WASHINGTON — On Dec. 5, NCAA president Charlie Baker unveiled a somewhat radical proposal to modernize the college athletics model in an unprecedented way, recommending direct pay to athletes and the creation of a new subdivision.
The college athletics world reacted to Project DI in a variety of ways. While a surprise to many, it was mostly met with fanfare for its progressive and bold approach. But some questioned both its rollout — few knew the intimate details — and its sustainability as a long-term solution for the industry’s primary issue: how to better compensate college athletes.
Nearly two months after Project DI’s grand reveal, some of the targets at the center of the proposal — schools in the Power Five or, better yet, Power Two — are not in support of the plan. There is disagreement on the proposal’s implementation; discord about the NCAA’s future in general; growing doubts around congressional action, a necessary component to the proposal; and, most notably, further discussion of NCAA secession from schools residing at the highest level of the sport.
Amidst it all, in one of the most challenging times in college athletics history, the most powerful executives in the sport — the Power Five commissioners — gather this week in the nation’s capital. They are scheduled to meet on Thursday with Baker in a gathering, perhaps, to further explore their differences and chart a course — together or apart? — toward rectifying the various unsolved issues in the industry.
As the football offseason arrives, college sports stands at the most significant inflection point in its more than 100 years of existence.
Mounting legal challenges, some with billion-dollar price tags, threaten to bankrupt the sport. An unruly transfer portal and NIL landscape send football and basketball rosters into a tizzy. The tether between major college athletics and higher education continues to wear thin.
Further complicating matters, college athletics’ existence, as we know it, hinges on a governing body even slower than its own: Congress.
Meanwhile, the industry’s own leaders, originating from differing geographic and cultural footprints with wide variation in resources, struggle to find consensus — both among themselves and with the 117-year-old association that presides over them.
All the while, as commissioners and Baker are scheduled to meet, the legal challenges against the NCAA and conferences provide leaders with a ticking clock.
Said Jere Morehead, the president of Georgia and chair of the Division I Board of Directors: “We’re running out of time.”
What is wrong with Project DI?
Nothing, if you ask many of those in the NCAA’s “95%,” as Baker likes to refer to them.
Those in Division III, Division II and many in Division I support a proposal that draws a more official line between the haves and have-nots of the NCAA’s three-division, 97-conference organization. Despite some anxiety, even those within the ranks of the FCS and lower-level FBS (Group of Five) are realistic enough to understand that the model only recognizes the growing gap between them and the football elites, and it incorporates a framework around it.
However, at the Power Five level, there is pushback, especially from those in the Big Ten and SEC. Over the last several weeks, Baker has met with athletic directors from three of the five major conferences about Project DI. Pac-12 athletic directors are not routinely meeting, and Baker has not met with those from the SEC, a conference whose school administrators have privately been critical of the proposal.
Meetings with the ACC and Big 12 were described as banal compared to the meeting held with the Big Ten. Baker’s hour-long in-person meeting with Big Ten administrators last week in Chicago turned into a proverbial airing of grievances about the plan itself.
At its heart, Project DI is about deregulation. It cedes control of impactful decisions, such as athlete compensation, scholarship limits and roster spots, to the high-revenue producing schools.
The proposal comes in two parts.
(1) It permits DI schools to strike NIL deals directly with their athletes and offers athletes uncapped “educationally related enhancements.” That part of the proposal is on a sort-of fast track. The DI Council is expected to build a framework around the concept with recommendations due to the Board of Directors in April with potential adoption in August.
(2) It creates a new subdivision of FBS, meant for the highest revenue-producing athletic departments, where these schools control rule and policy-making. There is an entry fee: Schools in the new subdivision would be required to distribute at least $30,000 per athlete for half of a school’s athletes while abiding by Title IX. Depending on the size of a school’s athletic department, that figure ranges from $5 million to $15 million annually.
Gripes over the proposal range widely, according to conversations that several administrators held with Yahoo Sports over the last month, at the national championship site in Houston and NCAA convention in Phoenix.
In a way, the NCAA’s own proposal strips away more of its own authority, which, ironically, opens up the organization to questions of its own existence from those in the major conferences: Can’t we enforce our own rules and operate our own championships?
But some take other issues with the proposal.
