The College Sports Tax Dodge

A loophole written when collegiate athletics were a trivial business allows billions of dollars in revenue to go untaxed.

Comments: 180

  1. Funny that the GOP routinely slams American colleges and universities as, "liberal wastelands" -- Well it looks like their tax practices [exploiting loopholes] make them about as GOP/Corporate Conservative as you can get! So why all the trash talk? :)

  2. Guess who has to make up for taxes not paid by college sports programs, the NFL, churches, hedge fund carried-interest earners, etc. These are the real moochers and welfare queens.

  3. The article measures the success of athletic departments based on their revenues, ignoring their expenses. According to the NCAA, ESPN, and numerous other sources, only 24 out of the largest 230 programs generated a profit. The principal expenses of each program included tuition payments to the university for scholarship players, payments to the coaching staffs, payments on behalf of the visiting teams, team travel, recruiting, marketing and game expenses. Whether the athletic departments would have to pay taxes if non-exempt is unclear. But they certainly aren't the cash cow that everybody thinks. If you are skeptical, remember that: The Stanford Department of Athletics offers 36 varsity sports and 32 club sports. It offers about 300 athletic scholarships. And about 900 students participate in intercollegiate sports. Furthermore, Stanford employs some 100 coaches and assistants, maintains one million gross feet of indoor facilities and 94 acres of outdoor fields. Among its facilities are the 50,000-seat Stanford Stadium; the 18-hole Stanford Golf Course; the 7,233-seat Maples Pavilion; the 4,000-seat Sunken Diamond; the 17-court Taube Family Tennis Stadium; and the 2,500-seat, four-pool Avery Aquatic Complex.

  4. While your comment might make a case that there's not much to be made by taxing athletic departments (I don't know enough tax law to argue either way) it doesn't address the central question of whether the multibillion-dollar business should be taxed. Are athletic programs of this scale really educational in nature? Most would say they are only in the most technical terms - the scale of the programs are nowhere close to being on the scale of the educational benefit. Furthermore, it's no so much whether the athletic departments themselves would be paying taxes, it's the alumni and myriad corporate sponsors who are dodging most of the taxes with their 'charitable contributions'. And ff course Stanford is always a favorite example, because, as in so many other ways, it's an outlier - academically, athletically, monetarily,... It might be better to look closely at more typical schools.

  5. Why on earth is Stanford maintaining such an enormous sports complex? Why are other universities doing so? What relation does it have to their charter missions: teaching and research? I'd sell all of this stuff off to the professional teams and let THEM run training institutes.

  6. Michjas, did I miss something? Where in your description of Stanford's generous athletic facilities is there an indication of the profit or lack of it? Please provide that information.

  7. The recent tax bill was a good first step to stop this problem. It took some political courage to take on the college boosters. Kudos to those who passed the recent legislation. Non other Congress or President would take on this strong lobby, even a little. Please continue your good works.

  8. Great idea! Have to get the taxes to pay the billionaires from somewhere.

  9. Division 1 college sports is professional sports and should be treated as such. The shame is their exploitation of young athletes who risk life and limb for a 0.01% chance of making pro.

  10. Up to this past year, the NFL was filing as a 501.

  11. Churches also rake in the bucks. It's easy to lump them together as tax holes. I get that churches donate and fund public welfare but a lot of is just entertainment and a local club social activity. Sports are wonderful but the only tax-free aspect should be academic scholarships. They get free many million$ of free stadiums too. It's sports welfare kings that siphon the profits. They are not any different than a rock concert. Pay taxes for the roads to get there and all else.

  12. also, many churches are now political and certainly should be taxed.

  13. "I get that churches donate and fund public welfare but a lot of is just entertainment and a local club social activity." Maybe it is time to find a new church.

  14. As John Oliver so famously demonstrated, anyone can become a 'church' and rake in the money. Look at the Osteens and their 6 million dollar parsonage or check the recent video that was uploaded on line for the discussion between two 'pastors' discussing their very real need for a private jet so they can stand up and talk to God without causing a ruckus. It is all a scam!

  15. A course correction for big time college athletics is long overdue. When ball coaches and AD's get paid in the millions, and the supportive state governments can'f afford to repair roads & bridges, one remedy is in plain view.

  16. In 25 states, the highest-paid state employee is a college football coach.

  17. Of the $3,000 I spent on Notre Dame season tickets, $2,400 is tax-deductible through this year. This scam is going away under the much-maligned Republican tax law. Notre Dame promptly sent season ticket holders a notice that they could prepay the next 10 years, and get the deduction as long as they got the money this year. This seems extremely unfair.

  18. I'm okay with this arrangement. Anyone willing to shell out $30K to prepay for 10 years of Notre Dame football tickets needs counseling - hopefully the money saved through the tax deduction will be put toward that purpose.

  19. hope the IRS reads this...

  20. If just 15 of you obviously well-heeled boosters put your season ticket price together, you could provide a full year's ride for a budding physicist, astronomer, composer, writer, mathematician, or other real student.

  21. When I started college, I remember the football team dolts who attended some of my early morning classes. A lot of them slept and were overly indulged. They definitely were not there to learn. If colleges want sports teams, they should hire players out of high school and create a business. I don't mean to say that all college players are not intelligent. I believe that sports are the opiate of the people. The tax dodge doesn't surprise me at all because it's essential to keeping us distracted from what's really going on.

  22. Football team “dolts”? That is truly a disgraceful generalization. To clarify, there is no basis for suggesting that all college football players are dolts. What if I had said the same about cheerleaders? Would that be ok or are men the only group that can be smeared with generally bigoted statements?

  23. I don't believe the cheerleaders, who may or may not be dolts, are in school hoping to sign outrageously lucrative contracts with professional cheerleading teams, whether they graduate or not. From what I've read, the cleavage, boots, and short skirt teams at pro games are not that well paid. Oh wait, there is the marriage contract they may sign with one of the guys (again, dolt or not) who does go pro. And no, I'm not being sexist, but I may be using a generalization based on statistics.

  24. Eric Obviously, not all football players in college think they are going on to become professional football players after graduation. There are roughly 50 - 100 people a year who go on to get paid for play. Meanwhile, there are thousands who play in college. Not real promising ratio. But, then again, these dolts probably can’t do math. The issue raised in the article is that the schools make a bunch of money from a profitable enterprise, and void taxation. This is made even more profitable because the labor costs for the players (and the cheerleaders, by the way) are zero. That is the point of the article.

