaching salaries, recruiting, and building more athletics facilities.”

When asked whether the Knight Commission is prepared to recommend that some of the revenues be dedicated to helping poor secondary schools that many of these athletes come from, Duncan said that such a proposal is beyond the scope of what the commission is addressing at the present. Duncan did, however, stress that there is nothing that would prevent the NCAA form moving to aid high schools. “They already do some good outreach programs but they could do a whole lot more,” he said.

Knight Commission Chair William E. “Brit” Kirwan said in a statement that restricting all NCAA revenues for the benefit of athletes “is important to the financial integrity of college sports. We will be exploring the potential application of this principle, in whole or in part, to the use of other shared athletics revenues.” The release notes that the commission has called for a portion of revenues from the $500 million College Football Playoff be used to support concussion research and other health and safety issues for athletes.

Knight Commission member Leonard Elmore, a former University of Maryland basketball standout and attorney, says that athletes should be more careful about what school they choose, weighing what institution will put them in the best position to earn a marketable degree.

“These are very bright young people,” Elmore says. “There is a difference between making and knowingly making a mistake and these kids know the difference and we need to be held accountable,” Elmore says.

Another idea floated at the meeting centered on the notion that institutions receive the revenue as opposed to the individual student athlete. Even the notion of conference-wide pooling and redistribution of revenues was offered. Knight Commission member and former NFL Commissioner Paul Tagliabue observed that such a conference-wide system would be fraught with legal hurdles, including antitrust challenges. He made a comparison with salary cap regulations at the professional level.

“An issue surfaced as to whether a donation to the United Negro College Fund was a violation of the salary cap rules,” Tagliabue said. “These are tough decisions.”

The Knight Commission was formed by the John S. and James L. Knight Foundation in October 1989 in response to highly-visible scandals in college sports. The Commission promotes reforms that support and strengthen the educational mission of college sports. For more information, visit www.knightcommission.org.