• There is no cap on any of the compensation avenues to athletes: the NIL payments, educationally related enhancements and subdivision toll. College stakeholders at the highest level — both coaches and administrators alike — are seeking a more regulated system similar to professional sports, which have salary caps and contracts.
• In Baker’s proposal, Title IX is used as a way to regulate direct pay to athletes. A 51-year-old federal law, Title IX requires educational programs receiving federal dollars to provide equal opportunities to women and men students. While the law has produced a robust and successful women’s athletic movement in the United States, it was meant to be applied in an amateurism model. Applying Title IX in a professionalized model means that schools would be compensating a football player, whose sport produces millions in revenue, the same as a women’s player, whose sport loses millions.
• The proposal may slow but will not completely end booster-led NIL collectives, which MAC commissioner Jon Steinbrecher says is the wish of “most” athletic directors. “They’d like to see collectives go away,” he said from Phoenix. But at many schools, collectives will remain as a third-party entity that (1) does not have to abide by Title IX and (2) can offer athletes extra compensation onto their school pay, most believe. “In my view, (collectives) will likely still exist regardless of how institutions are compensating student-athletes or not,” said Florida deputy AD Lynda Tealer, an expert on NIL matters who’s helped lead the NCAA NIL working group now for years.
For these reasons, the proposal, while radical in the historic context of an amateur organization, does not take a big enough leap into a more regulated and professionalized system such as revenue sharing, many administrators say.
There is also one other hurdle with the proposal: It needs help from Congress.
What is Congress doing?
At the latest congressional hearing on NIL last week, Rep. Diana Harshbarger (R-Tenn.) glared toward Baker, a witness at the event.
“This is not a place you want to come for help,” she deadpanned.
It was the latest ominous sign that congressional action this year remains a long shot. The fact that such a statement came from a Republican — the party in which the NCAA’s requests most align — is doubly problematic.
After the hearing, things got no better when Rep. Lori Trahan (D-Mass.) announced to reporters that the NCAA’s two most important requests of a congressional bill — antitrust protection and employment exemption — would not happen in this Congress.
In order for Project DI to work, Baker acknowledges the necessary help from Congress, an entity in which the NCAA has been lobbying for five years to no avail. Lawmakers would need to create a “special status,” Baker said, for college athletes to be deemed as students and not employees — an important piece given the ongoing legal cases that could soon deem athletes as employees.
The track record doesn’t exude confidence in a bill’s adoption by the time the presidential election cycle really heats up this spring. Since 2020, there have been 11 congressional hearings and more than a half-dozen introduced bills. No single piece of legislation has even reached the floor of either chamber for debate, let alone a vote.
“We are at a critical juncture for Congress to do some things, and if having this conversation about a (Project DI) helps to get us to the finish line, that’s important,” Morehead said earlier this month. “But now more than ever, we’ve got to have some congressional action. That is critically important right now.”
There is some optimism if you look hard enough. Sen. Dick Durbin (D-Ill.), for instance, released a positive statement of support about Baker’s proposal in December. In fact, Baker is scheduled to meet with Durbin this week in D.C. — an important step as Durbin chairs the Senate Judiciary Committee, which would control any college legislation as it relates to antitrust protection.
Also in the Senate, for several months now, Sens. Ted Cruz (R-Texas) and Cory Booker (D-NJ) have been negotiating to reach a compromise on a bill. However, those talks have been pushed aside by more prominent issues, such as immigration, the budget and the war in Ukraine.
Some have questioned why Baker is even bothering with a plan that relies on congressional action.
“The one thing I’m pretty sure about this is, if we don’t do anything, nothing will happen,” he said. “My view is to do things.”
If not Project DI, then what?
Jeffrey Kessler, the 69-year-old New York sports attorney, is the man who led a team of lawyers in 2021 to the landmark Supreme Court victory over the NCAA in the Alston antitrust case.
Kessler is presiding over two more legal challenges against the NCAA and power conferences, most notably the House v. NCAA case. House seeks the elimination of the NCAA’s NIL rules and retroactive NIL payments to athletes that could exceed $3 billion. One SEC president, Mississippi State’s Mark Keenum, describes its outcome as financially “catastrophic” for the industry.
