'How will we pay for this?' — College leaders react to NCAA's new subdivision proposal

LAS VEGAS — In a dimly lit bar within the Aria Resort & Casino, some of the power players in college athletics gathered to enjoy a dash of nightlife. Music jammed. Beer flowed. And stories spewed.

Amid it all, a man bellied up to the bar, ordered another round and then wheeled around with a smile. “So,” he blurted, “what are we doing to call this new division? Division Zero?”

A day after NCAA president Charlie Baker introduced a radical change to the Division I athletics model — a new subdivision featuring direct compensation from school to athlete — some of the country’s most powerful leaders buzzed about the proposal from the Sports Business Journal’s annual summit here at the glitzy resort off the Vegas Strip.

Some stewed. Others praised. A few gasped.

Among the conglomeration of opinions here, one certainty has emerged: It’s a new day in college sports.

For so long tethered to its amateurism model, college athletics is in the process of crossing the Rubicon. On the other side is professionalism, or at least a unique version of it. But not everyone can cross the line. Not all are invited into The Club. A fee is required, according to Baker’s proposal: a minimum of $30,000 annually per athlete for half of a school’s countable athletes. That’s the minimum. There is no cap, but Title IX must be followed, guaranteeing 50% of funds to women athletes.

For the smallest athletic departments, that’s around $5 million to $7 million per year. For the largest departments, it’s at least $12 million and as much as $15 million. Additionally, schools would be permitted to strike NIL deals with their own athletes.

Despite the millions flowing into the college game — a reminder that the Big Ten last year signed a $1 billion-a-year deal — the figures created sticker shock for many.

“Where are we going to get that money?” asks one college coach.

“How will we pay for this?” an athletic director wonders aloud.

Kept mostly secret, Baker’s proposal was a “grenade” dropped on the college landscape, as one administrator described. It’s an old political tactic, some here say, to spark serious conversation and lead to expedited action on an issue.

The grenade is dropped. The explosion is erupting. The fire is spreading. As soon as the smoke clears, a finished product will emerge — at least, Baker hopes so. The quicker, he says, the better.

On a raised stage at the SBJ event Wednesday, he preached “urgent patience” and talked of a more accelerated process to approving at least a version of his proposed model.

Around the college athletics space, people were sent scrambling Tuesday morning as the memo hit their inboxes. Some university boards held emergency meetings to discuss the matter. School and conference general counsels combed over the memo with their best microscopes. NIL collectives gathered on a call to discuss its potential impact.

Everyone, Baker suggested, needs to chill. Take a deep breath. Calm down. His proposal is “what we call a place to start,” he said.

Serious conversations around the matter will start in earnest — as in Thursday, during a scheduled call with the Division I Board of Directors, said Baylor president Linda Livingstone, one of the most powerful figures in the industry who appeared at Wednesday's function.

Ultimately, leaders need to create actual legislation, socialize such legislation and get the requisite number of votes from the full Division I membership to pass the legislation. It is unlikely that such a move could happen by or at the NCAA convention next month in Phoenix, Livingtone said.

Expect changes to the proposal, tweaks and adjustments, from the feedback that leaders give.

“One of the things is what do you put in broad legislation that might create this new division with some parameters?” Livingstone said. “What do you leave for that division to decide for itself? How much specificity do you provide compared to what was in the original [proposal]? Are there elements that should shift and change?”

While plenty of questions go unanswered about the model, Baker answered a few during his time on the dais Wednesday. In the most important reveal, the NCAA needs congressional assistance to make his proposal work.

Baker is asking for a “little” antitrust exemption, as well as protection from college athletes being deemed employees. Why drop his proposal now without congressional legislation needed to codify such?

Maybe it’s a way to show Congress how serious the NCAA is about change. Or maybe Congress is well on its way to passing that legislation.

“Does he know something we don’t?” one athletic director asked. “If not, we are going to get sued again.”

