Sooner Eclipse
10/16/2006, 04:34 PM
The WALL STREET JOURNAL: Oct 16, 2006
Who Profits From College Sports?
October 13, 2006; Page W13
Alarm bells usually go off any time the government thinks about taking more money out of people's hands, including the hands at nonprofit organizations. So it's easy to imagine that the National Collegiate Athletics Association freaked out when it received a letter this month from a congressional committee that has been investigating the tax-exempt status of nonprofits.
Writing on Oct. 2 to NCAA President Myles Brand, House Ways and Means Committee Chairman Bill Thomas (R., Calif.) asked enough probing questions to keep Mr. Brand and his university associates busy for ages. They must now scramble to prove that their underlying mission is educational in nature -- the basis on which college-sports revenue traditionally has been sheltered from the taxman. For the average reader, however, the letter contains some bombshells that could make it difficult to have much sympathy for the NCAA and its member schools during their current ordeal under the congressional microscope.
The grilling is already pretty intense. Rep. Thomas notes that under the terms of the NCAA's deal with CBS for broadcast rights to the men's basketball tournament, the organization is set to earn a yearly average of $545 million in tax-free money. Then he asks: "How does the transformation of the NCAA men's basketball championship into commercialized entertainment further the educational purpose of the NCAA and its member institutions?"
Rep. Thomas also brings up the favorable tax treatment that corporations and others can get in return for "sponsorship payments." Then there's the $100 million that the NCAA doles out each year among Division I championship basketball teams. What's the educational purpose of all that?
More to the point, as the letter asks: "From the standpoint of a Federal taxpayer, what BENEFITS does the NCAA provide taxpayers in exchange for its tax exemption?"
Also in the torrent of questions are zingers like this: "Why should the Federal government subsidize the athletic activities of educational institutions when that subsidy is being used to help pay for escalating coaches' salaries, costly chartered travel and state-of-the art athletic facilities?" And what about NCAA reports showing that public universities spent as much as $600,000 per men's basketball player during the 2004-05 school year: "How [does that] further the educational mission of universities?" Congress also wants to know: "What percentage of NCAA revenue is spent by your member institutions on solely academic matters?" And so on.
The letter zeroes in on some familiar criticisms for the NCAA, such as low-graduation rates among athletes -- only 55% for football players at Division I-A schools, Rep. Thomas writes, and 38% for basketball, compared with 64% for all students. In his reply, Mr. Brand undoubtedly will cite some signs of improvement, particularly with regard to graduation rates among black athletes -- the students most often victims of schools that want their players' touchdowns and baskets without having to give them an education.
A general, initial response to the congressional letter came from NCAA spokesman Erik Christianson. "We simply disagree with the fundamental assertion that intercollegiate athletics is not part of higher education," he told the Chronicle of Higher Education this week. Let's hope Mr. Brand doesn't try to rest his case on that bland assertion. In a battle like this one, the NCAA will need a large and powerful roster of convincing details to prevail.
In the end this cant be good for individual athletic departments but it is good to see a little heat on the NCAA's policies and practices for a change.
Anybody think Boren is any part of this?
Who Profits From College Sports?
October 13, 2006; Page W13
Alarm bells usually go off any time the government thinks about taking more money out of people's hands, including the hands at nonprofit organizations. So it's easy to imagine that the National Collegiate Athletics Association freaked out when it received a letter this month from a congressional committee that has been investigating the tax-exempt status of nonprofits.
Writing on Oct. 2 to NCAA President Myles Brand, House Ways and Means Committee Chairman Bill Thomas (R., Calif.) asked enough probing questions to keep Mr. Brand and his university associates busy for ages. They must now scramble to prove that their underlying mission is educational in nature -- the basis on which college-sports revenue traditionally has been sheltered from the taxman. For the average reader, however, the letter contains some bombshells that could make it difficult to have much sympathy for the NCAA and its member schools during their current ordeal under the congressional microscope.
The grilling is already pretty intense. Rep. Thomas notes that under the terms of the NCAA's deal with CBS for broadcast rights to the men's basketball tournament, the organization is set to earn a yearly average of $545 million in tax-free money. Then he asks: "How does the transformation of the NCAA men's basketball championship into commercialized entertainment further the educational purpose of the NCAA and its member institutions?"
Rep. Thomas also brings up the favorable tax treatment that corporations and others can get in return for "sponsorship payments." Then there's the $100 million that the NCAA doles out each year among Division I championship basketball teams. What's the educational purpose of all that?
More to the point, as the letter asks: "From the standpoint of a Federal taxpayer, what BENEFITS does the NCAA provide taxpayers in exchange for its tax exemption?"
Also in the torrent of questions are zingers like this: "Why should the Federal government subsidize the athletic activities of educational institutions when that subsidy is being used to help pay for escalating coaches' salaries, costly chartered travel and state-of-the art athletic facilities?" And what about NCAA reports showing that public universities spent as much as $600,000 per men's basketball player during the 2004-05 school year: "How [does that] further the educational mission of universities?" Congress also wants to know: "What percentage of NCAA revenue is spent by your member institutions on solely academic matters?" And so on.
The letter zeroes in on some familiar criticisms for the NCAA, such as low-graduation rates among athletes -- only 55% for football players at Division I-A schools, Rep. Thomas writes, and 38% for basketball, compared with 64% for all students. In his reply, Mr. Brand undoubtedly will cite some signs of improvement, particularly with regard to graduation rates among black athletes -- the students most often victims of schools that want their players' touchdowns and baskets without having to give them an education.
A general, initial response to the congressional letter came from NCAA spokesman Erik Christianson. "We simply disagree with the fundamental assertion that intercollegiate athletics is not part of higher education," he told the Chronicle of Higher Education this week. Let's hope Mr. Brand doesn't try to rest his case on that bland assertion. In a battle like this one, the NCAA will need a large and powerful roster of convincing details to prevail.
In the end this cant be good for individual athletic departments but it is good to see a little heat on the NCAA's policies and practices for a change.
Anybody think Boren is any part of this?