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The Confidential

The ACC Sports Blog

It’s Time for Congress to Act: Tax NCAA Sports Revenue

Things have gotten a bit crazy in college sports.  The Confidential understands Utah, TCU, and Boise State changing conferences to get a seat at the table.  The Confidential understands West Virginia, Syracuse, Rutgers, Pitt, Colorado, and Nebraska being so sufficiently worried about the future of their conference (at those points in time) to make a move.  The Confidential does not understand Texas A&M and Missouri giving up on the Big XII to go to the SEC, but apparently it was frustration with Texas more than $$$.  But Maryland’s defection to the B1G will show that College Athletics is so ridiculously money-focused (rather than focused on anything non-monetary) that Congress needs to remove the tax-exempt status of Universities.  This is just getting out-of-hand.

The B1G wants Maryland for money, not because it wants a middling basketball program and downtrodden football program.  Maryland wants the B1G for the money, not because it does not have a seat at the table.  Maryland has had a seat at the table for its recent existence–it just has not done much with its seat at that table.  And nobody was threatening to take it away.

Fans of the B1G who care about money first are happy.  Fans of the B1G who care about football or basketball are “meh” at best.  Fans of Maryland who want to see their football and basketball teams succeed are “meh.”  Fans of Maryland who care about money first are happy.  A handful of fans borrow Florida State’s anti-Carolina paranoia, but this is a money move.

Nay, this is ONLY about $$$.

The money in college sports has gotten too out-of-hand for anyone to control it.  How can Maryland’s leadership turn down an extra $10M/year?

The time has come for Congress to step in and give the Universities a choice: go back to being at least somewhat amateur or expect to be taxed.  If the NCAA schools want to equally distribute money and access, then they can continue to operate as a tax-exempt organization.  If they want to set up many levels of tiers, with an increasingly smaller collection of “haves” than “have nots,” then welcome to the business world.

Is it fair to penalize Ohio State and Texas for generating so much revenue?  No.  But it is fair to penalize them for pretending to be a tax-exempt organization while doing so.  You want to get paid like the pros, start paying taxes like the pros.  If you want to make decisions based on how quickly they can get you from $27M to $30M/year, expect to be treated like a business that thinks the same way.

There are many who are too glad to be “haves” to care about this.  But the time will come when that will change too.  Sooner or later, Michigan and Ohio State will begin to resent paying a fair share to Purdue and Minnesota.  Florida will get tired of paying Mississippi.  Washington State and Iowa State?  And then it will get more focused yet–as the basketball schools get cast aside because the money is not there… see ya Kentucky, Duke, Kansas, Indiana.  When you have a system with “haves” and “have nots,” the inevitable course of action is that the “haves” become smaller.

We are about to go from 6 conferences of “haves” to 5 conferences of “haves” to 4 conferences of “haves.”  If Texas leaves the Big XII for a sweetheart deal… how long until there are 3 conferences of “haves.”

None of this sounds like amateurism or true academia.  It sounds like business.

Which is fine, of course.  But prepare to be taxed.

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6 thoughts on “It’s Time for Congress to Act: Tax NCAA Sports Revenue

  1. RaLenient on said:

    Another post from the master of contradictory logic. One post says the ACC should cow tow to FSU — the conference’s only “have”. The next post denigrates the “haves”. Make up your mind. What the NCAA ought to do is expel colleges like UNC that repeatedly condone academic fraud to further their athletic departments’ on field success and bottom line.

    • How is it contrary logic? Article I: the system in place requires everyone to only look out for money. People have to act within the current system. Article II–why the system should change. Or perhaps how it could. No need to make up my mind.

  2. Great post, completely agree. Let the academic side by tax exempt but fully tax any donations to athletics. There is no “public good” from having a school build yet another indoor football facility that 100 out of 50,000 students use.

  3. dacuseman on said:

    I have held this opinion for quite some time now. Glad to have some company.

  4. dacuseman on said:

    And for the record, I have no faith in the prospects of UM leaving. A 50 million dollar pill is far too big for a cash strapped sports program to pay. Can’t imagine how they could justify that, but I can imagine the furor it would cause when other university services “go away”. But, now we all know why UM voted against the exit fee raise. Good job Swafford! Proaction good. Reaction, too late.

  5. Pingback: The Big 10 Universities: Integrity for Sale Long Before the Big Ten Network | ATLANTIC COAST CONFIDENTIAL

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