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Big Time College Athletics: The Taxman Cometh

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Over the past 40 years, the concept of a student-athlete representing his college in athletics has been reshaped until their were two new categories:

Revenue sports (football & men's baskeball)

Everything else.

The Congressional Budget Office recently looked at the big-time athletics programs at NCAA institutions and decided that the connection between those programs and their Universities is as weak as Henry James' grip on reality.

The CBO put out a report Wednesday that at least 90 Division I programs, 60 percent to 80 percent of athletic departments’ revenue comes from activities that can be described as commercial—seven to eight times that for the rest of the schools’ activities and programs.

The CBO thinks maybe, just maybe that these collegiate athletic programs have become side businesses for schools and, if they have, then maybe the same preferential tax preferences shouldn't apply to them as to schools in general.

The report says that Congress could alter the tax treatment of collegiate sports programs in several ways, such as limiting the deduction for contributions, limiting the use of tax-exempt bonds, or limiting the exemption from income taxation.

The Congressional Budget Office report does acknowledge that the Universities could get around some of this with a kind of shell game by shifting some of the revenue to other areas of the University budget.

But the report did come out with a couple of ideas to get some federal tax dollars out of the big-time programs.


The CBO took one look at the Coca Cola-Taco Bell-AT&T-HEB-Academy-State Farm Insurance-Time Warner Cable-Dodge Jumbotron at UT and decided that taxing corporate sponsors might be a good idea.

The CBO report suggests that the tax code could be changed to include corporate sponsorships and the revenue from merchandise sales for major universities.

The scream you just heard out of Belmont Hall was from the Collegiate Licensing Department, where UT ranks #1 in the nation in sales of team merchandise.