By St. John’s University Professor Robert J. Romano
Whether it was the weight room consisting of a single stack of dumbbells and some yoga matts, the barely edible pre-packaged meals, or being allocated the less reliable Covid-19 antigen test, there is no question that as the women’s basketball teams arrived in San Antonio to compete for the National Championship, the amenities and accommodations that greeted them were grossly unequal compared to those offered to the men’s teams competing in their tournament in Indianapolis.[1] As the tournaments’ host, the NCAA is clearly responsible for any and all of these disparities. But isn’t Title IX a shield to protect student-athletes from this sort of unequal treatment? One would think so since Title IX, a federal civil rights law passed as part of the Education Amendments of 1972, was enacted to protect the individuals from being discriminated against on the basis on sex. Specifically, Title IX reads as follows:
“No person in the United States shall, based on sex, be excludedfrom participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.”[2]
Since it was passed into law, various Federal Courts have found that a Title IX “program or activity” includes “all of the operations of a postsecondary institution, any part of which is extended Federal financial assistance.”[3] Specifically, in the matter of Grove City College v. Bell, the U.S. Supreme Court held that a college or university qualifies as a recipient when it enrolls students who receive federal funds earmarked for educational expenses.[4] The Court found “no hint” that Title IX distinguishes between direct institutional assistance, and aid received by a school indirectly through its students.[5]
But the NCAA is not a college or university, it is a private, non-profit organization, whose purpose, among many, is to host the annual men’s and women’s college basketball championships. Per section 1687(3) of Title IX, however, programs and activities include those connected to corporations, partnerships, or other private organizations, or an entire sole proprietorship, if assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole.”[6] Therefore, it would be logical to assume, based upon section 1687(3), that if any part of a program or activity under the control and supervision of the NCAA has received some form of federal financial assistance, all NCAA operations would be subject to and needing to comply with Title IX.
Nonetheless, in the 1999 case of National Collegiate Athletic Assn. v. Smith,[7]the U.S. Supreme Court held that the NCAA’s receipt of dues payments from its member colleges and universities which received federal funds, was not sufficient to subject the NCAA to a lawsuit under Title IX. The Court distinguished the coverage of Title IX in that “[e]ntities that receive federal assistance, whether directly or through an intermediary, are recipients within the meaning of Title IX; entities that only benefit economically from federal assistance are not.”[8] The Court concluded that “the NCAA’s receipt of dues (from its member institutions) demonstrates that it indirectly benefits from the federal assistance afforded its members,” which without more, “is insufficient to trigger Title IX coverage.”[9]
In short, this means that the NCAA is not required to abide by or be subject to the rules of Title IX, even though its member colleges and universities are subject to the law since they are the ones receiving federal funding. The Court, however, left open the possibility of an instance in which Title IX might apply to the NCAA, but to date, no case has come along allowing the Court to make such a ruling. Interestingly, however, what has changed since the ruling in NCAA vs Smith, is that the NCAA has implemented an annual plan to redistribute monies earned from TV rights and other revenue generators associated with the annual men’s basketball tournament known as March Madness, back to its Division I member institutions.[10]
The NCAA, as a non-profit organization, is required by federal and state tax law to reinvest and/or distribute a substantial portion of its revenues generated per tax year.[11] The NCAA, per its 2020 Division I Revenue Distribution Plan, offers nine areas, or what have been termed ‘returned revenue’ funds, wherein the NCAA distributes revenue generated from March Madness back to its member colleges and universities.[12] These funds provide monetary support for academic personnel salaries, academic services, facilities, while also allowing other benefits to be offered directly to students-athletes, such as tutoring, computer equipment, or educational supplies. These nine funds include the following: Equal Conference Fund, Basketball Fund (also called Basketball Performance Fund), Sports Sponsorship Fund, Grant-in-Aid Fund, Academic Enhancement Fund, Academic Performance Fund, Conference Grants Fund, Special Assistance Fund, and the Student Athlete Opportunity Fund.[13]
As part of the Revenue Distribution Plan, the NCAA describes the specific purpose for each fund. The Academic Enhancement Fund is intended to enhance academic support programs for Division I athletes,[14] while the Conference Grants Fund is distributed to Division I men’s and women’s basketball-playing conferences, that employ a full-time administrator, to enhance or implement programs and services in a variety of areas including diversity and safety.[15]
The Special Assistance Fund’s purpose, according to the NCAA, is to “meet the student-athletes’ needs of an emergency or essential nature for which financial assistance otherwise is not available.”[16] As per its 2020 Revenue Distribution Plan, the NCAA reported that it allocated a total of $18,747,064.00 through its Special Assistance Fund to help Division I student-athletes with such special financial needs.[17] What is interesting, however, is that the NCAA’s Special Assistance Fund receives monetary support from three sources, one of which is the Federal Pell Grant system – not from monies received from the broadcasting rights deal with CBS and Turner Broadcasting System.[18]
NCAA SPECIAL ASSISTANCE FUND
The Special Assistance Fund has three components to the calculation, as follows with the percentage of the fund allocated to each component noted in parentheses:
- Prior academic year number of Pell grants by institution (70%).
- Prior academic year number of grants-in-aid equivalencies by institution (15%).
- Prior academic year number of sports sponsored by institution (15%).
Pell Grant Data:
- Only sports in which the NCAA conducts championships competition (which meet the minimum contests and participant requirements of Bylaw 20.9.6.3) and emerging sports for women are valid for revenue distribution purposes.
- Only student athletes are countable for the Pell Grant submission (omit practice players).
- Student-athletes should only be counted once on the Pell Grant submission.
