The madness of March just got a little… madder?
In an article from the Chronicle of Higher Education, it was reported that an inquiry has been launched in Congress as to a number of potential tax abuses.
We all know that college sports are money-makers. The amount of revenue generated by ticket sales, merchandising, broadcast rights and donor contributions is staggering. And, oh yeah, colleges and universities are treated as tax-exempt organizations. Soooo…. what happens to the money? It’s tax-free to the university, of course.
A committee is now investigating whether this cash should, in fact, be taxed as “unrelated trade or business income.” In fact (gasp), Congress believes that college sports may actually be vehicles for entertainment and only slightly related to education. Say it ain’t so!
The committee is also investigating compensation of coaches and directors for college sports – something near and dear to the hearts of many these days. And finally, the committee is also asking questions about alumni donations for prime viewing locations – skyboxes and courtside seating.
This isn’t news to most of us who are college sports fans. College sports have long been evolving into a money-making operation with all of the potential for abuse. Look at the football scandals (thanks, Ohio State) and now basketball scandals (um, thanks again, Ohio State) that have made recent headlines. There is no question that college sports equal money. The bigger question is whether college sports should equal tax-exempt money. Is it just a mask for professional sports after all?
We’ve commented before on the blog about sports and taxes, check out Madeline’s post about scholarships. As our resident sports enthusiast (a.k.a nut), we hope she’ll have more to say about this matter.
