Halfway through its first quarterfinal game in Madison Square Garden in March, and with New York City poised to shut down sports as the pandemic hit, the Big East pulled the plug on its men’s basketball tournament—which generates nearly a fifth of the conference’s annual revenue, according to its most recent tax filings. Between $10 and $13 million of the conference’s overall yearly revenue, which totaled just over $64 million in 2018, can be attributed to the tournament each year.
Despite the disruption, the Big East was able to recoup much of 2020’s lost tournament money through a $10.5 million payout from its event-cancellation insurance policy. A conference source not able to speak publicly on the private contract confirmed the final figure.
The city government mandate strengthened the league’s claim on this year’s particular policy—renewed several months before the tournament—which included cancellation because of communicable diseases, encompassing pandemic coverage. The conference also has insurance policies for the next two Big East tournaments, which would cover another worst-case scenario of a second spring of disrupted postseason play due to the still-surging coronavirus.
Athletics administrators at a trio of Big East institutions confirmed that the policy was paid out, which, along with some cash reserves, helped the conference mitigate reductions to its own internal distributions.
The NCAA itself recouped some revenues, to the tune of $270 million, from event-cancellation insurance policies that included communicable disease and pandemic coverage, but it paled proportionally to the Big East’s policy. March Madness typically generates the majority of the NCAA’s $1 billion in annual revenue, with the policy payouts covering only a fraction of the losses. An additional $50 million from the NCAA reserves still left the organization far behind a typical year—resulting in the reduction of the NCAA’s annual distributions to a third of what had been expected prior to the pandemic—but the Big East’s policy made the conference largely whole in terms of its own tournament losses.
In 2018, the conference reported $5.9 million in income directly tied to its championships—mostly from the men’s basketball tournament at Madison Square Garden. A portion of the Big East’s $36 million annual media deal with Fox reflects the value of those tournament games, which bring in significant corporate sponsor dollars as well. The $10.5 million insurance payment made up for most of the money the conference expected from the tournament (direct and indirect revenue streams considered) before its COVID-19 cancellation, the source added.
The Big East’s 2020-21 basketball campaign is just getting underway, and already regular season cancellations have started. No. 2 Baylor’s matchup with Big East school Seton Hall was canceled on Nov. 29; the St. John’s men’s basketball team’s trip to Lubbock to take on Texas Tech on Thursday as part of the Big East-Big 12 Battle has also been cancelled. DePaul, Creighton and Seton Hall have also already experienced disruptions.
The week-long conference tournament in the Garden and the massive endeavor that is March Madness are where the Big East really makes its basketball money, though—making spring much more important than these first few weeks of non-conference contests. While the hope is not to have to tap into another year’s insurance policy, the league is once again prepared should that become the case.
With assistance from Eben Novy-Williams.