(Bloomberg) -- The National Collegiate Athletic Association will distribute $225 million to schools this year, about 37% of its original projection, after the organization canceled its main source of income, the men's basketball tournament, due to the coronavirus.
The NCAA board of governors voted Thursday to approve the distribution. It had previously budgeted around $600 million, through a mix of grants and payouts based on athletic performance, academic performance and scholarship funds.
Schools around the country rely on those payouts to balance their budgets, and were anxiously awaiting the NCAA's decision. A 63% shortfall is likely to cascade across the college sports world, as schools reevaluate personnel decisions, facilities projects and even which sports they offer.
Nicknamed March Madness, the NCAA men's basketball tournament makes up more than 85% of the NCAA's yearly revenue. Almost all of that comes from the annual rights fees that CBS and Turner pay to broadcast the 68-team tournament. The NCAA doesn't control the college football postseason.
The Indianapolis-based governing body's revenue topped $1.2 billion last year, with $610 million sent back to its members. It's unclear what the NCAA's total will be this year. It's losing the bulk but also cutting expenses, given that it canceled all spring championships. A Moody's report from earlier this week forecast a $475 million decline, which would put revenue around $700 million.
Of the $225 million in payouts, $50 million will come from the NCAA's reserves. The rest will come from a line of credit that the association says it will pay off with a $270 million event-cancellation insurance policy.
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