  25. When the NCAA went to its new Championship format, several Congressmen and Senators threatened investigations when their home teams were left out. So no, Congress is not about to end this charade. Revenues from athletics at Division I schools should be taxable. Contributions to athletics at Division I schools should not be tax deductible. State supported universities should not participate in Division I athletics. If that means these schools will only offer intramural athletics, fine. That would support the educational mission of actual students, not semipro athletes pretending to be students. If that means there will be only a handful of year end bowl games, fine, most are meaningless and boring. If that means only USC, Notre Dame, the Ivy League, and Stanford play in Division I, fine. Football is bad for the brain anyway!

  26. Is America the only first world country where the professional sports leagues use colleges and universities as free "farm teams?" Boy, ain't we exceptionla!

  27. uh, that's exceptional.

  28. More the rule, I'd say, than an exception.

  29. The obscene amount of money that rolls un-taxed into major university sports programs is an incredible distortion of the word "education". While here in Austin, the UT football coach rakes in a salary of over $5 million dollars a year, thanks in large part to all those hundreds of millions of dollars that flow in tax-free, too many students just barely get by. The university claims the money brought in benefits the entire university, particularly other money-losing sports programs. Yet, there are students in various departments like those of the College of Fine Arts, housed in buildings next to and dwarfed by the gigantic football stadium that's used a handful of times a year, who quite literally have to think twice if their tight personal budgets will allow them to purchase an additional pencil or paper or other basic needed supplies. It's well past time that these gigantic money-machine sports programs either provide far more actual ACADEMIC support to a university's students or be taxed as the profit-making operations they are.

  30. Your description can serve as a microcosm of mainstream American culture. If you can play ball, high school helps you into college. If you want to paint, or write, or play cello, choose the right parents.

  31. Let's also pay the players. There are an awful lot of people getting rich off of their backs. And let them take their degrees after they finish playing. While a few players of the revenue sports manage to squeeze in a good education between full time sports commitments, it's a ridiculous thing to ask.

  32. It's one thing to give a tax break to an outstanding university such as NYU, but extending such a courtesy to Cow Palace State University and other such public institutions is poor use of the public purse. It's clear that the courts have strayed from the Founding Fathers intent. Freedom!!

  33. Heresy! How dare you not bow before the football and rah-rah gods?! Your school must have been a loser! Good to see this sacred cow finally addressed. "Big-time" collegiate sports are a big entertainment industry, well-insulated from a legitimate educational purpose. Next, taking on the religious entertainment industry...

  34. Doesn’t this expectation of special treatment really start when they are kids. Arrogant swaggering bullies can get away with anything with the cost picked up by their victims. Competitive sports are an expensive cancer on primary and secondary education as well.

  35. Non-profit colleges are a giant tax dodge, not just the sports aspect. How could it be that those with multi billion endowments have been able to accumulate billions more through tax exempt investments in otherwise taxable activities like hedge funds and private equity? What about those schools that have hospitals associated with them (e.g., Columbia) and make significant profits from their operations? Columbia University Medical Center has dozens of doctors that make in excess of a million dollars a year. Does that sound like the behavior of a mission based non-profit?

  36. Oh noes people getting rewarded and paid to do good. Let's tax and punish them! Only in modern America...

  37. Dom You miss the point. They can make all the money they want to make. But they shouldn’t also call themselves mission based non-profits. That is a falsehood. They should be taxed on profits. Period.

  38. Did I miss your indictment of how the colleges spend the money?

  39. Where there is research, *actual* research going on to advance the knowledge of how to play fun and safe athletic sports, to create novel ones, and to compete with the monopolist leagues while spending less taxpayer money than they do, I don't mind that being funded or exempted from the tax man. But the big-name NCAA colleges make their prime *goal* to get photogenic superstars ready for the megaleagues' drafts and corrupted by megacorp advertising contracts, and the college executives themselves a giant payday. That shouldn't get a tax break, that should get a massive tax increase, and no tax money should ever go to big-league stadiums. Especially when the stadiums themselves become monopolists owned by monopolist media corps. (See: Cablevision's MSG and how they opposed the West Side Stadium.)

  40. The Republicans have just passed the most unfair and blatantly partisan tax laws in American History that will likely cost us several trillion dollars and we decide to focus on the injustice of not taxing college sports programs? Odd.

  41. I don't think any report has made me feel more unclean than this one. It amounts to a government subsidy for college sports. Clearly, Americans have way too much time on their hands, way too may luxuries, and are way too stupid to let this go on any longer.

  42. you can't tax slavery. maximize educational opportunities ? please...full time college athletes can't barely write their names on a dotted line. who are these people kidding. these colleges should be forced to fork over the money they make back to their admin to be redistributed amongst teaching and research, ie. real educational opportunities, not coaches' salaries in the millions

  43. It is offensive to draw a comparison to slavery. College athletes in revenue producing sports are often exploited but they are not slaves in any sense of the word. They choose to compete voluntary, can stop at any point, and generally get an expensive college scholarship and many other benifits.

  44. I don't know the quality of the college you went to but the student athletes at the one i graduated from were not so stupid.

  45. As a former 11 year full-time college instructor (who left when they switched over to the "adjunct" model), I had many of these athletes in my classes -- and was horrified the first time I encountered one who literally could not complete one single English sentence (he was American-born). I soon came to realize that this was the norm, not an anomaly.

  46. It is astounding that 50-70% of college instructors are now adjuncts with low salaries, no benefits and very little future in academia. My wife taught as an adjunct for five years at the University of Georgia where not only are there no benefits, but the State of Georgia has a scam retirement program called the "Georgia Defined Contribution Plan" that forces adjuncts to contribute to a "retirement plan" without any contribution from the state. The bigger abuse is that the law defining the GDCP is used by the state to not pay social security. Georgia is not alone with its use of adjuncts as cheap labor but I think stands alone in chintzing its contract workers out of social security payments and has saved millions . I say all this as those associated with college athletics are provided what ever they need as it is "so important" for our teams to have world class facilities and to win. This in contrast to the treatment of overworked adjunct, the heart of the academic machine, that has no option other than to quit.

  47. It was interesting to note that during the recent tax bill discussions, Republicans wanted to tax the value of scholarships given to graduate students, but never proposed taxing the value of undergraduate athletic scholarships, especially in the major revenue producing sports of football and basketball.

