Tennessee creating nonprofit NIL fund to potentially pay athlete salaries

Tennessee is poised to take a big step in the ever-changing NIL space. The university approved plans to create a nonprofit foundation that could turn into a fund to pay salaries, according to the Knoxville News-Sentinel.

UT’s Board of Trustees approved the plan Friday, which would create the foundation to improve the athletics department’s business operation efficiency. It would quickly turn into a de facto salary fund and get the school ready to join a proposed subdivision. NCAA president Charlie Baker proposed such a move late last year that would allow schools to pay athletes directly through trust funds.

Tennessee is now mobilizing to take those potential next steps.

“It’s really an effort to try to be agile and be ready for the coming changes,” Tennessee chancellor Donde Plowman said, via the Knox News.

News of Tennessee’s decision came after Baker issued the NCAA’s updated NIL guidance, which paused all third-party investigations into alleged violations in light of a judge’s decision in a landmark case in Tennessee. The state’s attorney general, along with Virginia’s AG, filed the suit in light of an NCAA investigation into the Volunteers for alleged recruiting violations.

Judge Clifton L. Corker granted a preliminary injunction in the case Feb. 23. That move opened the door for NIL collectives to communicate with high school players and transfer portal players.

In a memo sent to member schools Friday, obtained by On3, Baker announced the pause on investigations related to NIL infractions. He also said the NCAA’s prohibition of pay-for-play, institutional payments and quid-pro-quo requirements are still in place. January’s adoption of NIL transparency and consumer protection measures will not be impacted and remain on track for Aug. 1.

“In response to this latest order, the Division I Board of Directors directed NCAA enforcement staff to pause and not begin investigations involving third-party participation in NIL-related activities,” Baker wrote. “There will be no penalty for conduct that occurs consistent with the injunction while the injunction is in place. I agree with this decision, while the progress toward long-term solutions is underway and while we await discussions with the attorneys general.

“In circumstances that are less than ideal, this at least gives the membership notice of the board’s direction related to enforcement.”

With the college basketball season winding down – Selection Sunday is just 16 days away – all eyes are now on the transfer portal window for men’s basketball. That will open March 18 after the Selection Show. Then, football players will have a 15-day window at the beginning of April after spring practice.

Pete Nakos contributed to this report.