How Revenue is Spent at the National Collegiate Athletic Association (NCAA)

The National Collegiate Athletic Association (NCAA) is the most well known non-profit, tax-exempt organization focused on college sports in the US. With 1,100 member colleges and universities  in 102 athletic conferences across the country that participate in 90 championships in 24 sports in 3 divisions, the NCAA is a powerful and well financed organization.

The NCAA raises about $1 billion annually ($1.1 billion in 2017; $1 billion in 2016) and it may surprise you to learn the number one source of revenue for this 501 (c) (3) is television rights fees (about 77% of revenue) followed by championships and the National Invitation Tournament (about 12% of revenue) and investment gains and income (10% of revenue).

With $400 million in net assets, the NCAA has a significant cushion but what people really want to know is what the NCAA does with the $1 billion in revenue the organization receives annually.  The short answer is they spend about half on scholarships/grants, about 13% of championships, and about 20% on compensation and organization support expenses. They also save: in 2017, the NCAA did not spend about $120 in revenue (or about 12% of revenue). These funds went to the general fund.

in 2017, the NCAA raised $1.1 billion. Expenses totaled nearly $1 billion, leaving about $120 million to be added to the fund balance.

Expenses ($942 million) were categorized as follows:

• $586 million (55% of revenue):  Grants
• $134 million (13% of revenue):  Div I, II, and III Championships
• $ 70 million (6% of revenue):  Compensation
• $ 57 million (5% of revenue):  Fees for Services
• $ 22 million (2% of revenue):  Travel and Conferences
• $ 21 million (2% of revenue):  Insurance
• $ 17 million (2% of revenue):  Advertising and Promotion
• $ 15 million (1% of revenue):  Office-Related Expenses
• $ 12 million (1% of revenue):  Other
• $  8 million (1% of revenue):  Sport Sci/Drug/Med

As illustrated above, the largest expense is grants (scholarships/grants) at $586 million or 55% of revenue. The NCAA made 858 grants greater than $5,000, of which 851 were to other non-profit, tax-exempt organizations. The largest grants were awarded to:

• $58.3 million:  Big Ten Conference of Park Ridge, IL
• $50.8 million:  Atlantic Coast Conference of Greensboro,NC
• $38.9 million:  Southeastern Conference of Birmingham, AL
• $27.5 million:  American Athletic Conference of Providence, RI
• $24.9 million:  Big 12 Conference of Irving, TX
• $23.4 million:  PAC-12 Conference of San Francisco, CA
• $16.5 million:  Atlantic 10 Conference of Newport News, VA
• $12.6 million:  Mountain West Conference of Colorado Springs, CO
• $10.6 million:  Big East Conference of New York, NY
• $10.4 million:  Southland Conference of Frisco, TX
• $ 9.3 million:  Missouri Valley Conference of St. Louis, MO
• $ 8.9 million:  West Coast Conference of San Bruno, CA
• $ 8.8 million:  Conference USA of Hattiesburg, MS
• $ 8.1 million:  Mid-American Conference of Cleveland, OH
• $ 8.1 million:  Summit League of Elmhurst, TX
• $ 8.0 million:  Colonial Athletic Association of Richmond, VA

Using the above information, every $100 in revenue was spent as follows:

 $100:  Revenue

-$ 55:  Grants

-$ 13:  Division I, II, and III Championships

-$ 68:  Subtotal Grants and Championships

 $ 32:  Revenue Remaining

-$  6:  Compensation

-$  5:  Fees for Services

-$  2:  Travel and Conferences

-$  2:  Insurance

-$  2:  Advertising and Promotion

-$  1:  Office-Related Expenses

-$  1:  Other Expenses

-$  1:  Sports Sci/Drug/Med 

-$ 20: Subtotal: Compensation, Fees, Travel, Insurance, Advertising, Other, Sports Sci/Drug/Med 

-$ 88:  Total Expenses

 $ 12:  Excess Revenue over Expenses:  To Fund Balance

As illustrated above, about $55 out of every $100 went to scholarships/grants while $13 went to championship expenses. About $20 out of every $100 in revenue was used for compensation and organization support expenses.

To read the IRS Form 990 (2016 for the year ending August 31, 2017), click here.