4 big challenges face NCAA and its (eventual) new leader

Listen to some athletic directors recently and you’d think NIL is the root of all evil in college sports. It’s not true. While NIL concerns garner plenty of attention-grabbing headlines, they are a convenient red herring.

Feckless NCAA president Mark Emmert finally is on his way out and the Transformation Committee is working on a much-needed rewrite of the association’s constitution. That makes this an inflection point for an industry undergoing seismic change. While NIL guardrails are needed, the most glaring existential issues aren’t rooted in NIL excess – no matter what is said by athletic directors who have their eyes on big donor dollars being diverted from traditional athletic department ventures into the coffers of ambitious collectives.

As a new landscape takes shape, college sports will confront at least four consequential challenges the next few years. And it almost certainly will do so with the NCAA existing as a severely diminished entity. The association, with its stature and credibility almost entirely eroded, may be tasked with little more than staging championship events (where it can work further on resolving gender equity issues and not inexplicably leaving billions on the table in basketball tournament media rights deals) and providing an enforcement mechanism with teeth (which it never has done fairly or effectively).

Athletic directors can bemoan the outsized influence of boosters in the NIL era all they want – a role well-heeled donors have played in the shadows for decades – but there nonetheless will be a reckoning on these four big-ticket items over the next few years.

1. Athletes being classified as university employees

Talk with the smartest industry minds and they’ll tell you it’s coming. They don’t know when, they don’t know how. It may be through legislation, litigation or the unfair labor practice charges filed with the National Labor Relations Board. In any event, there is a high probability, if not an inevitability, that sometime in the next few years at least a subset of student-athletes will be deemed employees of their universities. This will serve as a monumental reset in the collegiate model. Some of the sharpest athletic directors already are modeling out what this dynamic would entail at their university.

In simplistic terms, virtually everything would be on the table and subject to collective bargaining with athletes. Athletic departments likely would share some revenue with athletes. But it cuts both ways for players; they also, theoretically, would be subject to termination, and even things they take for granted now would be bargaining chips in negotiations. Further complicating matters is that different subsets of athletes – SEC football players versus Pac-12 baseball players, for instance – would wield vastly different degrees of leverage.

Hovering over this potential new reality are Title IX ramifications. Schools would need to provide similar levels of compensation and benefits to male and female athletes. When On3 this winter asked Casey Schwab, founder of NIL-focused Altius Sports Partners, to characterize the feelings of athletic directors about the likelihood of athletes being deemed employees, he said: “Pessimistic, reluctant acceptance. It’s not a positive feeling. It’s, ‘This is going to happen. We get it. This isn’t going to be good for the schools. It’s not going to be good for the athletes.’ ”

2. How many divisions make sense?

The NCAA has many flaws, with the lack of common sense chief among them. While grouping such a large number of schools under one proverbial big tent may have made sense decades ago, it appears nonsensical now amid astronomical athletic department budgets and multibillion-dollar media rights deals on the far end of the spectrum.

There are some 1,100 member schools, with vastly disparate missions, resources and athletic pursuits. No one has better articulated this problem than Caltech athletic director Betsy Mitchell before January’s vote to approve a new NCAA constitution. She astutely asked the common-sense question: “Why are we still trying to stick together? … We do not have one model of college sports. Those days are long over.”

Even within a bloated 350-plus team Division I fraternity, revenues vary tremendously. Some schools are generating a few million dollars per year; Texas generates more than $200 million annually. Tom McMillen, the CEO of LEAD1 Association, which advocates on policy issues facing the 131 FBS athletic departments, told On3 that one could argue that as many as eight divisions – instead of the current three – is more appropriate.

3. Discontent within Power 5 conferences

McMillen touched on what may be a brewing storm that few are talking about. To date, focus has centered on the widening revenue gap between mega-rich conferences like the SEC and Big Ten and the three other Power 5 leagues. But even within Power 5 leagues, there is a growing revenue disparity between blue bloods and rank-and-file schools. For instance, the Big Ten is expected to soon land a new multibillion-dollar media rights deal. The reason is because a lot of people watch Ohio State, Michigan and Penn State, not because a lot of people watch Purdue, Maryland and Rutgers.

