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. 

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Establishment and the Limits of Neutrality

Rick Esenberg has a new article in print that explores tensions within the Supreme Court’s Establishment Clause jurisprudence.  In light of the recent, controversial decision overturning the National Day of Prayer, Rick’s topic could not be more timely.  As Rick observed earlier this week, the Day of Prayer opinion is consistent with a long line of cases that attempt to achieve a level of government neutrality as to religion that seems unrealistic and overly ambitious.  The article argues that “subtle expressive injury” cannot be entirely avoided when the government speaks, and suggests that the Establishment Clause jurisprudence would be much improved by abandoning any pretense to complete expressive neutrality.

The article, entitled “Must God Be Dead or Irrelevant: Drawing a Circle that Lets Me In,” appeared at 18 Wm. & Mary Bill Rts. J. 1.  The abstract appears after the jump. 

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Put This in Your PIPE . . .

3L Douglas Hoffer has a new paper on SSRN describing and defending “PIPE financing” — a form of corporate financing that has taken off in the past fifteen years.  PIPE financing permits corporations to raise money by selling equity through a two-step process that diminishes the regulatory burdens normally associated with public offerings. 

PIPE deals have drawn negative comments from other scholars and the SEC, but Douglas thinks the critics have failed to appreciate the important benefits of PIPE financing. His paper, entitled “Quagmire: Is the SEC Stuck in a Misguided War Against PIPE Financing?,” will be published in Transactions: The Tennessee Journal of Business Law.  The abstract appears after the jump.  

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