  48. That's because GOP would rather keep the gladiators than the brains, that's why they want to tax struggling grad students, but won't touch all those extremely well-to-do college sports program.

  49. If you couple this article with the CTE you know why I no longer watch these athletic events on television or support their advertisers. Thanks for the article.

  50. Let us remember, only men's hoops and football make any real money. Let us also remember, only 100 or so colleges have a decent enough program in either sport to really cash in. Most all college sports lose money and most all colleges lose money by having sports of any kind.

  51. I have been frustrated for years by this appalling giveaway to high schools and colleges, particularly in light of the destructive effect of revenue sports on "student"athletes in terms of undermining their academic opportunities and the far reaching physical damage they incur. Revenue sports are not part of the educational mission of a school and thus do not offer a benefit to the public in return for our underwriting of their income. Period. Revenue sports have become a cancer on institutions, warping decision-making and budgeting while making a mockery of academic integrity. Any department which pays its faculty in excess of the university's general faculty compensation scale, which recruits students who would not be otherwise academically eligible for admission, which puts those students' academic requirements subordinate to extracurricular performance, which fails to graduate students at the same rate as the university as a whole, which excludes the student body from using school facilities and/or which invests per-student in excess of school norms should be considered to be a separate, non-academic business and taxed accordingly. Taxpayers should not be forced to underwrite huge donor deductions in pursuit of preferential access, or the bloated facilities and coaching that are the sole province of athletic departments. Moreover, we should not tolerate the degradation of the academic mission of higher education that Big Money has created.

  52. Well-written report. At long last, a grand bargain/compromise may be in the our immediate future. A) IRS-approved Medical Savings Accounts for all college athletes; B) IRS-approved 401K-like Accounts for all college athletes; C) fully-funded scholarships for post-graduate studies for all college athletes who receive undergradute degrees. These to be funded by revenues otherwise paid as the "unpaid" taxes listed above. In addition, athletes are granted the freedoms to i) legal and business representation; ii) sign national, regional, and/or local $ deals for their likeness - real or electronic; iii) transfe tor the college of their choice at any time. This will level the playing field by the 2019 - 2020 academic year.

  53. If shame could be manufactured and sold for profit, today's republican party would give it a tax break

  54. and while they were at it, they should have 100% eliminated any tax deductions any business can take to buy season tickets to ANYTHING. whether they want to hear it or not, pro sports have almost, if not already, jumped the shark. the NFL will just be the first to go as much as I absolutely love it due to head trauma plus goodell and clown owners like jerry jones. second remember all you PC'ers and Title 9 apologists; football and hoops pay for all the useless little inane sports like badminton, chess, tiddlywinks, synch swimming and all those sports where your mom dosent even come to see you play. its doubtful even soccer or baseball would survive. surely not mens/womens volleyball, another sport I would actually walk across the street to see if the tix were <$10. if they go down all these other sports where the athletes who trade a useful education for the privilege of flying all over everywhere go to play a game nobody cares about. see it every time I fly which is 2x-3x a month. so own both ends of this or dont. I say end anything that isnt self-sustaining.

  55. Actually, most college/university football teams don't make money -- to cover other teams' expenses or even their own. Researchers (e.g., Ethos) year after year report this. Yet, I understand ESPN repeats the opposite every year. ESPN is talking about the top few percent of teams. Alabama -- yes, it covers its expenses and other teams. Marshall, no.

  56. Lacking logical flow, main thrust, or conclusion, this can only be called a rant. The author seems to want to shut down "corrosive" college sports, yet also envies their revenue and wishes them to be taxed. OK. Outraged. Got it.

  57. Let's say he gets his way. In 10 years he'll be complaining that only rich, white kids can afford to go to these college. This is the logic of ultra-liberal tax everything nut-jobs.

  58. read it again - it is rather cogently argued from a variety of perspectives

  59. Note to America: greed is not good.

  60. What a joke. Recall that UNC BB and FB players took classes that never met and got passing grades. If the NCAA has any guts, the UNC FB and BB teams would have been suspended for at least 10 years and their coaches would have been fired.

  61. Throw stones in a glass house, why not? Your coache's $10meg/yr salary is nothing shy of obscene.

  62. MENS SANA IN CORPORE SANO, A sound mind in a sound body, is the familiar phrase of Juvenal, a Roman poet of the 2nd century AD in a satirical poem. It's an interesting conceit, though it's been fairly well disproved by brain scientists that there is a division between the mind and the body. When it comes to the corruption of higher education by college athletics, I wonder what Juvenal would have made of the corruption of college athletics, being poisoned by money. To the extent that college level athletes in football, soccer and other high-impact sports sustain head injuries resulting in Chronic Traumatic Encephalopathy, there is strong evidence that the mind is made into much, abandoning even a satirical idea of the sound mind in the sound body. It is a given that kids are entitled to sound bodies and sound minds; yet with the epidemic of childhood obesity, the ideal has moved farther away from reality. Add to that kids who play tackle football or other high impact sports have been found to have symptoms of Chronic Traumatic Encephalopathy as young as middle school. To add insult to injury, 99% of taxpayers are now being held up to compensate for tax exemptions for college sports. But where Trump is concerned, Will Plunders Never Cease? Of course not! Only the 1% deserve to live and prosper; the rest of us of the 99% do not warrant living wages, a clean environment and a government that is of the people, by the people and for the people, perished from this Earth.

  63. The mind depends on experience as well as "wellness".

  64. The author certainly has his knives sharpened for higher education. I say tax the robber barons -- real estate magnates (like Trump), CEOs, hedge fund managers and other bank plutocrats, polluter industries, and the like. But, for mercy's state, let colleges have a fighting chance to give us an education.

  65. If sports are so vital to education why is the Ivy League the most prestigious academic conference?

  66. The Ivy League is an athletic conference. Its member schools believe athletics is an important aspect of education and therefore work hard to find and support students that can compete in both areas. The Ivy, Patriot and other like-minded leagues have a high percentage of student participation in varsity athletics as a result.

  67. They Ivy League is still a big player in two out of the three “helmet sports,” men’s lacrosse and ice hockey. In the early 1970s, future TV star Ed Marinaro (Hill Street Blues) finished second in the Heisman Trophy voting, a running back at, wait for it, Cornell. He followed by a couple of years a national championship ice hockey team there anchored by a future hockey hall of famer named Ken Dryden. The Ivy League used to pursue big time athletes in all sports. They deemphasized football, but not lacrosse and hockey. By the way, overall throughout the eight Ivies, the two largest demographics are recruited athletes and legacies.