Kessler boils down the options before college leaders into two avenues.
“I think we are on a path to dramatic change in college sports in terms of what happens to these revenues that are generated,” he said in an interview with Yahoo Sports. “The only question is whether or not the changes will come slowly and painfully as a result of decision after decision of the NCAA losing in court. Or whether they should proactively try to settle these cases and agree on a system that would be fair to the athletes.”
Many around college sports view the House case as the final wedge between the haves and have-nots. Only the high end of college athletic programs can afford to (1) contribute to the settlement (as much as $10-15 million per school) and (2) operate within a system that is deemed “fair” enough to be part of a settlement.
At a Knight Commission meeting in November, Maryland athletic director Damon Evans made reference to the Power Five leagues sharing College Football Playoff and NCAA tournament revenues with the other schools — those that cannot afford the aforementioned settlement requirements.
“If we are going to pay the freight for House,” Evans said, “then why are we sharing the revenue to that extent?”
In the same meeting, Evans echoed what many athletic administrators have privately expected for years: Within five years, and perhaps much sooner, the power conferences will operate under a new governance structure that features an athlete revenue-sharing model.
There is a belief by some that Project DI does not go far enough to be accepted in settlement negotiations and that only a regulated revenue-sharing model is the move. In a settlement, such a model could be codified by the judge and, perhaps, eventually protected by Congress from what college leaders say is the next threat on their industry: athletes being deemed employees.
There exists at least three routes in which college athletes could be deemed employees over the coming months: the Johnson case in Pennsylvania seeks minimum wage; and two complaints filed with the National Labor Relations Board could grant athletes the ability to unionize and earn salaries.
All of the legal challenges are attached to a clock, though appeals could delay any final rulings. The House case is set to go to trial next January. One of the NLRB cases is playing out now in California, and Pennsylvania judges could rule on the Johnson case at any point.
At last week’s congressional hearing, Baker implored lawmakers to adopt legislation that included an employment exemption for college athletes. At least two-thirds of sports programs across all NCAA divisions would be eliminated if athletes were ruled as employees, he told them.
Minutes later, after the hearing’s conclusion, Trahan stepped into a circle of reporters to deliver a message to the NCAA and its schools: Prepare for employment.
“Shame on them if they aren’t because any good leader does a lot of scenario-planning and that is a scenario where the courts might actually deem athletes employees,” she said.
What are the SEC and Big Ten up to?
It’s no surprise that SEC and Big Ten administrators have expressed, privately and publicly, the most qualms over Baker’s proposal.
Officials from the two conferences hold more authority than any other league. Next year, the two conferences will encompass 34 schools in 26 different states. In college athletics’ only real profit-turning sport, those teams have won 61 AP football national championships. All other leagues combined have won 19 (not including Notre Dame). From a revenue perspective, schools in the Big Ten and SEC will soon earn at least $70 million annually in television distribution — at least $25 million more than the next conference’s media rights deal.
There is potentially a pathway to an exit. The 10 FBS leagues and Notre Dame are bound to the CFP television agreement for just two more years, and though they are in negotiations to extend that agreement with ESPN, such an extension has not been struck.
In no secret, the two commissioners of the behemoths, SEC’s Greg Sankey and Big Ten’s Tony Petitti, have developed a close relationship, communicate regularly and hold the power to steer college football’s future.
Its direction is quite clear. Both Sankey and Petitti have expressed an intent to both accelerate NCAA governance and condense the amount of schools operating under a single umbrella. “How do you take larger groups and make them smaller to drive forward?” Petitti asked in an interview last year with Yahoo Sports.
Although administrators from the two leagues have not jointly met, each of them have separately held serious discussions about models for the future of the industry. In fact, SEC athletic directors met in person earlier this month in a roundtable discussion of sorts about the topic.
“Everything is on the table,” said one. “That includes a breakaway.”
So, amid the legal challenges, threats of secession, compensation proposals, congressional hearings, NIL investigations and transfer portal movement, the industry’s most powerful people gather in the nation’s capital this week.
Is such a meeting the beginning of the end? Or is it the start of consensus?
“It’s about as unsettled as I’ve ever seen it,” said one high-ranking athletic director. “And maybe that’s a good thing, because it’s time to change.”