The NCAA is pitching a new set of rules that would allow some colleges with the highest-earning sports programs to directly pay student-athletes for the first time ever.

In a letter sent Tuesday to more than 350 Division I schools, NCAA President Charlie Baker proposed creating a new tier of Division I collegiate sports in which schools would pay millions of dollars into a trust fund that would offer half of their athletes at least $30,000 per year. The proposal would also allow schools to enter into name, image and likeness (NIL) deals directly with their athletes.

"The growing financial gap between the highest resourced colleges and universities and other schools in Division I has created a new series of challenges," Baker stated in the letter. "The challenges are competitive as well as financial and are complicated further by the intersection of name, image and likeness opportunities for student-athletes and the arrival of the Transfer Portal."

Baker noted that Division I athletic budgets range anywhere from $5 million to $250 million annually. And while 59 schools spend over $100 million annually and another 32 spend over $50 million annually, 259 Division I schools spend less than $50 million each year on their athletic programs.   

Under his proposal, Baker says schools with "the most financial resources and the biggest brands" would be able to form a new subdivision that sets its own rules on "scholarship commitment and roster size, recruitment, transfers or NIL" — while still competing against the rest of Division I. He added that it would also help with gender equity across sports because the potential new trust fund would be required to follow Title IX law and distribute equal amounts of money to both male and female athletes. 

Baker's letter doesn't define which schools would fall into the top-earning subdivision, but said the framework of the proposal would leave the decision to join up to the schools. 

Baker, who took over as president of the NCAA in March, has repeatedly said that he thinks the top-earning college programs operate on a completely different field than the vast majority of other schools.

"[This proposal] kick-starts a long-overdue conversation among the membership that focuses on the differences that exist between schools, conferences and divisions and how to create more permissive and flexible rules across the NCAA that put student-athletes first," Baker said. "Colleges and universities need to be more flexible, and the NCAA needs to be more flexible, too." 

It remains unclear what the time frame is for the proposal moving forward, but the NCAA rule change process typically takes a year or longer and schools would have to vote on whether to adopt the changes. Nonetheless, it's expected to be a major topic at the annual NCAA convention in Phoenix this coming January.

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