How Certain NCAA Division I Rules Embedded in Economics Are Starting To Bend Due to COVID-19
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How Certain NCAA Division I Rules Embedded in Economics Are Starting To Bend Due to COVID-19
With financial flexibility in mind, the Division I Council Coordination Committee and other Division I governance groups continue providing waivers for Division I membership.
The anticipation of diminished attendance (if there is any at all) at FBS football games in 2020-21 and athletics department austerity tied to future athletic scholarship spending are central to recent legislative relief.
Volunteer coaches, a niche group under NCAA Rules that normally cannot receive direct financial resources and benefits from Division I member institutions, benefit from the recent waiver.
Student-athletes with expenses tied to canceled summer 2020 foreign tours and student-athletes’ scholarships during leave of absence for Olympic training are also targets for flexibility.
The Division I Council’s Coordination Committee -- or more informally known in college athletics circles as “3C” -- has been busy the past few months fielding a variety of Division I membership requests for exceptions and waivers. Some of the waivers and relief being granted have a prominent financial element.
In May, the 3C approved a two-year waiver of Division I Bylaw 20.9.9.3. This rule normally requires attendance at Division I Football Bowl Subdivision (FBS) home football games to average at least 15,000 in actual or paid attendance. The two-year waiver allows for no minimum attendance requirements for FBS institutions.
The rule, as normally applied, specifically requires that once every two years on a rolling basis, the institution shall average at least 15,000 in actual or paid attendance for all home football games.
For purposes of computing actual attendance figures, an individual may be counted if any one of the following conditions applies:
Attendees are issued tickets that are collected on admission to the game and retained;
Attendees enter through and are counted by a turnstile that is monitored by a representative of the department of athletics who verifies in writing the accuracy of the count on a per-game basis; or
Attendees enter through a gate at which a representative of the department of athletics counts them individually with a manual counter, and the representative provides a written statement verifying the accuracy of the count on a per-game basis.
For purposes of computing paid attendance figures, tickets must be sold for at least one-third of the highest regular established ticket price as set prior to the season, regardless of whether they are used for admission. Tickets sold at less than one-third of the highest regular established price may be counted as paid attendance only if they are used for admission. Student attendance may be counted as paid attendance if the student pays at least one-third of the highest regular established ticket price or if the student actually attends the game and any one of the following conditions applies:
The student paid an athletics fee;
The student paid an institutional fee of which a certain portion was allocated to the department of intercollegiate athletics; or
The student paid no athletics fee, but the institution allocated to the department of intercollegiate athletics a certain portion of tuition income or general operating funds as the equivalent of a student athletics fee.
Student attendance must be verified through one of the following methods:
Such students are issued tickets that are collected on admission to the game and retained;
Such students enter through and are counted by a turnstile (which is not used by others in attendance) that is monitored by a representative of the department of athletics who verifies in writing the accuracy of the count on a per-game basis; or
Such students enter through a gate (that is not used by others in attendance) at which a representative of the department of athletics counts them individually with a manual counter, and the representative provides a written statement verifying the accuracy of the count on a per-game basis.
Student-athletes and cheerleaders scheduled by the institution to be at the game and students performing services at the stadium (e.g., concessionaires, ticket takers, parking-lot attendants, ushers, grounds keepers) shall not be counted toward meeting the attendance requirements.
For an institution to meet the FBS attendance requirements, tickets for a football contest obtained by an institution through an exchange agreement or a purchase agreement with another institution may be used only if sold for at least one-third of the highest regular established ticket price and are used to attend the game. If there are college football games this fall, the likelihood of little to no fans permitted are highly likely, making this waiver essential.
Prior to the FBS attendance waiver decision in May, the 3C approved a blanket waiver to allow institutions to not have to comply in 2020-21 with the legislated minimum institutional financial aid requirements per Division I Bylaw 20.9.3.2. This waiver provides macro-relief for institutional obligations, but does not waive Division I Bylaw 15 requirements which, in part, are intended to protect student-athletes currently on an athletics scholarship. Namely, Bylaw 15 does not permit institutions from canceling or reducing financial aid scholarships for reasons such as a wilting athletics budget during a pandemic, assuming the student-athlete has not quit, remains academically eligible, and has not entered the NCAA Transfer Portal (three reasons a student-athlete’s scholarship could be reduced or canceled).
This waiver does provide cover for Division I institutions that may have needed to embark on significant belt-tightening in the past few months especially for the recruiting and scholarship budget line items. Noting the universal dead period in Division I through August (and possibly beyond) will likely hamper the recruiting engagement opportunities for all sports, Division I athletic departments around the country may have directed their head coaches to pull back on the number or size of new athletic scholarships offered to recruits (including via the NCAA transfer portal) and to make due with more roster attrition -- not replacing 1-for-1 as many outgoing seniors and transfers with incoming freshmen and inbound transfers.
