II. Rewarding Practices that Make Academic Values a Priority

A. Strengthened eligibility standards for participation in championships

We repeat the Commission’s 2001 recommendation that a team should be on track to graduate at least 50 percent of its players to be eligible for postseason championships. While we support the NCAA’s effort to improve its academic accountability measures, the Commission believes that current standards remain too low and that it takes far too long—typically several years—for postseason bans based on poor academic results to be enforced. The Commission now recommends that eligibility for championships be determined at the start of each new academic year and conditioned upon teams achieving an Academic Progress Rate (APR) that predicts at least a 50 percent graduation rate under the NCAA’s graduation measure. (The APR was adopted by the NCAA in 2004 to track academic success and retention semester to semester. An APR of 925 predicts a graduation rate of approximately 50 percent.)

Such a standard would have a significant impact on revenue distribution because successful men's basketball tournament teams can earn financial rewards even when their academic records are dismal. For example, teams that failed to meet the Commission's recommended standard for tournament eligibility, as described above, during one or more of the past five tournaments (2006 to 2010) will earn their conferences at least $54 million next year under current revenue distribution policies. If the Commission's recommendation is adopted, these tournament slots, and the financial rewards that accompany them, will be reserved for teams that meet legitimate academic standards.

If the Commission’s recommendation is adopted, these tournament slots, and the financial rewards that accompany them, will be reserved for teams that meet legitimate academic standards.

B. Distributing revenues according to educational values and priorities

Beyond the need to make tournament eligibility contingent on reaching core academic benchmarks, the Commission believes that the detailed formulas by which shared revenues are distributed must also be more closely aligned with academic values. In addition to the shared revenues that all NCAA Division I member institutions receive, primarily through the NCAA’s media contract for the postseason basketball tournament, the 120 institutions in the Football Bowl Subdivision (FBS) also receive distributions from their conferences’ postseason football bowl media contracts. These include the lucrative Bowl Championship Series (BCS) contract, whose financial proceeds flow primarily to six major conferences.

We recommend that these financial rewards no longer be based so heavily on winning, but instead on maintaining the right balance between athletics and academics.

To preserve the integrity of the revenue distribution system, the NCAA and athletic conferences should change their allocation formulas as follows:

  1. Change revenue distribution formulas to prioritize educational values over winning.

    • (a) Reduce the funding provided for winning and link new funding to academic success. The current NCAA revenue distribution formula rewards men’s basketball teams on the basis of appearances and wins in the NCAA men’s basketball postseason tournaments. The allocation  vehicle for these revenues, known as the Men’s Basketball Fund, distributed $167 million in 2010.

      The Commission recommends that the allocation to this fund be substantially reduced. Specifically, the current percentage of shared revenues provided in the Fund for tournament success should be cut at least by half (from 40 percent to 20 percent) and savings should be reallocated to the new Academic-Athletics Balance Fund described below. This revision would ensure that at least 80 percent of the shared revenues will be allocated based on educational values rather than on wins.

    • (b) Reallocate some postseason football revenues on the basis of academic values. Currently, revenues for FBS postseason football activities and media contracts are controlled by the participating conferences, not the NCAA. Consistent with the principles in this report, we believe a portion of the revenues from these activities and contracts should be allocated to restoring an appropriate balance between investments in athletics and academics. Thus, as a starting point, we recommend that at least 20 percent of the overall funds available for annual conference distributions from the BCS be allocated equitably to each FBS conference and designated as the Academic-Athletics Balance Fund. The conferences then would take this allocation and distribute the funds to its members according to the criteria specified for the Academic-Athletics Balance Fund discussed below.

  2. Academic-Athletics Balance Fund. The Commission recommends that the NCAA and individual FBS conferences establish a new stream of revenue allocation through the actions described in 1(a) and (b) above. All Division I institutions would be eligible for this revenue if they met the following two conditions:

    • (a) All teams must maintain an average APR that predicts at least a 50 percent graduation rate as measured by the NCAA’s own graduation rate metric; and

    • (b) Each institution must demonstrate an appropriate balance between institutional investments in athletics and education. The Commission recommends that the NCAA Board of Directors develop criteria to monitor this balance, drawing upon the metrics recommended in this report. For example, one requirement might be that the growth rate in the athletics budget measured on a per-athlete basis over a five-year period must not exceed the growth rate in educational spending on a per-student basis over the same period.

Note: The NCAA’s Academic-Athletics Balance Fund would be distributed to all Division I members. The allocation to conferences from BCS funding would be distributed only to FBS members (or directly from BCS administration if they are not affiliated with a conference).


Knight Commission member Sarah Lowe on the purpose of college sports

Knight Commission member Len Elmore on putting college athletics into perspective

Knight Commission Co-Chairman William E. “Brit” Kirwan on financial reform