NCAA takes next step on its bold college sports reform proposal

The traditionally slow-moving NCAA is swiftly moving the ball forward on a key item within its bold reform proposal that caught many stakeholders off guard early last month.

The NCAA Division I Board of Directors on Thursday formally tasked the Division I Council with working on specific recommendations related to the progressive plan, marking an important next step in the association’s legislative process.

The move, made during the NCAA’s annual convention in Phoenix, signals that first-year President Charlie Baker and industry leaders want to try to fast-track legislation specifically related to moving NIL activity under the umbrella of schools, a significant change from the current model that consists of third-party, donor-funded collectives. This legislation would enable schools to enter into NIL deals with athletes.

The fact that they are moving this quickly on the legislation reflects the urgency that is palpable throughout the landscape amid mounting legal threats and potentially seismic change on the horizon.

“I can’t say where it [this process] is going to go or where it is going to end,” Board Chair Jere Morehead told The Athletic at the convention.

Some stakeholders have expressed pushback to On3 regarding the NIL element in the proposal, particularly if their schools are outside a Power Five conference and are already stretched thin with staff and resources. But interviews with athletic directors and others suggest many, if not most Power Five schools welcome it.

“The train is heading in that direction,” one prominent source told On3. “It’s widely welcomed in the P5. I’m somewhat optimistic.”

NCAA’s Baker applauded for unveiling bold proposal

The NIL piece of the proposal is certainly lower hanging fruit when compared with trying to move forward the concept of a new subdivision for like-minded, highly resourced schools to craft their own policies. A potential new subdivision, which has sparked a myriad of questions, will also be explored in the coming months, as will the concept of schools directly paying athletes at least $30,000 annually through a trust fund.

Baker has been widely applauded for introducing the forward-thinking plan, even as an untold number 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. 

This much is clear, Baker has already accomplished what he set out to do with his Dec. 5 memo – which blindsided many industry leaders, including conference commissioners. And that is to ignite robust dialogue and debate throughout the college sports ecosystem. 

“We have received excellent feedback on these proposals from student-athletes and all of you [stakeholders],” Baker said during a speech at the convention. “Some may quibble with the details, but they are glad we are finally talking about the elephant in the room.”

Since arriving in the spring, Baker has closely assessed the NCAA, long defined as a reactive, rigid association that moves on anything with glacier-like speed. He has made clear that the NCAA must become more nimble, and less bureaucratic. It has to not only evolve, he has told On3, but evolution needs to keep the interests of student-athletes top of mind.

“I found [the proposal] to be really refreshing,” Christy Hedgpeth, president of Playfly Sports Properties and a former Stanford basketball player, told On3 on Wednesday, adding that she embraces the move to fast-track the NIL in-house element. “I found it to be productive in the sense that it was him [Baker] saying, ‘Look, we don’t have all the answers. But we are eyes wide open about the reality. And we want to find solutions that make sense.'”

NCAA continues to pursue federal NIL reform bill

Thursday’s move sets the stage for the council to 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 had 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. But Thursday’s move could potentially accelerate the process for the NIL-focused element.

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, which is weighing whether athletes should be deemed university employees.

As discussions ramp up this week in Phoenix related to Baker’s proposal, much focus is on moving NIL activities in-house and fast-tracking that legislation. 

“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.” 

NIL in-house would come with benefits, challenges

Shifting NIL activities under schools’ umbrellas would be a radical departure from the current model consisting of collectives. More than 200 exist nationwide that distribute money to athletes, increasingly for recruiting and retention purposes and mostly to male athletes.

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. 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.

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.