Current Status of NCAA Financial Dashboard and Reporting Systems Knight Foundation Commission on Intercollegiate Athletics October 2008

Presidential Task Force Fifty member presidential task force findings: Not a financial crisis, however current trends are unsustainable. Resource decisions made by institution. Need for presidential leadership and institutional accountability. Strategy for altering behavior is through education and assessment tools. Establish standardized financial definitions and reporting. Creation of dashboard indicators. October 27, 2008 Knight Commission

Dashboard Indicators Aggregate data supplied by member institutions after an independent third party review. Twenty-six indicators (examples include): Generated revenue/total athletics revenues. Salaries and benefits/total athletics expenditures. Athletics expenditures/institutional expenditures. Athletics expend rate of change/university expend rate of change. Athletics debt service/athletics expenditures. October 27, 2008 Knight Commission

Allocated Versus Generated Revenues Allocated revenues include: Student fees allocated to athletics. Direct institutional support. Indirect institutional support. Direct government support. Generated revenues include: Ticket sales. Radio and television receipts. Alumni and booster contributions. Other revenues not dependent on entities outside the athletics department. October 27, 2008 Knight Commission

Next Steps Presidents received dashboards last May. Universities may update prior revenues and expenses data with submission of FY 2008 data. Fiscal Responsibility Oversight group appointed to lead enhancement effort group comprised of President’s CFO’s, AD’s and Athletics Business Officers. Reviewed comments from 1st year and modifications were made to 2nd year instructions. Examples of modifications are: October 27, 2008 Knight Commission

Goals of New NCAA Financial Data Collection Process Consolidation of all financial data collection efforts. Coordination of third party review with financial reporting. Alignment of institutional audit cycles with NCAA financial reporting. More consistency and transparency of financial reporting, leading to more relevant and accurate information. Shared responsibility by CEO, CFO, and AD. October 27, 2008 Knight Commission

Outcomes of New NCAA Financial Data Collection Process Improved reporting of both revenue and expense line items: Separate allocated and generated revenues. Include indirect as well as direct expenses. Minimize “Other” categories. Better inclusion of ancillary revenues. More detailed information on compensation issues. Inclusion of partial capital expense information. Because of these changes, the new data are generally not comparable to prior data. October 27, 2008 Knight Commission

New Expense Lines Coaches’ compensation paid by third party. Severance payments. Support staff/administrative salaries paid by the institution (formerly included in “other”). Support staff/administrative salaries paid by third party. Direct facilities maintenance and rental. Indirect facilities maintenance, rental and support (offsetting revenue item). Spirit groups. Medical and insurance. Membership dues. October 27, 2008 Knight Commission

Highlights from NCAA 2006 Revenues and Expenses Report

Dashboard Indicators Median Values 2006 FBS FCS No FB Athletics as % of Total Institutional Budget 5% Generated Revenues as % of Total Revenues 76% 28% 22% Self-sufficiency (Generated as % of Expenses) 77% 26 % 21% Reliance on Football Rev. 40% 18% N/A Reliance on MBB and WBB 14% 17% 31% October 27, 2008 Knight Commission

Dashboard Indicators 2006 FBS FCS No FB Grants in Aid as % of Total Operating Expenses 17% 29% Total Comp. as % of Total Operating Expenses 33% 32% Coaches’ Comp. as % of Total Operating Expenses 19% 18% Adm. Comp. as % of Total Operating Expenses 16% 13% October 27, 2008 Knight Commission

Division I Median Athletics Revenues and Expenses – Fiscal Year Ending 2006 FBS FCS No Football Total Revenues 35,400,000 9,650,000 8,750,000 % Inc. from 2004 26% 22% 19% Generated Revenues 26,450,000 2,350,000 1,800,000 16% 13% 20% Total Expenses 35,750,000 9,500,000 8,900,000 23% 24% Total Net Revenues 163,000 55% N/A October 27, 2008 Knight Commission

Median Operating Results Fiscal Year 2006 Number (%) Average % Change from 2004 Generated Revs Exceed Expenses FBS 19 (17%) 4,300,000 65% FCS N/A No Football Expenses Exceed Generated Revs 99 (83%) (8,900,000) 25% 118 (100%) (7,100,000) 20% 93 (100%) (6,600,000) 22% October 27, 2008 Knight Commission

Top Three Average Revenue and Expense Categories at Division I Institutions By Subdivision for Fiscal Year Ending in 2006 Revenue Categories Expense Categories FBS Highest Alumni Contributions – 24% Salaries – 32% 2nd Highest Ticket Sales – 23% Grants-in-Aid – 16% 3rd Highest NCAA/Conf. Distributions – 14% Direct Facilities/Maint. – 14% FCS Direct Inst. Support – 45% Student Fees – 15% Grants-in-Aid – 25% Indirect Inst. Support – 10% Team Travel – 8% No Football Direct Inst. Support – 47% Salaries – 31% Student Fees – 18% Grants-in-Aid – 29% Alumni Contributions – 8% October 27, 2008 Knight Commission

Front Burner Issues Accounting for Grants-in-aid. Improved reporting of ancillary revenues. Inclusion of additional facilities data (as addendum to report). Solicit feedback re: Dashboards. Continued refinement of definitions, working with advisory committee. EADA (DOE) reporting deadline/quality. October 27, 2008 Knight Commission