In a significant financial turnover, the NCAA has reported a remarkable surge in revenue that reached an unprecedented $1.38 billion for fiscal year 2024, as revealed in its latest audited financial statement. However, this record revenue hike comes shadowed by a staggering tenfold increase in its liabilities, signaling a tumultuous shift in the organization’s financial landscape. This report, obtained by Sportico, sheds light on the potential implications of the proposed House v. NCAA antitrust settlement, mapping out how it might influence the NCAA’s overall financial health.
When factoring in the proposed $2.78 billion settlement into its fiscal year 2024 accounts, the NCAA’s liabilities surged from $304 million at the end of fiscal year 2023 to a staggering $3.06 billion. The organization has committed to disbursing these back damages to former athletes over a span of the next decade. This means that, while they’re raking in record revenue, a significant portion of that will be tied up in addressing these legal obligations.
As the organization braces for a court hearing set for April, presided over by U.S. District Court Judge Claudia Wilken, stakeholders are keenly watching. Various objectors are preparing to voice their concerns about the settlement’s approval. Judge Wilken’s final decision is anticipated in the months following the hearing, with expectations that the settlement will receive the nod before the close of August.
The ripple effect of this impending settlement is already visible in the NCAA’s balance sheet. The association’s net assets plummeted from $565 million in fiscal 2023 to minus $1.97 billion for fiscal 2024, a staggering drop that reflects the financial strain the organization is anticipating. Included in those figures is $40 million set aside from lingering liabilities arising from a class-action concussion litigation settled back in August 2020.
Despite these alarming numbers, the NCAA holds $1.03 billion in financial assets that can be accessed in the short term. This figure, which seems impressive, includes $265.8 million in cash, $55.6 million in accounts receivable, and $705.9 million invested in easily liquidated assets. This marks an increase from $815.3 million in fiscal 2023, signaling that the NCAA still retains some financial flexibility even amid mounting liabilities.
NCAA CFO Mario Morris expressed optimism about the future, highlighting that the organization achieved an overall revenue increase of $91 million this past fiscal year. He emphasized that this growth allows the NCAA to maintain responsible fiscal operations while continuing to enhance the experience and benefits offered to student-athletes. Morris noted a goal of achieving a debt-free status by 2025, asserting that prioritizing revenue generation while simultaneously working to cut costs is imperative for maneuvering through future challenges.
The $1.38 billion revenue figure represents a 7% increase from last year’s total of $1.29 billion. This revenue spike is fueled largely by a remarkable $60 million jump in investment gains, which has doubled from the previous year, alongside increases in earnings linked to media partnerships and championship operations, such as the highly anticipated March Madness basketball tournaments. Notably, despite the looming House v. NCAA settlement, overall expenses have remained relatively stable throughout this financial period.
Media partnerships, especially with Turner and CBS—accounting for a whopping $873 million in fiscal 2024—remain the NCAA’s predominant source of revenue. The fiscal year also marked the conclusion of the prior ESPN deal, which had previously encompassed the NIT and a variety of championships outside of men’s basketball. Looking ahead, the NCAA will kick off a new eight-year agreement worth $920 million beginning in fiscal year 2025, setting the stage for hopefully even more lucrative years.
As the NCAA approaches the final payoff of a tax-exempt bond issued back in June 2012, with $1.65 million remaining, its leadership has made it clear that there are no plans to incur additional debt in the near future. Last fall, they made strides to solidify a debt-free future by announcing a decision to have S&P Global retract its recent AA bond credit rating, reaffirming a vision to operate without debt.
In the wake of the COVID-19 pandemic, the NCAA has established a series of self-insurance programs to navigate risk effectively and safeguard against potential financial setbacks stemming from tournament cancellations. These efforts have culminated in the formation of two key insurance entities—Collegiate Core LLC and Student-Athlete Insurance Cell LLC—that began 2024 with a joint reserve of $79.8 million, facing claims totaling $38.5 million and payouts of $8.3 million, ultimately ending the year with $110 million. The total captive insurance reserves now soar to $175 million, indicating a proactive approach to risk management.
Nevertheless, the NCAA faces an array of challenges as it grapples with pressure to overhaul its operational model, which has historically resisted compensating athletes fairly. Currently, the organization is advocating for a Congressional antitrust exemption while safeguarding attempts to classify athletes as employees, all while shifting power dynamics towards its wealthiest members, particularly from the SEC and Big Ten conferences.
The NCAA plans to file its annual tax return sometime between May and June, which will disclose additional details not found in the audited financial statement. This will include insight into employee salaries, legal and lobbying expenditures, and payouts to independent contractors with the highest compensation.
The path ahead for the NCAA promises to be rocky as it navigates through mounting financial responsibilities and ongoing scrutiny concerning its treatment of student-athletes. Among many challenges, it must find a way to balance revenue generation and reform during a pivotal moment in its history, shaping the future of collegiate athletics for years to come.
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