To be sure, the congressional wheels are turning. Sens. Ted Cruz (R-Texas) and Cory Booker (D-N.J.) and their staffs are making progress on federal legislation, U.S. Senate aides tell Yahoo Sports. There seems to be a compromise on at least one important subject: addressing employment. Discussion continues on granting the association at least a narrow legal protection.

Power Four commissioners visited lawmakers in D.C. last week, and each expressed more optimism over congressional movement than they ever have previously.

Without federal protection, the lawsuits and legal attacks will continue, from senators, attorney generals and state lawmakers who “literally make a federal case” out of NCAA rules, Baker said.

“Part of the reason we are talking to Congress is their ability to codify something,” he said. “Otherwise, you just have everybody suing everybody all the time.”

But if the NCAA needs congressional protection to enact the model, is this proposal legitimate and fair?

NCAA president Charlie Baker (left) unveiled a proposal to school administrators Tuesday that could drastically change college athletics. (REUTERS/Elizabeth Frantz)
NCAA president Charlie Baker (L) unveiled a proposal to school administrators Tuesday that could drastically change college athletics. (REUTERS/Elizabeth Frantz)

There is plenty of pushback to the model, something Baker very much expected and welcomes. Some say he didn’t do enough. Some say he did too much.

The most important figures, from the NCAA’s two behemoth conferences — the SEC and Big Ten — believe that this model is a toe in the water before an inevitable leap into the deep end (full-out athlete revenue-sharing). Baker’s “educational” fund, in which schools deposit athlete funds, is only wading into the shallow end.

Why doesn’t college sports jump in? Why can’t this new division of schools separate their revenue-producing sports, football and basketball, from the higher-education model? Why can’t they *pay* the players, set salary caps or even collectively bargain? Some have asked such questions.

If the Rubicon is to be crossed, go all in, they say. Alas, college athletics crawls, not walks. It jogs, not runs.

The most important questions for fans: Who’s in The Club? Membership in the new division is murky. How many can afford it? That number is probably 30-50 universities, industry experts contend. How many will afford it? Maybe that number is higher, as programs scratch to avoid being left out.

Twice during his speaking engagement Wednesday, Baker mentioned 100 universities. FBS is at 133. The Power Four is at 69.

“Most of the schools in the autonomy conferences will feel that’s something they want to do,” Livingstone said.

Whether only a portion of conferences can join the new league is “subject to discussion,” she said. And whether a conference continues to exist as is without all of its members joining is probably a question for the conference itself and not the NCAA, she added.

A question lingers for many schools, like hers: Where do you get the money?

“We’re going to have to all figure that out,” Livingstone said.

The answer is clear: The money boosters are pooling within NIL collectives would return to the school’s control and be distributed — while complying with Title IX — to athletes. In many ways, one administrator said, Title IX acts as a governor for athletes’ pay. For every dollar a school deposits into Baker’s athlete fund for a male player, a dollar must go to a woman athlete as well.

That’s not a bad thing, Livingstone said. Right now, NIL collectives are not subject to Title IX. By bringing NIL under the control of the university, Title IX can be followed.

So if this model passes as is, what happens to collectives?

“That’s going to be an interesting question,” she said. “You can’t go back and turn the clock back, but if they’d always been subject to Title IX, it would be interesting to see how things might be different than what we’re seeing now.

“If they are subject to Title IX, can you put the genie back in the bottle?” she said.

The country’s most powerful commissioner, the SEC’s Greg Sankey, said he and his presidents were not told specifics of the proposal before its release, something with which he took issue.

“Why wasn't our [board of presidents] brought into this conversation sooner?” he bellowed from the stage Wednesday.

Well, now’s the time. Study it. Tweak it. Adjust it.

But pass it, Baker urges. Pass something.

Big 12 commissioner Brett Yormark said Baker’s proposal takes the “right direction” but needs more conversation. The ACC’s Jim Phillips said it’s “a starting point,” but more feedback is necessary.

It’s time to start talking. And then it’s time to start doing.

Next year at this event, Baker’s goal is to be speaking on this same stage but having “dealt with the elephant in the room,” he said.

It’s time for the new Division I model: Division Zero.