- Only Pell grants that have been awarded are countable for the Pell Grant submission (full, semester, summer).[19]
As detailed in its Revenue Distribution Plan, nearly seventy percent of the NCAA’s Special Assistance Fund looks to be subsidized by the Federal Pell Grant system.[20] It is arguable, therefore, that based upon the statements made by the NCAA’s through its own Revenue Distribution Plan, that the NCAA does seemingly receive money from the Federal government in the form of assistance, i.e. Federal Pell Grants. This money, in turn, is then used to provide various forms of financial support to its member institutions and their student-athletes.
Since the NCAA is receiving, as it alleges in its Revenue Distribution Plan, and then redistributing what appears to be Federal Pell Grant monies, an amount that totals approximately $13,123,000.00 (70% of the $18,747,064.00 Special Assistance Fund for 2020 as noted below),[21] it is therefore, arguably, the direct recipient of federal financial assistance. And, in being a recipient, the Courts should now look at the NCAA as an entity that is subject to the rules and regulations as articulated in Title IX.
| 2020 REVENUE DISTRIBUTION | ||
| FUND: | DATE: | AMOUNT: |
| Equal Conference Fund | April 15 | $53,632,200 |
| Basketball Performance Fund | April 15 | $167,600,624 |
| Sports Sponsorship Fund | May 6 | $74,841,446 |
| Grants-in-Aid Fund | May 20 | $146,391,378 |
| Academic Enhancement Fund | June 10 | $49,038,143 |
| Academic Performance Fund | June 10 | $11,060,171 |
| Conference Grants | June 10 | $9,928,499 |
| Special Assistance Fund (SAF) | June 10 | $18,747,063 |
| Student Athlete Opportunity Fund (SAOF) | June 10 | $68,383,181 |
| 2020 Revenue Distribution Total |
But is this assumption true, is the NCAA the recipient of financial assistance via the Federal Pell Grant system that would subject it to Title IX scrutiny as reasoned above? No, not actually – because what the NCAA does, in belief, is masterfully manipulate its Annual Division I Distribution Plan, so that even though it does not actually receive any Pell Grant money directly or indirectly from the federal government, it makes it appear as if it does through its Special Assistance Fund. In doing so, the NCAA can then publicize that over $13,000,000.00 it receives from the proceeds of March Madness is provided to help student-athletes who have an emergency or essential need.
The truth of the matter, however, is that a student-athlete is entitled to a Pell Grant, regardless of NCAA’s Special Assistance Fund, if he or she is from a low-income household that displays exceptional financial need.[22] The NCAA does not receive any Pell Grant money from the federal government, nor does it pass along any Pell Grant monies to its member institutions or their student-athletes who need emergency or essential financial assistance, that is not how the Federal Pell Grant system works. In reality, a college or university distributes Pell Grant funds directly to the student-athlete. That college or university is then reimbursed by the federal government, the NCAA plays absolutely no part in this process.[23]
So, yes, it is true that the NCAA does have a ‘returned revenue fund’ known as the Special Assistance Fund and that the fund alleges to be ‘comprised’ of Federal Pell Grant money, which, in reality, it does not. The NCAA is just taking credit so it can be recognized for providing financial assistance to student-athletes that come from low-income households. And because the NCAA does not receive any direct financial assistance from the federal government in the form of Pell Grants, it, for this reason, is not subject to the rules as established under Title IX. But all of this begs the question – where is that $13,123,000.00 the NCAA claims to have passed along to Division I student-athletes through its Special Assistance Fund which was could not have funded by the Pell Grant system?
[1] The men’s weight room looked like something from the CrossFit Games, while they also were entitled to buffet style dining and administered the gold standard PCR Covid-19 tests.
[2] 20 U. S. C. § 1681(a)
[3] § 1687(2)(A).
[4] Grove City College v. Bell, 465 U. S. 555 (1984).
[5] Id., at 564.
[6] 1687(3)
[7] National Collegiate Athletic Association v. Smith, 525 U.S. 459 (1999).
[8] Id.
[9] Id.
[10] On April 22, 2010, the NCAA reached a fourteen-year agreement, worth $10.8 billion (approximately $770 million annually), with CBS and Turner Broadcasting System wherein the two media companies received joint broadcasting rights to the NCAA Division I Men’s Basketball Tournament known as March Madness. In April of 2016, the NCAA and CBS/Turner extended their agreement for an additional eight years, through 2032, while increasing the payment from CBS/Turner to the NCAA by an additional $8.8 billion, averaging now more than one billion dollars per year
[11] 501(c)(3) https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501c3-organizations. The NCAA is allowed to keep some money for salaries and overhead.
[12] NCAA 2019 Division I Revenue Distribution Plan
[13] Id.
[14] Id.
[15] Id.
[16] https://www.ncaa.org/sites/default/files/2012-13_Revenue_Distribution_Plan.pdf
[17] https://ncaaorg.s3.amazonaws.com/ncaa/finance/d1/2020D1FIN_AnnualRevenueDistPlan.pdf
[18] A Pell Grant is a federal program that helps undergraduate students from low-income homes who demonstrate a certain financial need.
[19] NCAA 2020 Division I Revenue Distribution Plan.
[20] NCAA 2020 Division I Revenue Distribution Plan.
[21] Id.
[22] https://studentaid.gov/understand-aid/types/grants/pell
[23] Typically, an institution puts the Pell Grant award in the student’s account balance automatically to cover tuition, fees, and room and board. If there are additional funds left over, a student will be issued a credit, the form of which varies depending on the institution. The credit can be used to pay for books, up to a certain amount, and other educational expenses.