  68. When I attended Dartmouth long, long ago there were no athletic scholarships. Athletes were recruited, scholarships were awarded and students decided to play or not without penalty. I played intramural sports against 1st team all-state athletes on scholarships who elected academics over their sports. Many sports were club activities (rowing, rugby, sailing for example) which met with success. Some became College sports, but as far as I know, there still are no athletic scholarships in the Ivy League and a scholarship athlete is free to choose his or her path to graduation. My freshman year the football team won the Lambert Trophy. Then the fullback went to med school and the quarterback went to Harvard Business School. I knew a dominant rugger, recruited for hockey, who went on for a graduate degree in biology, then med school, and was practicing at Mass General and doing research - and still playing rugby at championship level eight years after leaving Dartmouth. There were scholar athletes and there still can be given the proper circumstances.

  69. It’s not only not taxed, it also break any labor law by forcing the athletes to no without fair compensations.

  70. I would question why surgeons at NYU Langone, making a lot of money, get tax free tuition for their kids. NYU does stories about janitor kids, but how many are kids of wealthy kids getting this tax free benefit. Maybe colleges would be more concerned about increase in tuition if the kids of top people did not get tax free tuition free aid. And how many board members of collages are Senators or their wives, who get this for their kids.

  71. Not only is the US Tresuary subsidizing these institutions but local taxpayers foot the bill via tax exempt property taxes. Guarantee payment upfront, regardless of the output is a great business model. No cost controls needed.

  72. I agree with comments below that this is more a rant than an analysis. I particularly note the final paragraph where he seems to blame the POTUS (who else) for this tax dodge. And let's remember the recently signed tax cut by this POTUS includes that "carry through" or whatever it is called to shelter incomes of real estate investors, the hedge funders etc- which the POTUS had opposed. It's the K street where this rant should be directed and soon, that "stone wall Jackson" or more the quicksand variety will join this legion of lobbyists. And if in the next tax bill college athletics starts paying taxes - all schools in Tennessee will be exempt. On that, I can take my money to the bank.

  73. $2,900,00.00 per year for an employee of a Non-profit? The fact that our tax code not only permits this but actually encourages this sort of nonsense is truly disheartening.

  74. College sports organizations are more like pass through organizations than non profits. The primary residual claimants are coaches and ADs -- the former often paid as pass throughs themselves. Also, during the tax bill debate about taxing graduate student tuition waivers my thoughts immediately went to how benefits to "student athletes" were no different.

  75. The vast majority of college sports 'profit' is used to fill out the not so popular or lucrative sports, including many women's sports - and extending scholarships to athletes that excel in more than just 'money' sports. If you tax it, how many people are you denying scholarships or collegiate athletic opportunities? There is a balance to be struck, but given the billions sitting in offshore corporate accounts, perhaps there are better things to go after than college sports?

  76. The vast majority of big time sports programs, in revenue sports, don’t make a “profit” at all. Acouple of years ago, USA today did an analysis. For every profitable program, like Ohio State football, there are 5-10 money losing programs. Sell that bill of goods elsewhere.

  77. Ohio state football makes plenty of money ... the idea that putting a bunch of unpaid kids on a field with a couple of hundred buck worth of protective equipment and then selling the rights to TV and merchandising is a money losing venture is just plain silly. If is on TV ... it is making money and the majority of that money is going to other college sports.

  78. It's not just college sports that rake in big money while claiming to be "not-for-profit." In fact there is no such thing as not-for-profit. Lots of tax exempt entities, from hospitals to museums to arts organizations generate huge incomes on which they don't pay tax. There really should not be any such thing as a tax-exempt entity recognized by the IRS. If you are truly not-for-profit and spend all the revenue you take in, you won't owe any tax. If you are making a profit, it should be taxed regardless of your organization's legal structure.

  79. Colleges have no business being in the football business, period. A college is an institution of higher learning. Football is a 'sport' that we know to be a cause of permanent, debilitating brain injury among many of its participants. A college should not be in the brain damage business, period. The tax code should not reward colleges for being in the brain damage business, period. A college should not recruit and exploit young men to play football, most of whom have no other reason for being in college and who will derive no academic or intellectual benefit from being in college. If professional football is to continue as an industry - and it is my fond hope it will not - colleges should not serve as training camps and the minor leagues for that industry. The industry can operate its own minor leagues and training camps. Someday in the future, one hopes Americans will look back on this whole brutal, barbaric business and marvel that we ever allowed, much less encouraged its existence.

  80. The NFL and NBA should set up a minor league system similar to that of MLB, and choose their player talent from that pool; likewise, their coaching staffs. Many student athletes at Division 1 schools are there for no other reason than to get a shot at playing pro ball - itself a ridiculous enterprise in which men are paid millions to play children's games. Many taxpayer-funded public universities have become financially reliant on bloated sports programs that do little to improve the quality of education, but which often have a negative influence on academics when they bring influence to bear to keep players eligible to perform.

  81. That's a lot of period commentary. Is there any argument or is it all settled, period?

  82. If nothing else loopholes/scams such as this article points out, will hopefully get more attention next year. Tax loopholes can be a great political strategy for the Democrats. There are so many, and if the Dems play it right, everyone can be aimed right at Trump and the Republican Congress. Because that's who likely created them in the first place.

  83. > Tax loopholes can be a great political strategy for the Democrats. Honestly, with the amount that Democrats hand out to favored "green" and "socially positive" industry, I wouldn't bet on it.

  84. Subsidy to “green” industry is a drop in the bucket to what is handed out to, say, fossil fuel extractors. And that is before the current reign of error’s plans to eliminate any green energy subsidy. The Oil depletion allowance makes ALL green energy subsidy look like chump change.

  85. Balderdash. Over half of discretionary funds are wasted on bloated and obscene military expenditures. Almost everything else is window dressing.

  86. Yes, many sources of income for the Federal government, er GOP, without manipulating Social Security and Medicare and Medicaid and tax relief for the very well-to-do. 'i know some good games we could play,' said the cat. 'i know some new tricks,' said the cat in the hat. 'a lot of good tricks. i will show them to you....' And the "tricks" have had and will have consequences for the middle and lower financial classes. And why such robbery of so many in our nation? Simply to please the GOP "donor" base (to the victor go the spoils!) and the world of athletics? What a sad commentary on our national values. What happened to infrastructure, healthcare for all (yes, including children) public education, renewable energy, protection of water and air, etc., etc.?

