Knight Commission: New Governance for FBS Football Proposal

The Knight Commission recently introduced “Transforming the NCAA D-I Model: Recommendations for Change,” to propose a new governing entity for football at the Football Bowl Subdivision (FBS) level. It’s a plan that could have a profound impact on the distribution of revenues.

Under this proposal, the NCAA would no longer govern or distribute revenues specific to member institutions that participate in the Football Bowl Subdivision (FBS) and thus receive revenues distributed by the College Football Playoff (CFP). The NCAA revenue distribution model will exclude football-related distributions to the approximately 130 FBS institutions.

The proposal suggests that the NCAA’s revenue distribution formula should count only sports for which the NCAA operates a postseason championship and controls revenues associated with that championship. This includes elimination of the following components of NCAA revenue distribution:

• Grants-in-Aid: Excludes FBS football scholarships from the total athletics scholarships figure. With football accounting for a significant portion of total athletic scholarships at FBS member institutions, this results in a sizeable impact to the escalating valuation of scholarship tiers that are derived by units of 50.
• Sports Sponsorship: Excludes FBS football as a NCAA Division I sponsored sport. This results in a decrease of $36,570 per FBS member.
• Student Athlete Opportunity/Special Assistance: These distributions are allocated based on submissions for grants-in-aid and sports sponsorship.

The Knight Commission proposes instead to redirect the $61 million FBS-related distributions through various means. This would involve adding a fund specific to diversity initiatives and increasing amounts for non-FBS sports sponsored using a tiered multiplier.

The commission also calls for a more formalized governance over the CFP and FBS institutions and would relieve the NCAA from this oversight. All other sports, including Football Championship Subdivision (FCS) football, would remain within the NCAA’s governance.

The proposal wouldn’t impact how the NCAA earns revenue since they would retain their largest revenue source, March Madness. It would, however, impact how the NCAA distributes that revenue to each of its Division 1 members. While the Knight Commission has no ability to enforce any of these changes, their proposed overhaul was intended to start the conversation about some perceived inequities in college sports funding.

It’s still too soon for athletics departments to quantify the financial impacts of the Knight Commission proposal. And since implementation in its current form is unlikely, projecting the impact is not time well spent. However, we believe there is a correlation between the financial impact of this proposal on the size of the institution and where they generate their revenues. Sure, it could be a relatively small drop in the bucket for the largest Power 5 institutions—and potentially very advantageous for mid-major programs (both FCS and those without football).

Group of 5 programs, however, are stuck in the middle of the arms race while having an over-reliance on student fees and institutional support. They’ll potentially be impacted the most with a big hit to their budgets.

If you have questions about how this proposal could impact your institution, reach out to your collegiate athletics CPAs. We’ll continue to monitor the reception and progress of the Knight Commission proposal and its effects on collegiate athletics.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.