It’s standard operating procedure. Whenever one attempts to discuss
big-time college sports student-athlete competition in terms of money, they rarely know what they’re talking about.
Cite one database of financial statements and someone inevitable calls Barbara Streisand. They point to another database which shows different data. Someone else argues that you can’t trust either cause they each have different standards. And there’s also the accusation that, well, who cares really? LET’S PLAY SOME FOOTBALL!!!!!
Valid points all. And it helps that even the power brokers in DC have no clue how all these Saturdays are funded. And one such power broker wants some answers!!!
Good luck with that.
Sen. Charles Grassley, R-Iowa, ranking minority member of the Senate Finance Committee, asked the CBO in 2007 to review the economic benefits received from the tax-exempt status of college athletics.
The CBO concluded that removing the major tax preferences would be unlikely to significantly alter the nature of the programs or garner much tax revenue, even if the sports programs were classified for tax purposes as being engaged in unrelated commercial activity.
“As long as athletic departments remained a part of the larger nonprofit or public university, schools would have considerable opportunity to shift revenue, costs, or both between their taxed and untaxed sectors, rendering efforts to tax that unrelated income largely ineffective,” the report concluded.
Grassley said Congress and tax policymakers “need to know more.”
Good thing for the NCAA, he’s a Republican. Otherwise this could be taken seriously.
For those of you interested, here’s the CBO report. One highlight – it refuses to pretend the pro leagues aren’t invested in the commercial success of the … /coughcough .. amateurs.
When athletic departments function primarily as a part of the educational experience for students, they participate in that nonprofit market. However, highly competitive college sports teams with large-capacity stadiums and prime-time television events with advertising are more reasonably considered participants in the market for entertainment. They compete for entertainment spending with many other recreational options, but their most direct competitors are professional sports leagues.
Even though competitive university sports programs enter the same market with tax advantages unavailable to the taxable professional leagues, those leagues have never advocated removing tax preferences for the college programs. One reason may be that college sports tend to reduce costs for professional sports. The two sports with the most active and commercial college programs—football and basketball—are each controlled by a single professional association that spends very little on training players. In many cases, all but the final polishing is done by the colleges while the players maintain amateur, nonpaid status. If players were not trained by colleges, the professional leagues would probably have to pay those players a salary and complete the training themselves.
The horror! Then again, we’re sure all those professional accounting firms appreciate getting some college-trained worker bees at not development cost either.
We’re posting this only because we find it mildly interesting and good comment fodder. That, plus there is absolutely nothing going on right now. Nothing.
/checks countdown clock
September can’t get here fast enough.