  87. If they were truly "nonprofit", they wouldn't pay taxes anyway. Why do they need a special tax status?

  88. Did you read the article? When their lines of business go outside their professed purpose AND those activities bring in profits, there arises a question of treatment of those funds.

  89. I propose that universities be given a choice. Monies earned by athletic programs that are given to the academic programs of the university without strings attached should be tax-free, just as contributions made by any other donor are (or at least were, prior to the GOP tax fiasco); those that remain in the athletics program to fund salaries or facilities should be taxed, just like revenues for any other corporation.

  90. I thought that the IRS regs were clear that "Unrelated business" income for a non-profit IS supposed to be taxed. IE. if a regional theatre runs a restaurant next door to the theatre, the profits from the restaurant are taxed, while the profit from the theatre is not. How on earth is the IRS not interpreting the law that way for college football and basketball???!

  91. Obviously, colleges have sold the bill of goods to the IRS that sports are not “unrelated.”

  92. What if the theatre sells the bistro at a profit? Or if the bistro contributes its profits to the theatre? Right.... it gets a tax deduction.

  93. Amen. College sports are a huge scam that have nothing to do with education. Any honest administrator will tell you that prominent sports (basketball, football) exist to generate revenue and to drive up application rates, which they also do. Nothing about these sports is educational. There are legitimate student athletes in minor sports, but most players in the big sports enroll in meaningless degree programs and learn little. College sports should be taxed the same as all other professional sports.

  94. Not to be a Monday morning quarterback, but, why is article written after the tax overhaul is completed. Too little too late.

  95. Colleges and university real estate holdings are also exempt from property taxes in most places in the U.S., though many do give the cities and towns they are based in a nominal sum as support for fire, police and emergency support services. Think of how much a city like Cambridge, MA could do with the money from the two largest landholders in the city were taxed fairly-Harvard and M.I.T. Next up....The church in all its forms.

  96. I have voted. I've stopped watching college sports. Its'a sinister greedy business that exploits teenage students while peddling alcohol, sex and male power that are the very foundation of the vulgarization and destruction of our civil society.

  97. Do what I do, limit your intake to “nonrevenue” sports, especially women’s sports. Case in point, UConn women’s basketball. They ALL graduate with skills and articulation. And Geno doesn’t cut scholarships for injury. How many men’s coaches do that?

  98. As a matter of fact, the scholarship athletes do not lose their benefits if they are injured. So your assertion is no more than gratuitous.

  99. President Trump reel in some millionaire's boondoggle? Fat chance. His whole presidency seems to be one.

  100. Money corrupts. Absolute money corrupts absolutely. America may survive everything but it’s unbelievable wealth.

  101. If there is a more corrupt in more possible ways an institution more odious than the NCAA, I'd like to know it; possibly FIFA could give them a run for their money when it comes to self dealing, changing the subject, opaque administration, and outright dishonesty. Their notion that vast numbers of "student athletes" at Division I schools deserve to be called students is laughable. Still, pitting the NCAA against the IRS would be the New England Patriots vs. a high school football team; add to it that the referees would be employed by the Patriots. Too many are getting too wealthy for this to change any time soon. Eliminating athletic "scholarships" could be a good first step. As long as the NCAA remains the minor leagues of the NBA, NFL, and increasingly the NHL, it will only get worse.

  102. All sports should be looked upon as entertainment. Sports records are of zero importance. Who did the most of this or the best of that in the end means nothing except to those sports junkies who love to revel in sports minutia. The mission of colleges and universities is education and not entertainment and therefore its sports programs should be taxed as the money generating business that they are and not treated as some sacrosanct college experience that enriches everyone except the players who are toiling in the last plantation.

  103. Do you feel the same way about drama and music departments?

  104. Except the players seem to feel otherwise. When, exactly, did team cooperation and discipline stop being an organizational behavior laboratory?

  105. I’m in favor of intramural sports but nothing else at the collegiate level.

  106. Right. And charge the players for their participation?

  107. Maybe if the colleges had their profits from sports taxed, they could lower their taxes by actually paying the players what they are worth, that is, a lot.

  108. The schools COULD even charge tuitions to the athletes who today have scholarships. The public fisc could collect taxes on the players' earnings. Win-win-win, right? Journalism majors seem seldom to understand tax economics/public policy. Probably because they pay taxes on their earnings. Doesn't that somehow contravene the First Amendment?

  109. Educational benefits of college football and basketball? Not one college credit is awarded to a fearsome middle linebacker or a dazzling point guard. read the mission statements of universities--education and research are at the core of every one of these documents. Call it what is please: a sports biz that serves the few.

  110. Actually several schools DO award college credits to varsity athletes simply for participating on the team.

  111. Oh really, kindly name them as my searches haven't turned up any. And besides, every parent or grandparent paying even one buck in a young woman or man's college education should be warned against such schools.

  112. If the profits from college sports were funneled into the educational mission of the college, student scholarships (beyond those offered to athletes who often stretch the definition of 'student'), campus equipment in laboratories, infrastructure cost like the library and so on, then why not let the tax loop hole go. Or maybe we could get the administrations to back-off on the scalping they do to grant monies .

  113. There is much that can be said about the business of college sports. Football and basketball in particular are legitimate targets for concern. However, McIntire focuses on only one part of the story, and leaves out important considerations. At many institutions, at least some revenue from the money sports gets contributed to general funds, thus supporting their broader educational mission. McIntire doesn't address how a tax on sports income might impact those contributions. McIntire also does not address the fact that the money sports (e.g., football and basketball) often subsidize many other sports that generate little revenue and are not self-supporting. In contrast to football and basketball, the "minor" sports serve individuals that can be truly considered student-athletes. How might a tax aimed at football and basketball revenues affect these students? Finally, the big bucks in college sports are obviously associated with a relatively small number of academic institutions. How might a tax on sports income affect the hundreds of smaller programs that do well if they can break even? McIntire doesn't say. We have enough problems waiting for us with a rushed tax bill that no doubt is filled with surprises and unintended consequences. Let's not go charging off filled with tax reform zeal and create new problems and unintended consequences.

