Focus squarely on reform proposal during this week's NCAA convention
As the college sports industry continues to digest the NCAA’s potentially groundbreaking reform proposal unveiled early last month, the overarching question hovering over the association’s annual convention this week in Phoenix is how much, if at all, stakeholders can move the ball forward.
While first-year president Charlie Baker has been widely applauded for introducing the forward-thinking plan, a myriad of questions remain surrounding its implementation as well as intended and unintended consequences — and whether Baker can build consensus among a diverse swath of members.
Baker unveiled the proposal on Dec. 5 – blindsiding many industry leaders, including conference commissioners – in large part to ignite robust dialogue and debate related to the key items: allowing schools to enter into NIL deals with athletes; and the creation of a subdivision of like-minded, highly resourced institutions, which would then create their own policies and award student-athletes at least $30,000 annually from a trust fund.
The Division I Board of Directors agenda for the convention – detailed by CBS Sports and confirmed by On3 – lays out a potential timeline for next steps for the proposal in the NCAA’s legislative process, which traditionally moves with glacier-like speed. However, the documents, also reported by Yahoo! Sports, specify the proposal could be bifurcated so items can be “acted on independent of one another.”
That opens the door for stakeholders to potentially fast-track the policy change related to moving NIL activity in-house and under the umbrellas of schools while allowing the more complex subdivision plan – which raises a thicket of complex questions – to follow the traditional legislative process and be assessed over the next year.
NCAA pursues reform amid mounting legal threats
If the Board of Directors this week tasks the NCAA Division I Council with formulating recommendations related to the proposal’s elements, the council can further discuss concepts during its meetings on April 17 and 18. The board is scheduled to meet on April 22, where it could review the council’s recommendations.
The council plans to meet on June 25 and 26, when it could finalize recommendations. Then the board will meet on Aug. 6, when it could potentially act on the council’s recommendations.
Several stakeholders told On3 they expect a year-long process before the adoption of many of the key elements of the proposal, especially the most radical change involving the new subdivision.
The NCAA’s pursuit of its reform plan, of course, is not occurring in a vacuum.
The NCAA unveiled its proposal last month in large part to get the attention of Congress, which the NCAA continues to lobby for a federal reform bill that would include at least limited antitrust protection and codification that student-athletes are not employees. From the association’s standpoint, that is mission-critical because the NCAA faces mounting threats in the courts and from entities such as the National Labor Relations Board.
As discussions ramp up this week in Phoenix related to Baker’s proposal, it remains to be seen if moving NIL activities in-house will be fast-tracked.
“There’s definitely a push for that,” one prominent stakeholder told On3. “Like anything, there’s pros and cons to it. It’s a mixed bag. I see some benefits and also some impediments and issues. It would add some sustainability. But there are some hurdles, such as Title IX.”
Moving NIL activities in-house carries pros, cons
Shifting NIL activities under schools’ umbrellas would be a radical departure from the current model consisting of third-party, donor-funded collectives. More than 200 exist nationwide that distribute money to athletes, increasingly for recruiting and retention purposes.
North Carolina Athletic Director Bubba Cunningham told On3 shortly before the NCAA unveiled its proposal that “universities are not prepared to bring collectives or other elements of NIL in-house. There are too many unanswered questions about employment, compensation, antitrust, Title IX and Title VII that must be considered.”
Opinions are mixed. But there is virtual consensus that the NCAA’s NIL guidance is screaming for more clarity and more simplicity. Consider the view of Mark Keaney, chief revenue officer at Greenfly – which helps more than 500 organizations optimize content and drive revenue for sponsors.
“With the Big Ten, we were going through the NIL rules of engagement for content, which is 78 pages long,” Keaney told On3. “I spent the weekend reading it. I got on the phone with the deputy commissioner and said, ‘I know less now than I did on Friday.’ It’s unbelievable.”
A wide swath of industry leaders have long told On3 that moving NIL activities in-house would have several benefits.
It would address the fatigue of donors, who have been increasingly pulled between donating to collectives for NIL activities and donating to athletic departments for facility upgrades, etc. It would also streamline an athletic department’s fundraising efforts, enabling both parties to row in the same direction. And with the muscle and branding of the university behind it, it could add more credibility to the NIL operation.
Beth Goetz, Iowa’s Interim Athletic Director, told On3 shortly before Baker revealed his proposal that there are a lot of merits specifically to bringing collectives under schools’ umbrellas, though schools would need to be mindful of other implications.
“You want to ensure that just the connectivity and conversation is happening with your external fans and donors that are donating to both,” Goetz said. “Those things now have to happen, they’re forced to happen, in a silo, as opposed to being able to have sort of these conversations that, ‘Hey, this is a part of what we do.’ And, ‘How do you want to support?’ The same thing with our student-athletes. They are engaging with our team. They are engaging with the [Iowa] Swarm [collective] team. Having everything under the same umbrella certainly has its advantages.”
Pittsburgh Athletic Director Heather Lyke told On3 that moving collectives and their activity under schools’ umbrellas would make the model “truly pay-for-play. If it’s really within the organization, then we run it, we figure out the money. We’re responsible 100% for it. I would say if we could agree that we’re going to have the elements of scholarship, cost of attendance, Alston money and NIL. The problem is, it’s the donors’ money, you know what I mean?”
Schools need to be mindful of Title IX
There are potential challenges. Collectives have long distributed the vast majority of their dollars to male athletes. If NIL activities moved under the school umbrella, athletic departments could no longer assert they are not in violation of Title IX because collectives are third-party entities.
As Baker himself referenced in his December memo, if and when schools are permitted to enter into NIL deals with athletes, they will need to do so in accordance with Title IX requirements.
Secondly, several sources said schools would be absorbing heightened liability risk.
“The clear example of that is that collectives help organize a deal with, like the Utah team where their entire team gets cars,” Sean Hughes, co-founder and CEO of Athliance, told On3. “Now, what happens if one of those 18 or 19-year-olds gets a DUI and [hurts] somebody in one of those cars? It’s an extreme example. But there’s very clear-cut liability issues with schools being involved in facilitating those deals.”
During this week’s convention, there are other matters at hand as well. The NCAA is expected to formally approve measures related to consumer protections and NIL transparency, elements that have been in the works since early last summer.
They include a voluntary registry for NIL service providers, disclosures of NIL deals, more standardized contracts and education programs for athletes and NIL entities.
But the focus of those throughout the industry remains squarely on any movement related to Baker’s bold December proposal.