The requirement for minimum institutional financial aid awarded speaks to what Division I institutions must award, in aggregate, in terms of institutional financial aid to support its student-athlete population. This particular waiver may also provide institutions who recently cut sports some room to breathe.
The rule -- Bylaw 20.9.3.2 -- states that a Division I member institution shall provide institution aid to student-athletes equal or exceeding one of the following:
A minimum of 50% of the maximum allowable grants in 14 sports, at least seven of which must be women's sports. If an institution uses indoor track and field, outdoor track and field and cross country to meet the financial aid criterion, it must award the equivalent of at least 80% of the full grants for men and 80% of the full grants for women in those sports. If the institution counts two of those three sports to meet the financial aid criterion, it must award the equivalent of at least 70% of the full grants for men and 70% of the full grants for women. If the institution counts indoor and outdoor track and field as one sport, it must award the equivalent of at least 50% of the full grants for men and 50% of the full grants for women;
Financial aid representing a minimum aggregate expenditure of $1,604,038 in 2018-19 (with at least $802,019 in women's sports) and $1,679,428 in 2019-20 (with at least $839,714 in women's sports) exclusive of grants in football and men's and women's basketball, provided the aggregate grant value is not less than the equivalent of 38 full grants, with at least 19 full grants for women. The Strategic Vision and Planning Committee shall adjust the minimum aggregate figure annually to reflect inflation, based on changes in average national tuition charges for regionally accredited institutions. The committee shall announce the revised figure in the fall each year for the following academic year. If the institution does not sponsor men's or women's basketball, the minimum aggregate expenditure must be $1,058,994 in 2018-19 and $1,102,764 in 2019-20 for the gender without the basketball program, but in no case fewer than the equivalent of 29 full grants for that gender;
A minimum of the equivalent of 50 full grants (at least 25 full grants in women's sports), exclusive of grants awarded in football and men's and women's basketball. If the member institution does not provide men's or women's basketball, it shall sponsor a minimum of 35 full grants in the sports program for the gender without the basketball program; or
A minimum of one-half of the required grants or aggregate expenditures cited in (a), (b) or (c) above, for institutions that depend on exceptional amounts of federal assistance to meet students' financial needs. This provision shall be applicable to an institution in a given year if the average per-student allotment of Pell Grant dollars for undergraduates reported to the U.S. Department of Education the previous September is more than one standard deviation above the mean for all reporting Division I member institutions that year. If an institution does not qualify under this provision after having been able to do so the previous year, the institution may continue to use this alternative for one year and shall not be required to meet the provisions of (a), (b) or (c) above until the following year. This provision shall be applicable only to institutions that were members of Division I on September 1, 1990.
All institutional financial aid (including aid that is exempted from an equivalency computation per Bylaw 15.5.3.2.4) awarded by the member institution to a counter shall be used to meet the appropriate minimum.
A key procedural detail to these minimum aid awards is that the aid must actually be awarded -- not just scripted in a scholarship that ultimately does not materialize. At the same time, the NCAA minimum aid requirements can be met, in part, through aid awarded to student-athletes in emerging sports for women as well as student-athlete employment earnings from the institution (e.g., working for Admissions Office; working front desk in residence hall) when the Athletics Department did not intercede in arranging the student-athletes’ employment. Countable financial aid awarded to a student-athlete who has exhausted his or her eligibility in a sport during a previous academic year and countable aid provided to a medically exempt student-athlete per Bylaw 15.5.1.2 may be used to meet the appropriate minimum as well. Member institutions that did not award any athletically related financial aid in any sport as of January 11, 1991, are exempted from these minimum requirements.
The Division I Committee on Legislative Relief approved a blanket waiver to allow institutions to honor athletics aid agreements and exempt the 2019-20 amount from financial aid limitations for student-athletes that took a leave of absence during the 2019-20 academic year to train for official national team tryouts and competition. This relief was student-athlete-centered, but it could put more stress on the athletic department’s budget as student-athlete Olympic hopefuls may seek to use this training exception in 2020-21 and prolong the institutions’ financial commitment during an extended leave of absence.
The 3C’s recent waiver decisions considered other situations in which a Division I institution might want to spend more money where they have not been legislatively permitted before.
The 3C recently decided that Division I institutions could provide more economic support to volunteer coaches who are facing strong headwinds in terms of earning opportunities. Volunteer coaches, by rule, are not permitted to receive direct compensation from the Division I institution, although they are permitted to earn income from employment in camps and clinics. The pandemic to date has nearly eviscerated camps and clinics and the employment opportunities that go with them.
The 3C approved a blanket waiver to permit institutions to reimburse any expenses incurred by student-athletes (e.g., nonrefundable deposits for travel not covered by the institution) in conjunction with a foreign tour that will not occur due to COVID-19.
These are a few recent examples of how Division I has identified ways to give its membership more financial latitude to traverse the next year or two when the projected revenues and financial needs are not matching the ‘normal’ state of economic affairs in Division I.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