  114. Schools should be able to write off the money actually used for the operations of the Athletic Departments- scholarship, student services, staff, equipment and travel. Everything else should be heavily taxed.

  115. This is a profoundly flawed editorial. Only a tiny fraction of college players go on enjoy success in any professional sports. The vast majority (more than 90%) will follow a career trajectory that is tied to the degree they earn in college. Furthermore, there is no evidence to suggest that increasing taxes on college sports is any more likely to reign in expenditures on college sports than reducing taxes on businesses is likely to increase employee wages under the current congressional tax plan. All it is certain to do is reduce the amount of booster revenue will go back into academics or community development. So, where does all that revenue go at present? It goes primarily to paying salaries, building facilities, and to providing support for athletes (academic, domestic, etc.). Most of those salaries are taxable, and if the Republican House tax plan had prevailed so too would the salaries of the graduate assistants who are paid to tutor the athletes.

  116. A small correction: the salaries of graduate assistants are already taxed, and have been for many years. The issue at stake in the tax bill was whether to treat waived tuition as income.

  117. "The vast majority (more than 90%) will follow a career trajectory that is tied to the degree they earn in college." I'd like to see the source of that 90% number. A 2014 study found that the graduation rate of college athletes was around 55% overall.

  118. 1) Can we clarify what is meant by "college players" associated with the 90%? Minor sports and even intramural participants might be called "college players" 2) It would be interesting to see a bar chart showing graduation rates and degree related employment for various levels of academic scholarships, It would take a lot of work looking a many NCAA programs; some might not support the effort.

  119. The athletics program at the university where I teach identifies itself online as .com rather than .edu. It runs at a loss, subsidized by student fees and booster donations, so even if it were an outright business no taxes would be due. Running at a loss seems much more common for athletics programs than making vast promises, despite snake oil pitches from athletics directors to faculty senates. Still, .com seems to signify a different model of operation than .edu. Looking on line at just a few programs the practice seems universal from football and basketball powerhouses like Michigan and Stanford through the Ivies to my non-football undergraduate alma mater. Impressionistically, only the University of Chicago seems to use .edu for its athletics program, though doubtless there are some others. Why?

  120. While I understand this wasn't the focus of this op-ed per se it's an important college sports issue that needs to be addressed: these college players who are generating hundreds of millions and getting their coaches 7-8 figure salaries make NOTHING. To become an NFL player you HAVE to play college ball, and while the vast majority won't make the draft anyway there are many, many players over the years who could or even would have if not for a devastating injury. Is that a risk they're willingly taking? Sure. But we're not talking about some middle school team with a volunteer coach, we're talking about a multi-billionare dollar industry in which the players themselves are getting nothing. Why should the star QB of a championship team be denied a penny while his coach makes $10 million a year?

  121. How about figuring what the tax on sponsorship money, at least, would be, and then legally obliging universities to use that money only, and completely, for academic scholarships

  122. The huge number of fans will prevent anything from happening. Outside of the large metropolitan area, life for most people centers around college sports. If Hillary Clinton had run against college football instead of Donald Trump, she would have lost the popular vote 30-70.

  123. I am amazed and appalled the Republican Congress caved into the lobby fighting for carried interest which they defended by saying it was a "small" item worth only $18 billion. Yet here it's reported the tax plan is imposing an excise tax on college employee salaries exceeding $1 million. Remarkable! We are being told repeatedly and correctly that college expense has been rising and becoming unaffordable. That student loans are an anchor around the necks of too many students. That those who can't pay for college may end up being left out. Yet here we have a reporter who seems to feel the financial upside for universities to not have to pay taxes on sports profits is a bad thing. He instead is advocating taxing college sports profits which would result in impacted schools raising tuitions to cover it. Yep, pure genius.

  124. "He instead is advocating taxing college sports profits which would result in impacted schools raising tuitions to cover it." I guess the option of scaling back or eliminating those costly sports programs never occurred to anyone.

  125. Tax all college and professional sports and donations to them. All religious organizations and their hefty portfolios of real state. Neither of these are clubs to which I belong or benefit from, so why should my hard-earned wages and subsequent taxes go to support them?

  126. "...why should my hard-earned wages and subsequent taxes go to support them?" Because the wealthy don't want to carry all of the burden. Same reason your hard-earned wages and subsequent taxes go to build sports stadiums for billionaires.

  127. Not sure which side you're batting for, here... The wealthy don't carry a disproportionate share of ANY burden, as far as I can tell (and will do even less so, after this new tax law). Stadia (plural of stadium) are usually built with tax payer money. I don't go to sports events and I don't practice any religion. People who attend either of these should pay for these personal choices, not the general public.

  128. According to USA Today, “Just 23 of 228 athletics departments at NCAA Division I public schools generate enough money on their own to cover expenses." So just 23 schools would owe taxes from sports revenues.

  129. If anyone thinks that T. Boone Pickens is donating all that money to The University of Oklahoma and Sooners' football for educational purposes then you're just not thinking straight. His donations have bought him a college football team at less than a tenth what it would cost to own a NFL team.

  130. T. Boone Pickens supports Oklahoma State University, not OU.

  131. That would probably be Oklahoma State. Jeez Louise!

  132. In the 1530's Henry VIII closed the monasteries in England and seized their huge wealth. Now Henry VIII certainly had his vices, but perhaps Trump will be our Henry VIII and attack our cloisters, the universities. Clearly college sports are a business and should be taxed as a business. But the same can also be said of everything about universities. People somehow believe that a non-profit has no profit, but that is mere accounting as universities are very profitable to all the insiders, tenured professors and administrators. This is generally true of all "non-profits". We need to open our eyes and not accept the nonsense that these are martyrs doing good.

  133. One of the great moral failures of our time is the college and university presidents collusion with the sports industrial complex. So-called student athletes are their fodder and the academic mission is their rationalization for allowing this abuse of their institutions. We can’t blame Trump for this ongoing scandal. Boards of trustees and presidents are the enablers and its corrosive impact is now eroding high school sports and family life with its push for club sports and one sport specialization among the young. The NCAA have all the moral weight of the IOC and the NRA.

  134. Commercialization of college sports is a corrosive and corrupt practice. It exploits athletes and demeans and diverts universities from their academic mission. Such sporting activities should be ejected from universities entirely and follow the practice of baseball with farm teams. At least there it is clear that it is just business and there is no pretense or corruption of academic objectives.

