Some folks think that football is just a game. In many parts of the country, those folks would be wrong. In the South (and indeed in other places around the country like State College, PA), football has assumed a level of importance right next to God; in fact, we often joke in the South that football is a religion. And as you know, religion and politics don’t mix.
It’s not surprising, then, that the latest strike in the Bowl Championship Series (BCS) fiasco is lead by a Southerner. Rep. Joe Barton (R-TX) is leading the charge to have the Internal Revenue Service “thoroughly examine” a tax complaint filed against three premier college football bowls. Barton is no fan of the current system and has previously described the BCS as “like Communism: You can’t fix it.” Barton is so passionate about the issue that he has actively championed a change to the BCS, even sponsoring federal legislation to force college football to switch to a playoff system to determine the national championship (closer to say, how college basketball does it).
The tax complaint in question has been brought by Playoff PAC, which describes itself as “a federal political committee dedicated to establishing a competitive post-season championship for college football.” The complaint was filed with the IRS complaint against the Fiesta, Sugar and Orange Bowls (the Rose Bowl and the BCS title game were not included in the complaint). The three bowls have been accused of violating their tax-exempt status by engaging in a number of prohibited behaviors including paying excessive salaries and lobbying.
Barton issued a letter to IRS Commissioner Doug Shulman, urging him to take the complaint seriously. The letter was also signed by Reps. Cynthia Lummis (R-WY); Gene Green (D-TX) and Jason Chaffetz (R-UT). The letter said, in part:
As public charities that take in millions of dollars each year, they receive significant tax exemptions and benefits that must not be abused… We therefore ask that you act on our request and thoroughly examine these troubling claims.
The IRS, of course, would not comment on the matter. The Fiesta, Sugar, and Orange Bowls did not respond publicly to the most recent charges.
This isn’t the first time that the tax-exempt status of college sports have been called into question. The NCAA has been under scrutiny for the past couple of years with respect to its finances. The salaries paid to sports coaches, employees of tax-exempt organizations, have also made news – the clamor to learn the “secret” of Joe Paterno’s coaching salary reached the Pennsylvania Supreme Court.
This latest call is, however, a departure from the normal arguments against the tax-exempt status of college sports. This is clearly more of an effort to effectuate a certain position (re-engineering those darn playoff games) than what should be the goal of a taxpayer complaint against a tax-exempt organization (parity and fairness in the tax-exempt system). In fact, I would argue that this strike against the Bowls, even if you really hate the current bowl system, has the potential to really hurt college football more than help. My guess is that if IRS actually looked hard at most college football programs, they’d find a lot of the kinds of behaviors alleged in this complaint.
With the increased focus on these programs, the odds of college sports coming out of this completely unscathed: not a prayer.
College football has been questioned about the validity of its tax exemption by Sen. Baucus. If anyone would like to see them, contact me and I can provide the letter to the NCAA from Sen Baucus and the reply by the NCAA – quite interesting reading. I, on a lot of levels, agree with Sen Baucus on this question of nonprofit status for the NCAA