Risk Assessment Executive Summary

The Charge and Outcomes

Mitigating Strategies

Introduction

In December 2003, Deloitte was charged by the NCAA Executive Committee Finance Committee to perform an assessment of the Association’s risks. The scope of the project required Deloitte to facilitate a process with the NCAA staff to complete a high-level assessment of key risks identified by management and members of the Executive Committee Finance Committee. The following is a summary of the risks identified and specific strategies that are recommended to mitigate the risks.

The key risks that could have a significant adverse impact on the Association are:

1. Adverse reputation and brand impacts due to external and Association actions.

2. Lack of revenue diversification.

3. Limitations on the NCAA’s ability to effectively govern due to federal or state legislative intervention or adverse legal interpretation of NCAA regulations and standards.

A self-assessment was performed by senior management and NCAA subject matter experts to determine preparedness, likelihood and residual exposure of each of the three areas of risk. The process identified current and future mitigation strategies for each risk. Staff recommends the following mitigation strategies be further developed and implemented in order to increase the level of preparedness.

1. Reputational Risk: Reputation is the Association’s most valuable asset and without strong strategic and proactive management, the NCAA’s reputation could adversely affect the public’s understanding and confidence in the integrity of intercollegiate athletics. Reputation is also a common theme in all the significant risks identified and therefore requires indisputable positive direction and clear-cut leadership practices that strengthen the NCAA brand and its reputation. Staff will implement the following key initiatives to enhance the perceptions of the Association and intercollegiate athletics:

· Develop proactive media policies and a response team to promote and support swift accurate response, and to correct and clarify erroneous reports in the media.

· Strengthen education and familiarization of NCAA and core values.

· Develop proactive measures to announce decisions in high-profile student-athlete reinstatement cases and be prepared with appropriate communications strategies and tools.

· Identify non-traditional audiences and unconventional platforms for the NCAA president and other senior staff members to explain issues to the public, media and stakeholders.

· Generate national media opportunities for university presidents on key topics while working with the NCAA president’s office to quickly identify participants.

· Surround the NCAA president with third parties who will advocate for and support the NCAA.

2. Revenue Diversification Risk: The Association’s reliance on a single source of revenue makes the organization vulnerable to competitive actions, adverse events, stakeholders’ issues and the impact on the bundled rights agreement. Staff recommends the following initiatives to mitigate the lack of revenue diversification:

· Conduct an independent assessment of NCAA assets and rights valuation.

· Strengthen partnerships to support growth strategies for current championships and identify new opportunities to increase the quality of our assets, while protecting the integrity of the student-athlete experience.

· Identify the “next comer” that will supplement or increase the value of assets.

· Develop strategies to protect and maintain integrity of student athletes and their experience

· Engage stakeholders in developing growth strategies for regular season and championships.

· Encourage “harvesting” of additional revenue opportunities from key championships.

• Study the benefits of consolidating site selection for various championships.

3. Legal Interpretation Risk: Adverse legal rulings and interpretations by the court systems has the potential to impact the Association’s ability to govern and regulate intercollegiate athletics which could improve the student-athlete experiences. Staff recommends the following mitigating strategies to reduce the risks of adverse legal interpretations.

• Develop a systemic review of NCAA legal procedures and alternative forums for resolutions of issues.

• Develop additional scenarios and contingency plans for cases that have a higher likelihood of threatening the Association’s core mission and values.

• Explore the use of alternative forums for dispute resolution outside of courts.

• Engage outside attorneys to conduct a systematic review of NCAA procedures involving enforcement investigations, waiver requests, petitions for reinstatement, committee on infractions, infractions appeals, administrative reviews, etc.

• Review current processes to determine if an appeal process for resolution of disputes exists, when disputes occur. When a process does not exist determine whether the Association should develop an additional opportunity for review of the decision.

4. Legislative Intervention Risk: Regulatory intervention that could impact the NCAA’s ability to administer its core purpose, goals and legislative authority. Maintaining the current nonprofit tax status by ensuring that athletics is integral to higher education.

· Advance relationships and build coalitions that disseminate strategies and decisions that support higher education and values student-athlete and sports related issues.

· Educate and communicate on issues that focus on student-athletes and the NCAA.

· When needed, obtain consultants with effective relationships with decision-makers or elected leadership.