  135. If my Alma Mater, the University of Tennessee, claimed all its football game losses as tax credits the IRS would go broke! There actually is some benefit in the sharing of Title IX monies with the lesser athletics and women's team programs. The NCAA's "wink and a nod" approach to the corruption issue is something else. While players are not paid who generate much of this income that pays out millions upon millions to coaches, assistants, weight trainers and on and on, it is a very gray area that should require every NCAA team to evaluate annually the impact of boosters, sponsors, athletic wear contracts and other outside income. The whole thing smells.

  136. Show me a college that pays it's physics professors more than it's football coach and I'll show you a college!

  137. Show me a college where the coach has tenure but not the professor and I'll take your point.

  138. The coach at Arkansas who just got fired did not have tenure, but is getting about $15 million as a severance package. As a retired professor, it was a deal I would have taken.

  139. The NCAA masquerades as the guardian of vestal athletes whose only intent is to move on to the future that only a degree provides. It would be funny but for the reality that collegiate athletes, primarily in the money making sports of football and basketball, are the farm laborers for the collegiate farm teams for the NFL and NBA. It is a fact that the most successful programs operate independently of the colleges they represent on the field and court. Collegiate athletes may be the most underpaid workers in America relative to the income they generate for the NCAA and it's member schools. It is frankly pathetic that this near servitude is justified by a the cost of a degree. And worse that the NCAA is shielded by the gross fiction that it's preferential tax treatment is justified because a purported beneficial relationship of sport to education. Nothing exposes this more than the "one and done" recruitment of basket ball "scholars" who matriculate to NBA with a summa cum paycheck after one year. The gush of money generated by football and basketball permits a payment scale to head coaches from about 2 to 7 million a year, with top assistants in the million range. College presidents and professors now know the relative value to education of sports to.....education and how much they are appreciated. Do not expect Congress to address taxing the NCAA, while it's still digesting the dripping pork of the Tax Bill, any time soon. Pass the popcorn.

  140. We need an educational revolution in this country. When football or basketball is the major cultural activity at a university, no comment is required. Let the market deal with sports. Let's make schools about school.

  141. But meanwhile the Brain Trust that is the GOP Congress decided to tax private college endowment income for the first time (under a curious formula) which essentially means that some a donor's gifts to the general scholarship or operating fund years ago will now be reduced, thus depriving the institution and some student of much needed funds. Yay, Congress. You pinheads!

  142. Another look at college sports- "Hirer Education", http://members.efn.org/~hkrieger/sport.htm

  143. Even at the “respected” educational institutions of the ACC, like UNC Chapel Hill, have had athletic departments rife with academic fraud. And don’t get me started on, say Florida State and Miami...

  144. The NYT should look into "nonprofit" hospitals and health care plans that pay their executives millions of dollars. Some of these entities go far afield to stash their excess cash by buying regular businesses. Two examples I know of personally are Blue Cross of Pennsylvania and the big hospital system in North Carolina.

  145. Never ever forget, these so called profits, makes women scholarships possible. So when you trash college football and basketball, remember it will be bye bye women’s sports.

  146. So what. Are you there to learn or play sports?

  147. Surprise!! I cannot understand why you consider this a "new event", this "tax dodge". Sports has been a "tax dodge" for many years, and a prime example of "working for the Yankee Dollar", as explained in an old song. Just take a look at the number of so-called "Bowl" games this year. Do you actually believe that they are offered for the entertainment of the public? Or to make big bucks more than they already are taking from the fans' pockets? Get Real!

  148. I read a lot of comments that want to eliminate scholarships for African Americans. Isn’t that racism?

  149. NO, the comment is “eliminate athletic scholarships”.

  150. Perhaps. But I see a lot of African Americans brought into the system and tossed out with little once their usefulness to the team is over. Leaving them with little to fall back on while glamour coaches reap millions. Scholarships should all be fulfilled and the person graduates with a degree.

  151. The University of Alabama has a football team that is consistently ranked in the top 5. The University itself was recently ranked in an WSJ/NBC poll as 888th out of a thousand educational institutions. Which activity do you think receives the most attention? I think Unrelated Business Income tax should be applied to tuition and any grant monies that the school might receive since it is clear where the focus of this institution is placed.

  152. What caught my eye here as how LITTLE money the ACC made from this. Media companies must be getting rich. That said, I still prefer following (but rarely watching) college football over NFL.

  153. Tax them and plow the money right back into state-wide financial aid (i.e. tuition) for any bright kid who needs it.

  154. The money generated from college sports works its way into places that the general public does not see, thus it should continue to be tax exempt. When a college runs a winning major men's football or basketball program the overall admission rate of the school goes up. This has been well documented at places like Kansas State. When that occurs, it is necessary to hire more faculty and create more programs. Unfortunately, universities often hire poorly paid adjuncts to fill the void. That is a business decision by the college administration due to where the money comes from. That is not a decision by the federal government. Thus, we see million dollar coaches and struggling adjuncts. No one comes to watch adjuncts teach. The other unfortunate part of this process is that the student-athletes often struggle with the student part, given that they spend so much time on the practice field or court. There is a host of tutors and programs to help the athletes, but it is tough. This creates makes athletes look like soldiers-for-hire. The NBA and other professional leagues could help this process by installing better minor league programs that would allow professional grade eighteen-year-old athletes to skip college and work on their skills. Again, this is not a problem that rests with the federal government.

  155. The vast majority of schools LOSE money on their athletic programs. These losses have to be made up from general funds that would go to supporting the real mission of colleges, education and research. Every dollar spent on or donated to athletics is a dollar that does not go to the mission of higher education. It also adds to fees and tuition of students and families struggling with debt. Tax these parasites. Tax them until they fail. If we must cater to the rah-rah of sports fanatics, let then create for profit minor leagues.

  156. I design buildings and bridges that help the rest of society remain efficient which boosts our GDP. Should my salary be taxed?

  157. Your salary IS taxed.

  158. This is simply another form of entertainment. No one truly can change it either, because of the huge sums of money involved. Look how much teams are paid by television networks are being paid. The amounts are tremendous. I have not even mentioned coaches and athletic directors. The days of purity in collegiate athletics are long gone. It is a shame. "March Madness" truly applies, only now it is year round.

