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Billions of dollars, the NCAA has generated billions of dollars over the years on the backs of the "student-athletes" representing the NCAA member institutions. This week, we will evaluate the NCAA.org website by asking three questions about their marketing strategies and how they position themselves in the market as a nonprofit organization, starting with does the NCAA.org website provide businesses the opportunity to advertise on their site? What are their product offerings? What type of communication method(s) does the NCAA utilize to spread the word about their products and services? The ultimate question is, How does the NCAA generate billions of dollars? I know the answer, but let us first examine some of their business strategies.
NCAA Generates One Billion Dollars of Revenue Annually
The NCAA operates as a non Profit organization, yet it generates 1 billion dollars per year according to a Business Insider article from March of 2019 titled (The NCAA brings in $1 billion a year — here's why it refuses to pay its college athletes). The article discusses how the NCAA has shrouded itself behind the word amateurism (Cameron, 2019).
From the Business Insider article;
"In page four of the NCAA Division I handbook under the heading "The Principle of Amateurism," the NCAA declares student-athletes shall be amateurs in an intercollegiate sport, and their participation should be motivated primarily by education and by the physical, mental, and social benefits to be derived (Cameron, 2019)."
Does the NCAA Allow Advertising on Their NCAA.org Website (Is this where the billions reside)?
We begin by investigating the use of advertising on the NCAA.org website. The NCAA.org website does not have any visible paid advertising such as google ads or any other type of banner or sidebar style ads. That does not mean that the NCAA does not allow advertising. As the governing body for NCAA sports, they provide a platform for the institutions they represent to showcase their schools. Some of the ways they do this is through the use of academic, and athletic-related written material describing the educational and athletic accolades of its participating member institutions.
NCAA.com Does Allow Advertising (Maybe The Billions Reside Here)?
The NCAA also operates another website, "NCAA.com." The NCAA.com website is sports-oriented with access to statistics and highlights. The NCAA.com website is more of an ESPN style website vs. the NCAA.org website, which provides critical information about and for member institutions such as student-athlete eligibility requirements and other student-athlete related topics. The NCAA.com website does allow ads on their site. The front page has a top-right sidebar advertisement, and the footer has advertisements.
What Are the NCAA's Product Offerings? (Hint; They Wear A Uniform)
The "student-athletes" are living, breathing, product advertisements. The student-athletes who put in a lot of work do not see a dime of the one Billion dollars of revenue that NCAA generates outside of a scholarship, and additionally approved stipends. It is also an NCAA violation for Student-athletes to use their name, image, or likeness to generate revenue for themselves. The narrative has begun to change regarding name image and likeness. In another Business Insider Article from October 2019 (NCAA reverses course, may allow student-athletes to market themselves), the author discusses how the NCAA has changed its course about amateurism and will begin allowing student-athletes to profit from their name image and likeness in the future. The NCAA has slowly come to the realization that they can no longer shroud themselves behind the idea of amateurism. (Cash, 2019).
Ed O'Bannon vs. The NCAA
The conversation about allowing student-athletes to profit from their name image and likeness gained a lot of steam in 2014 when a former UCLA basketball player (Ed O'Bannon) and many others began filing an antitrust class action lawsuits. Ed O'Bannon sued the NCAA because of his image and likeness being used in a video game that was licensed by the NCAA.
Marketing Firms Are Beginning to Project The Value Of Top Rated Collegiate Athletes
The NCAA may have the NCAA.org website that does utilize ads to generate revenue; it does have other avenues as a nonprofit where they can generate income. The big money makers are the division one athletes in the top two revenue-generating sports (Football, Basketball) who are the products used to generate revenue. According to a Greenville News article from 6 days ago (So what could Clemson QB Trevor Lawrence be worth this season)? The author discusses how Clemson QB Trevor Lawrence and Ohio State QB Justin Fields, both of whom
project as top-five 2021 NFL draft picks, could both be millionaires before ever stepping onto an NFL field if they were allowed to capitalize on their name image and likeness. According to the author, Justin Fields projects to be worth $1.35 million vs. Trevor Lawrence at $1.23 million. Trevor Lawrence has over 530k followers on Instagram and another 91k+ following him on Twitter. The ability to build a large social media following is one of the most significant opportunities for student-athletes to drive name, image, and likeness revenue (Keepfer, 2020).
