NCAA President Charlie Baker proposing new subdivision that will pay athletes via trust fund

NCAA president Charlie Baker on Tuesday sent a letter to Division I members proposing the creation of a new competitive subdivision whose schools would be required to provide significantly greater compensation for their athletes than current association rules allow.

Under Baker’s plan, “within the framework” of Title IX, the federal gender-equity law, schools in this new group would have 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.”

For now, the particulars of how and when athletes would be able to access these payments would be left up to the schools. And the schools not only would be allowed to pay athletes amounts greater than $30,000, they also would be able to provide the payments to more than half of their athletes.

Regardless of how schools would implement this, the concept creates the possibility of a fundamental change in how — and how much — the NCAA allows schools to compensate athletes for participating in their sports.

Baker’s proposal also involves the schools in the new competitive group committing to work together to “create rules that may differ from the rules in place for the rest of Division I. Those rules could include a wide range of policies, such as scholarship commitment and roster size, recruitment, transfers or” policies connected to athletes’ activities making money from their name, image and likeness (NIL).

For example, this could result in schools in the new subdivision having no limits on the number of scholarship awarded in a particular sport or sports. At present, Division I schools are subject to sport-by-sport limits on the number of scholarships they can award, and there are some sports with roster limits.

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Across all of Division I, Baker says the association should change its rules to “make it possible for all Division I colleges and universities to offer student-athletes any level of enhanced educational benefits they deem appropriate. Second, 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 proposal comes a little over nine months after Baker became the NCAA’s president, following a two-term run as governor of Massachusetts. He moved into the job amid a time of considerable tumult within college sports. In addition to multiple legal battles over athlete compensation, the association has been facing growing unrest from the schools that have the greatest revenues and expenses.

Under pressure from antitrust lawsuits and from some members of Congress, athletics administrators at those schools and their conferences have grown increasingly open to the idea of providing greater benefits for athletes as they collect billions of dollars in TV money and have coaches who are being paid millions of dollars annually and tens of millions in buyouts if they get fired.

At the same time, though, the NCAA and its schools are seeking federal legislation that would include protection from antitrust challenges and specify that athletes cannot be deemed to be employees of their schools.

Sen. Chris Murphy, D-Conn., a longtime critic of the NCAA, said in a statement Tuesday night: "It has been a slow and painful process, but the NCAA is finally realizing if they want to survive, business as usual is not an option. Anyone who watches college sports today would tell you these players are anything but amateurs. I have always said the NCAA doesn’t need permission from Congress to do the right thing, and while this proposal might be a small step, it hopefully suggests they’re moving in a positive direction."

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Following the release of Baker's letter, Ohio State athletics director Gene Smith — whose program fields 35 teams and annually has more than $200 million in operating revenues and expenses — wrote on X, the platform formerly known as Twitter: "Thank you, @CharlieBakerMA for your leadership. I am 100% supportive of your efforts. Intercollegiate Athletics needs the proactive and forward thinking you are providing. Thank you for this letter!"

However, for the broader membership within the NCAA’s Division I, there have been concerns about the financial and competitive consequences of this, particularly against the backdrops of Division I rules now allowing athletes to transfer once without having to sit out for a year, as used to be the case, and now allowing athletes to make money from their NIL.

In his letter Tuesday, Baker includes a detailed look at all of these issues and tensions, then states: “Therefore, it is time for us – the NCAA – to offer our own forward-looking framework.”

Baker wrote that he looks forward to gathering reaction and input from school officials and athletes about his proposals, but added, “moving ahead in this direction has several benefits” – and he proceeded to list 10 reasons for going forward with his framework, including:

►Giving “the educational institutions with the most visibility, the most financial resources and the biggest brands an opportunity to choose to operate with a different set of rules that more accurately reflect their scale and their operating model.”

►It provides schools “that are not sure about which direction they should move in an opportunity to do more for their student-athletes than they do now, without necessarily having to perform at the financial levels required to join the [new] subdivision.”

►It would allow other Division I schools “the ability to do whatever might make sense for them and for their student-athletes within a more permissive, more supportive framework for student-athletes than the one they operate in now.”

This article originally appeared on USA TODAY: NCAA proposing paying athletes through trust fund in new subdivision