  159. The emergence of college sports as a profit-center for colleges has long been a tale of the tail wagging the dog. Sports scholarship is a good thing, and supplementing college balance with revenue from sports program is not itself a bad thing. But the humongous amount of money involved in college sports program has become so distortive that it has become a league (more like kingdom) of its own, with little to no checks and balance. (Case in point: The Sandusky scandal and how UPenn, led by Paterno, looked the other way in order to protect its gravy train, rather than protecting the kids.) In the parlor of the business world, college sports is way overdue for a "spinoff." To add salt to the insult (of commonsense and common decency), these college sports programs and their colleges are all tax exempt, while raking in their hundreds of millions, all in the name of college education, when we all know full well that NCAA has diverged from the underlying college education for far far far too long. This has to stop.

  160. Sport are not a profit center for colleges. What comes in gets spent. 70 percent of football teams lose money

  161. Penn State, Not UPenn (University of PA). Penn may have some explaining to do about the President though.

  162. Penn State University, not University of Pennsylvania.

  163. I pay attention to Michigan State University's finances so I'll use them as an example. Football and men's basketball take in more revenue than they spend. These two programs finance all other intercollegiate sports to include all women's sports. Much of this revenue reaches the university general fund via the tuition paid by the athletic department. Last year they had 5 teams with 100% gradation rates. If MSU is taxed, that money now goes to federal and state governments and tuition is likely forced up yet again. I type this while watching the Wisconsin Miami bowl game. Good game!

  164. I'll bet none of the five teams you didn't detail, were the football or basketball teams.... yeah!

  165. Why are't the kids paid? Will their scholarships be taxed as income?

  166. "Kids"??? They may be kids in age, but they are also huge potential money-makers, and are viewed as such by many adults outside the world of sports.......

  167. My fantasy would be to separate academics completely from the education mission in terms of money and academic performance. License the school name to the sports teams, but otherwise let them go their separate ways. I expect no less money would be spent on sports, but it would be transparent, maybe taxable, and I hope lead to paying the athletes.

  168. I played on our College Rugby club in my younger days and we had a grand time playing other conference schools. We were given a small amount to cover travel expenses and since we did not charge admission to our matches, we generated no revenue. Big business College sports are a different story... a profit center that pays big salaries and gives lucrative benefits to the Institution. These revenues should be taxed as any business and/or their profits need to be used for the good of the students such as reduced tuition for the entire school population; not only athletics. The mission is education, not sports franchises.

  169. Any time there is an organization where people are paid significantly more than Tenured Professors (and what is the ratio between the Athletic Department payroll and the Academic/Instructional Payroll?), it ceases to contribute to education.

  170. 1. The kids ARE paid (football and basketball anyway) . . . They make $40,000 to $70,000 per year in scholarship, cash, and gifts (above the table). Division 1-A football teams can each award 85 full scholarships (at a time). Be aware that at least four to five times as many kids are on full football scholarships as will ever work even a single day in professional football. 2. The big issue in college sports is the dropping of Olympic sports so the schools can pay outrageous salaries to football and basketball coaches and build facilities (for football and basketball) that outshine the NFL and NBA. There are assistant football coaches in the top 0.5 percent of income earners. Men's Gymnastics is the poster child for Olympic decimation. The sport has gone from over 200 teams to just 16 remaining varsity squads even though the cost of a team is cheap, demand is high, and the athletes are highly respected. Ever four years we're upset that the USA doesn't meet it goals at the Olympics. If we want a great Olympic team, we need great NCAA programs.

  171. "If President Trump wants to repatriate and tax corporate profits stashed offshore, he might also consider the untaxed billions hiding in plain sight on campuses right here at home." What? And alienate his tailgating base?

  172. But now we are taxing the endowments of our best universities. Do any of the schools getting taxed field a Division I football team? These snotty elite schools need to get their priorities straight. Says a lot about why America is going down the dumper.

  173. Oh, Doh, all the Ivies have division one programs. So does Stanford

  174. Recently this journal hosted an op-ed paean to the poor, underfunded IRS and how tough their many jobs are. The obvious presents itself. Here is a target-rich environment to exploit with a bit of Congressional imprimatur. Audit these bastions of untaxed, hidden wealth. Impose Federal income, excise and employment taxes on every campus above a certain size and empower States to fashion whatever tax policies toward their colleges they wish. It is way overdue to have these swells start paying attention rather than commanding it.

  175. And yet liberal professors at these colleges screech about taxing the rich. Ironic.

  176. I assure you that the faculty at these universities are appalled at how large sports have become there - I know because I’m one of them. College sports don’t need to be a minor league to pro sports to enhance the college experience. And an appalling aspect of this is that so few colleges actually make a profit from even the high revenue sports so this activity actually drains resources from the academic mission in most places.

  177. John, Most of the liberal professors also screech about athletic department salaries and perks. And how at all but the thirty or so top programs how the football and basketball teams need to be subsidized.

  178. sticky wicket - "imposing an excise tax on college employee salaries exceeding $1 million". A nice bit of arguably fair redistribution. But, why stop at University employees? And why stop at $1 million. Why not subject all salaries / earnings from any job or investment progressively up to around a $1 billion yearly cap (steps from 40-80%). As unseemly as big money is in college sports it does tend to trickle down to cover "bonafide" expenses. Who will make up the difference as public subsidy continues to shrink and conservative values seem to now require anti-university sentiment? Might be the only genuine place trickle down economics actually works.

  179. No amount of appeals to reason and emotions will ever succeed in reining in the excesses of collegiate athletics. The unconscionable tax loophole that protects the massive revenue streams generated by selling broadcast and sponsorship rights is not the problem; it is merely a symptom. The culprit is the patriarchy. Starting in their childhoods, many males are saturated in America's macho sports culture. Little boys want to become the heroes their college football and basketball idols seem to be. And if they aren't fortunate enough to play team sports after high school, then by God, they're going to join their fathers, brothers, uncles and their friends in the male ritual of gathering in front of the television to watch the gladiators on the football field or the basketball court. Elsewhere, men go about the silly and highly lucrative business of managing and promoting collegiate sports with all the earnestness of seven-year-olds picking their teams on the sandlot. The difference is that the kids don't pull down six and seven figure salaries. And this brings us to the other reason the collegiate sports machine will never be overhauled: these guys have figured out how to do something that gratifies them to the very roots of their X and Y chromosomes and make a bloody fortune doing it. If we lived in an alternate society where men's sports didn't exist, we wouldn't be having this conversation. The guys would find something else to latch onto for fun and profit.

  180. collegiate athletics - an oxymoron!