By Rachel Bachman 

Companies including AT&T Inc., Coca-Cola Co. and others together pay more than $200 million every year to associate their brands with the National Collegiate Athletic Association. Their sponsorship fees give them the exclusive right to associate with 90 NCAA sports championships.

Yet the big sponsorship dollars aren't helping any of the sports except one -- Division I men's basketball -- prove the commercial worth of their championship events and attract new investment that could expand their audiences.

That's because the corporate sponsorship dollars aren't paid to the NCAA at all. Instead, a decade ago the NCAA handed off its sponsorship program to CBS and Turner Sports as part of the broadcasting deal for the men's basketball tournament.

CBS and Turner make a fixed annual payment -- currently $850 million -- to the NCAA that increases each year. The networks make most of their money from that deal by selling ads for the men's basketball tournament.

But they also control the rights to sell sponsorships for all NCAA-run sports championships -- a sideline that this year brought in roughly $211 million, according to an estimate by the IEG Sponsorship Intelligence Database. As stipulated in the NCAA contract, CBS and Turner keep that sponsorship revenue.

CBS and Turner don't sell individual sponsorships to specific sports. They sell broad NCAA sponsorships, typically to companies that are interested in men's basketball. That setup makes it challenging for sports like women's basketball and gymnastics to build support from sponsors, often one of the largest sources of revenue for sporting events.

"The current deal provides a wonderful sense of financial security for the NCAA and the membership," said Amy Huchthausen, commissioner of the Division-I America East Conference. "I think the question is, Why are we limiting these other sports and other championships from providing even more security -- while maybe being in conflict, or at least creating a tension, around gender equity?"

The NCAA's sponsorship outsourcing has upsides. It streamlines the sales process, gives NCAA staff less to worry about and provides value to CBS and Turner, the NCAA's most important business partners.

An NCAA spokeswoman told The Wall Street Journal that the NCAA's sponsorships "support nearly half a million student-athletes and 90 championships."

The spokeswoman said that sponsors may choose to supplement their agreement with additional ad dollars on ESPN, such as Capital One's presenting sponsorship of the telecasts of the women's basketball selection show and Final Four. She directed questions about sponsorship revenue to CBS and Turner, which declined to comment.

In March, the NCAA faced a furor when a player's viral video showed the women's basketball tournament's meager weightlifting setup compared with the men's sprawling facility. That led to a broader outcry over other differences between the men's and women's tournaments -- such as the NCAA's practice of withholding from the women the use of the powerful "March Madness" brand even though it's trademarked for both tournaments.

In response to the criticism, the NCAA issued a statement that portrayed the men's tournament as a financial juggernaut and the women's tournament as a financial loser.

"After both direct and indirect expenses were accounted for in these championships, the total net income for men's basketball was $864.6 million, while women's basketball lost $2.8 million. This is the largest loss of any NCAA championship."

The NCAA statement didn't spell out the way in which the collective sponsorship rights are packaged in the broadcast deal for the men's tournament. Similarly, broadcast rights for the women's tournament aren't sold separately, but are part of a 14-year contract with ESPN to air about two dozen NCAA sports championships through 2024. This year, the deal was worth nearly $42 million.

The package deals mean that the NCAA doesn't seek individual broadcast or sponsorship revenue for the women's tournament or any of the other NCAA championships it runs. (Top-division college football operates its own championship and sells its own sponsorships.)

The exclusive sponsorship tie-ups that are made via the men's basketball deal can deprive the other sports of potential revenue, says Robin Harris, Ivy League executive director and a former member of the NCAA Competition Oversight Committee, which oversees championships other than basketball and football.

She said that hosts of NCAA championships -- universities, conferences and local sports commissions -- long have been frustrated that they aren't allowed to sell sponsorships in numerous product categories because of exclusivity agreements in the NCAA's sponsorships sold by CBS and Turner.

If the NCAA's official car-rental company doesn't advertise at the men's or women's ice hockey championships, for example, local organizers can't sell sponsorships to any other car-rental company. The NCAA's 18 current sponsors include fast food, insurance and other categories.

Harris suggested the NCAA add a stipulation to sponsorship agreements that would require a sponsor to spend a minimum amount of money at a championship, "and if they don't, they lose that exclusivity at that championship."

The women's basketball final drew more than 4 million viewers this year, up 10.5% from 2019, and its TV audience often ranks second in size among all NCAA-run championships. The men's basketball final drew 17 million viewers, down 13.8% from 2019.

The NCAA's three top-tier sponsors, Capital One, AT&T and Coca-Cola, didn't comment directly on the NCAA's sponsorship-sales approach. But the three companies emphasized in statements to The Wall Street Journal their commitment to supporting all NCAA sports and women's sports in particular.

"We have been in touch with the NCAA regarding our disappointment in the treatment disparities between male and female athletes," a Coca-Cola spokeswoman said.

The men's basketball tournament generates a large majority of sponsorship value -- but not all of it, said Rob Temple, a former ESPN executive who worked extensively on sponsorships.

"Why doesn't the NCAA allow there to be an official NCAA softball?" said Temple, now CEO of FishBait, a lifestyle marketing consultancy. By not letting individual sports seek sponsorships, he added, "It's clearly unrealized value, unrealized opportunity."

The NCAA's sponsorship setup seems unlikely to change soon. Several years ago the NCAA extended its deal with CBS and Turner for an average of about $1 billion a year through 2032.

Write to Rachel Bachman at


(END) Dow Jones Newswires

May 13, 2021 07:14 ET (11:14 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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