Should College Sports Revenue Be Taxed?
College basketball and football are big business — no one would deny that. But should they be taxed like big business? Although the NCAA and its member schools are tax-exempt not-for-proft organizations, such organization may nonetheless be taxed on “unrelated business income.” So, the question is whether big-time college sports programs are related to the educational mission of the universities that host them.
Matt Mitten, James Musselman, and Bruce Burton argue “yes” in a new article — because sports programs advance a wide range of legitimate university objectives, sports revenues should retain their tax-exempt status. Based on a number of case studies, they conclude that the benefits to universities of improved athletic programs may include “attracting high-quality faculty and students, generating donations and enrichment, reconfiguring [] campus identities, and enhancing institutional political clout.”
Although Matt and his coauthors do not believe that tax law is the right way to reform college athletics, they recognize a need for changes to better protect student-athletes from exploitation. They would promote reform through a new, conditional antitrust exemption for the NCAA and its members.
Their article, entitled “Commercialized Intercollegiate Athletics: A Proposal for Targeted Reform Consistent with American Cultural Forces and Marketplace Realities,” was recenly published at 2 J. Intercollegiate Sport 202 as part of a symposium on tax law and athletic reform. The abstract appears after the jump.