THE FINAL LEG OF THE NCAA’S AMATEURISM MODEL BUCKLES UNDER THE ASSOCIATION’S YEAR-END PROPOSAL TO MEMBER SCHOOLS

By Christina Stylianou & Gregg E. Clifton

Following a three-year spell of changes in college sports and increased pressure to adapt its policies under the weight of aggressive state legislation and mounting litigation, the NCAA has now issued a proposal that acknowledges the cracks in the NCAA’s longstanding amateurism model. In a multi-page letter to his Division I member schools, NCAA President Charlie Baker noted that intercollegiate athletics is at a crossroads and invites a conversation with its institutions to discuss ways to move forward in this new era in what appears mostly likely to be an effort to preserve the NCAA’s place in and authority over college sports.

In an effort to appeal to the Power 5 schools, Baker proposed major rule changes that, if adopted, would alter a long-enforced belief that prevented schools from providing compensation of a non-academic nature to their student-athletes and allow Division I schools to enter into name, image and likeness agreements directly with their student-athletes. For the first time, it would allow schools to directly pay their athletes in an amount that can exceed the current educational resources limitation. The Baker proposal would also create a new subdivision of Division I schools that would be able to introduce its own set of new rules for recruiting, transfers, roster size and other potential policies. In order to be part of this new subdivision, schools would have to make a serious financial commitment and contribution to a newly established trust of a minimum of $30,000 annually to half of their student-athletes..

Baker justified his proposal by stating, “It’s time for us – the NCAA – to offer our own forward-looking framework.”

In his letter to his school members, Baker openly acknowledges the wide disparity in income and resources across the spectrum of Division I institutions. According to the NCAA:

• 59 Division I schools spend over $100 million annually on their athletics programs.
• 32 Division I schools spend between $50 million and $100 million.
• 115 Division I schools spend between $25 million and $50 million.
• 144 Division I schools spend less than $25 million.

He adds that, on average, only 1.8% of the athletics budget is covered by student fees at Power 5 conference schools, while that percentage climbs to 14-18% at other Division I schools. By comparison, 98% of Division II and III schools spend less than $20 million annually on their athletics programs and most of these universities do not make money on those programs.

Under this economic milieu, Pres. Baker highlights the need for change and adaptation in order for each institution to better support its student-athletes commensurate with its financial reality. In that spirit and in borrowing heavily from previously proposed and enacted state legislation (California’s College Athlete Protection Act in particular, among others), the NCAA would:

• Require all Division I schools to guarantee scholarships offered to student-athletes, irrespective of whether the athletes play their sport.
• Require Division I schools to provide up to 10 years of ongoing tuition assistance to scholarship athletes until they complete their degree.
• Require Division I schools to provide mental health services to student-athletes.
• Require access to student-athletes in all three Divisions to a nationwide injury insurance program that would provide two years of primary or secondary health insurance coverage if the athlete is injured playing a sport for their school and are still in active treatment when they graduate or when eligibility has expired.

In addition to the above requirements, which are already being implemented beginning next year, the NCAA further proposes (1) “mak[ing] it possible for all Division I colleges and universities to offer student-athletes any level of enhanced educational benefits they deem appropriate” and (2) that “rules should change for any Division I school, at their choice, to enter into name, image and likeness licensing opportunities with their student-athletes.”

The letter does not expound upon what type of “enhanced educational benefits” a school might offer and does not speak to whether such enhanced benefits could conflict with prior NCAA guidance, including directives that required certain educational and support benefits to be made available to the student body at large and not just to student-athletes. The letter also does not contemplate any framework for NIL licensing opportunities with a school’s own athletes. For instance, it is not clear whether the NCAA expects that a Power 5 conference school will need to enter NIL agreements with its football players in order to also enter agreements to broadcast games or whether this proposal is more narrowly focused to athlete endorsements under the school’s banner. The letter also does not explicitly state that the proposed change would alter the status of student-athletes so as to name them employees of their universities, conferences, and/or the NCAA. However, in permitting schools to directly enter NIL agreements with their athletes, this gap between student and employee (if it still exists) significantly narrows with this new permission.

The letter also seeks to bolster support to athletes, while taking into account the financial disparity among Division I schools, by requiring institutions with the “highest resources” to invest in their athletes as follows:

• Subject to Title IX, high-income universities would need to invest at least $30,000 per year into an enhanced educational trust fund for at least half of the institution’s eligible student-athletes.
• These schools would also need to commit to work with the NCAA and other high- income universities to create rules and policies that could address scholarship commitment and roster size, recruitment, transfers, or NIL. These rules would not apply to other Division I schools.

The letter does not explain which student-athletes would be deemed “eligible” for purposes of accessing the trust fund, nor why the fund would apply to “at least half” of that group, as opposed to any other percentage or all. It does not explain how this requirement would work, what it is intended to do, when the trust fund would pay out, or why the amount is set at “at least $30,000.” Notably, however, the letter reiterates the NCAA’s intention to regulate areas like recruitment, transfers, and NIL, but stops short of revealing what types of new policies it has in mind.

            Interestingly, Baker uses this opportunity to express his intent or desire to apply the proposed changes in part to lift up female athletes and women’s sports to better compare with the advantages and commercial benefits enjoyed by men’s sports. And he communicates an interest in bringing Title IX into the fold on any new permissions – a concern shared by many as student-athletes have gained new rights over the last few years. Baker also acknowledges throughout the letter that one set of rules for all Division I schools no longer makes sense and highlights the NCAA’s interest in affording opportunities to student-athletes that better match the scale and operating model of their respective universities.

            While this recent communication by the NCAA does not yet establish a concrete path forward, it demonstrates the NCAA’s recognition that the time for active change has long since come and attempts to start the conversation with its member schools in order to preserve the Association’s model and governance, albeit in a new form. Though it does not appear from the letter that the NCAA has given up its efforts to lobby for federal legislation, it does seem to recognize that the Association cannot continue to await a hail Mary from Congress without itself evolving its methods and taking charge of its member schools.