Written by Ralph D. Russo, AP College Sports Writer.
NCAA President Charlie Baker is proposing the establishment of a new level within Division I that would allow schools with greater athletic resources to provide unlimited educational benefits, form partnerships for name, image, and likeness with athletes, and make direct payments through a trust fund.
On Tuesday, Baker sent a letter to over 350 Division I schools informing them that the gap in resources between the most affluent schools in the Football Bowl Subdivision and other DI members, as well as the numerous Division II and III schools, is giving rise to new obstacles.
Baker stated that the difficulties faced in collegiate sports involve both competition and financial aspects, and are further complicated by the convergence of opportunities for student-athletes to use their name, image, and likeness, as well as the introduction of the Transfer Portal.
According to Baker’s letter, 59 schools in Division I allocate over $100 million each year for their athletics programs. On the other hand, 259 members of Division I spend less than $50 million, with 144 of them spending less than $25 million.
In the 2022-23 school year, UNC disclosed a total of approximately $140 million in revenue for their athletic department. In fiscal year 2023, NC State reported a total athletic department revenue of $105 million.
According to Baker, the contrast between the operations of schools involved in profit-driven college sports and the majority of college sports is hindering efforts to update the college sports system.
“The current situation is just as difficult, as legal institutions and other governmental bodies engage in discussions about potential changes that could significantly harm certain aspects or the entirety of college sports,” he stated.
Baker proposes a division consisting of schools with the most financial resources to dedicate towards their student-athletes. These institutions would be obligated to contribute a minimum of $30,000 per year to an educational fund for at least 50% of their eligible athletes. They would also collaborate with the NCAA and other schools to establish regulations regarding scholarships, team size, recruiting, transfers, and the use of athletes’ names, images, and likenesses.
Baker stated that both colleges and universities, as well as the NCAA, should increase their level of flexibility.
Baker and officials from college sports organizations have been urging Congress to assist the NCAA in creating a federal law that governs the compensation of athletes for their name, image, and likeness agreements.
The NCAA may soon be confronted with legal challenges that could require its members to distribute a portion of the significant profits made from top-level college football and basketball, as well as recognize athletes as employees.
Brian Murphy from WRAL made a contribution to this report.