Courtesy: Robert Dickson
NCAA President Charlie Baker sent a letter on Tuesday morning to all Division I members outlining a proposal for a new subdivision that would loosen the NCAA’s stance on amateurism and permit schools to provide compensation to their student-athletes.
President Baker cites the many financial and operational differences not only between Division I schools, but across all three levels of college sports. Division I schools spend between $5 million and $250 million annually on their athletics programs. There are 59 Division I schools that spend over $100 million annually on their athletics programs. On the other end of the spectrum, 98 percent of Division II and Division III schools spend less than $20 million annually on their athletics programs.
— Ross Dellenger (@RossDellenger) December 5, 2023
With these discrepancies in mind, Baker proposed a new, “forward-looking framework” for college sports.
Under this framework, two dramatic changes would need to be initially implemented. First, it would be possible for all Division I colleges and universities to offer their athletes any level of enhanced educational benefits they deem appropriate. Currently, schools are limited to the amounts provided by the Supreme Court in NCAA v. Alston. Second, rules should change for any Division I school, at their discretion, to enter into name, image, and likeness (NIL) opportunities directly with their student-athletes.
“These two changes will enhance the financial opportunities available to all Division I student-athletes,” Baker wrote.
Third, a subdivision comprised of the wealthiest schools would be required to do two things:
- While complying with Title IX regulations, invest at least $30,000 per year into a trust fund for at least half of the institution’s student-athletes.
- Work with the NCAA staff and other schools that decide to opt-in to the subdivision to create rules that are different from the rest of the Division I schools.
This proposal comes while the NCAA is engaged in multiple legal battles involving compensation and the rights of student-athletes. Most significant of those battles is House v. NCAA, where the NCAA is fighting an uphill battle that could leave them and the Power Five conferences on the hook for over $4 billion in NIL back pay and broadcasting revenue payments. Baker’s proposal is likely an attempt to limit future litigation with athletes over compensation matters.
This new model “gives the NCAA a chance to propose a better way to support student-athletes at the highest revenue schools by providing significant financial support to student-athletes in revenue positive and nonrevenue sports alike,” Baker wrote. Remaining atop of college sports is important for the NCAA amid a growing dialogue that some schools should break off from the governing body and self-regulate.
One significant topic not addressed in President Baker’s letter is the employee status of student-athletes under this new subdivision. This is a hot topic in college sports that is being heard in two NLRB matters as well as in the U.S. Eastern District Court of Pennsylvania in Johnson v. NCAA. The NCAA would likely seek an antitrust exemption from Congress that says student-athletes cannot be employees of their universities.
This proposal is without a doubt the most dramatic compensation model that the NCAA has proposed and a sign that the landscape of college athletics is set to change.