The Different Communication Avenues Used by The NCAA To Generate Visibility (Outside Of The Student-Athletes Which Of Course Without The Athletes, No One Would Pay The NCAA)
As discussed above, the NCAA has additional communication avenues at their disposal. They have the NCAA.org website, NCAA.com, and they reside on the top social media platforms. The NCAA operates a few different Twitter and Instagram accounts. For example, the NCAA.org Twitter account (NCAA Eligibility Center) has 46k followers; the same account on Instagram has 3618 followers. The NCAA.com Twitter and Instagram accounts overshadow the two social accounts that represent the NCAA.org website. The NCAA.com Twitter has 1.9 million followers, and the NCAA.com Instagram account has 274k followers.
In a recent Entreprenuer.com article published a day ago, the author talks about 5 Ways a Digital Marketer Can Supercharge Your Online Outreach. One of the five ways discussed included the use of high digital visibility. The NCAA leverages their digital visibility on every platform from television, social media, and via their websites by displaying their top product, student-athletes (NEXT, 2020).
TV Revenue Drives The NCAA Ship
The primary driver of the NCAA marketing and total revenue has been the College Football Playoff, Bowl Game, and March Madness television deals. In a 2016 LA Times article (March Madness through 2032: CBS and Turner extend the contract for NCAA men’s basketball tournament), the author discusses the NCAA(s) TV deal granting CBS and Turner Sports exclusive rights to air March Madness, a deal worth more than $8 billion. The NCAA will receive $1.1 billion per year from 2025 to 2032 from CBS and Turner Sports. According to public NCAA financial documents, the current CBS Sports contract that ends in 2024 is $800M plus per year representing around 75-80% of their total annual revenue. The NCAA does not need to pay for ads, major corporations and TV networks pay the NCAA to air their products, which are the "student-athletes." Corporations pay the NCAA for the right to air a tournament with some of the world's top athletes performing in it. Those same world-class athletes profit zero dollars for themselves (Battaglio, 2016).
Conclusion
So what have we learned throughout our evaluation? The NCAA does use ads to generate revenue on their NCAA.org website, yet they allow paid ads on their NCAA.com website. They generate a billion dollars per year in revenue. Their product is the "student-athlete".
There will be a lot of changes within the NCAA in the next few years, and it will be interesting to see how they continue to approach the changes. The name, image, and likeness changes might open pandora's box for those who were unable to profit in the past leading to litigation unless they can gain immunity. If young children can publish how-to videos on Youtube and become millionaires, high-profile student-athletes can do the same by posting how-to videos on sports techniques or mini-documentaries about their lives. According to the NCAA.org website, only a fraction of student-athletes "go pro" in their sport, so why not allow them to take advantage of their platform while they are at the peak of their opportunity to profit?
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References:
Battaglio, S. (2016, April 12). March Madness through 2032: CBS and Turner extend contract for NCAA men's basketball tournament. Retrieved from https://www.latimes.com/entertainment/envelope/cotown/la-et-ct-cbs-turner-men-s-basketball-tournament-20160412-story.html
Cameron, S. (2019, March 26). The NCAA brings in $1 billion a year - here's why it refuses to pay its college athletes. https://www.businessinsider.com/ncaa-college-athletes-march-madness-basketball-football-sports-not-paid-2019-3
Cash, M. (2019, October 29). NCAA reverses course, may allow student-athletes to market themselves, and it could be worth millions for some of college sports' biggest stars. https://www.businessinsider.com/ncaa-to-allow-college-athletes-to-market-themselves-some-will-make-millions-2019-10
Keepfer, S. (2020, July 17). So what could Clemson QB Trevor Lawrence be worth this season? https://www.greenvilleonline.com/story/sports/2020/07/17/clemson-football-qb-what-could-trevor-lawrence-worth-season/5441141002/
NEXT, E. (2020, July 22). 5 Ways a Digital Marketer Can Supercharge Your Online Outreach. https://www.entrepreneur.com/article/353462