As one prominent media rights source told On3 in the fall: “The networks right now will pay you whatever you need them to pay you for top inventory. What they don’t want to do anymore is pay $9 million a game for Michigan-Ohio State and also pay $9 million a game for Rutgers-Maryland. … Everyone thinks, ‘Oh, my God, the SEC has this magic.’ But you don’t realize how pedestrian the [viewership] numbers are when the big schools aren’t involved. When you say how about fill-in-the-blank team versus someone other than Alabama, Georgia, Florida, Auburn and LSU? The numbers fall off a cliff.”

So when does disparity turn into discontent? When do blue bloods say they want to be grouped only with other heavyweights to maximize revenues? As direct-to-consumer platforms become more ubiquitous, the question will amplify. McMillen, who represents the interests of all 131 FBS athletic directors, was extremely candid on this issue: “The Ohio States and Michigans will say, ‘Wait a minute. People want to watch our games and we are the ones driving the eyeballs here. Maryland and those schools, when they play, no one watches them play on TV. Why are we sharing conference revenue the same way?’ … Ohio State will say, ‘Yeah, we earned our $100 million. Did those guys over there earn it?’ You could have schools that say, ‘Look, this is not fair. We want our own league because we are the ones driving these revenues.’ You could even have break-ups within conferences.”

4. Conferences will gain full autonomy to create rules

Everything points toward decentralizing governance from the NCAA office and giving individual conferences autonomy to create their own business-side rules. This could include, among other things, increasing scholarship allotments, the sizes of coaching staffs and resources spent on revenue-producing athletes. The bounds, conceivably, are only limited by the imagination of conference stakeholders.

McMillen believes there is a striking disconnect between athletic directors and the 21-person Transformation Committee’s movement toward this new structure. In a recent LEAD1 survey of FBS ADs, only 34 percent of them agreed or strongly agreed that conferences should be granted full autonomy to create their own rules. Some leagues, in revenue sports, operate almost as semi-pro operations; others have a more direct connection with the higher education environment. The ability to create their own “rules of engagement,” as McMillen termed it, only will exacerbate the chasms that exist among conferences.

At the top level, as strategies become even more football- and basketball-centric, the casualty could be some Olympic sports. McMillen wonders how this Darwinian approach will play for a national enterprise: “The idea of devolving to [conference] competitors is very complicated and could get very messy. The question is how do you have a national enterprise if every conference is doing something different? That’s the real question. And the NCAA can’t act because of antitrust reasons. So it’s either Congress gives them antitrust cover to do something national, or we live with a very decentralized environment.”

There is recent history of every conference doing their own thing. It occurred during the summer of 2020, as leagues navigated return-to-play decisions in the heart of the pandemic. “That,” McMillen said, “didn’t work so well.”

Emmert set a low bar

That brings us back to Emmert, who could not have been more out of touch if he tried. In just one example, I asked Emmert in a 2013 news conference to characterize his level of concern about third-party influences – boosters and agents – compromising the college eligibility of elite recruits before they even get to campus. He scoffed at the question.

That was a curious reaction considering his own enforcement staff had told me that the eligibility of at least 50 percent of elite men’s basketball players typically is compromised by third-party influences before they enter college. Consider that a few years later, the FBI would expose the underbelly of college basketball, an underground economy rife with money-funneling schemes and middlemen that the media had written about for years.

The NCAA needs a president acutely aware of the most pressing issues facing the industry. Problem is, it is a job opening with an unknown job description. Much more clarity is needed – clarity on the future role of the NCAA and especially on the four big-picture issues confronting college athletics.

The college sports landscape is messy and bound to get messier, and those four issues will shape the contours of the future collegiate model. And not one involves a booster buying a five-star prospect a Lamborghini.