{"id":9733,"date":"2010-04-25T15:22:16","date_gmt":"2010-04-25T20:22:16","guid":{"rendered":"http:\/\/law.marquette.edu\/facultyblog\/?p=9733"},"modified":"2010-04-25T15:22:16","modified_gmt":"2010-04-25T20:22:16","slug":"should-college-sports-revenue-be-taxed","status":"publish","type":"post","link":"https:\/\/law.marquette.edu\/facultyblog\/2010\/04\/should-college-sports-revenue-be-taxed\/","title":{"rendered":"Should College Sports Revenue Be Taxed?"},"content":{"rendered":"

\"\"<\/a>College basketball and football are big business — no one would deny that.\u00a0 But should they be taxed like big business?\u00a0 Although the NCAA and its member schools are tax-exempt not-for-proft organizations,\u00a0such organization may nonetheless be taxed on “unrelated business income.”\u00a0 So, the question is whether big-time college sports programs are related to the educational mission of the universities that host them.<\/p>\n

Matt Mitten<\/a>, James Musselman, and Bruce Burton argue “yes” in a new article<\/a>\u00a0— because sports programs advance a wide range of legitimate university objectives, sports revenues should retain\u00a0their tax-exempt status.\u00a0 Based on a number of case studies, they conclude that the benefits to\u00a0universities of improved athletic programs may\u00a0include “attracting high-quality faculty and students, generating donations and enrichment, reconfiguring [] campus identities, and enhancing institutional political\u00a0clout.”\u00a0<\/p>\n

Although Matt and his coauthors do not believe that tax law is the right way to reform college athletics, they recognize\u00a0a need for changes to better protect student-athletes from exploitation.\u00a0 They\u00a0would promote reform through a new, conditional\u00a0antitrust\u00a0exemption\u00a0for the NCAA and its members.\u00a0<\/p>\n

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<\/a>.\u00a0 The abstract appears after the jump.\u00a0 <\/p>\n

This article observes that American society\u2019s passion for intercollegiate sports competition is an extremely powerful, naturally evolved cultural force. The marketplace responds to cultural forces, and the commercialization of college sports directly reflects the marketplace realities of our society. For example, colleges and universities rationally use their intercollegiate athletic programs, particularly NCAA Division 1 FBS football and basketball, as a means to achieve a wide range of legitimate objectives of higher education. Thus, the authors advocate that university athletic department revenues should continue to be exempt from federal taxation, specifically the unrelated business income tax (UBIT), despite the increasingly commercialized nature of intercollegiate sports. However, the commercialization of intercollegiate athletics creates the potential for conflict with a university\u2019s academic mission and the risk that student-athletes may be exploited. The authors propose that Congress provide the NCAA and its member universities with a limited exemption from the federal antitrust laws conditioned upon targeted reforms that will 1) ensure that intercollegiate athletics are primarily an educational endeavor; 2) better enable student-athletes in revenue-generating sports to obtain the benefit of their bargain; and 3) protect and maintain student-athletes\u2019 intercollegiate athletics participation opportunities in nonrevenue generating sports.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

College basketball and football are big business — no one would deny that.\u00a0 But should they be taxed like big business?\u00a0 Although the NCAA and its member schools are tax-exempt not-for-proft organizations,\u00a0such organization may nonetheless be taxed on “unrelated business income.”\u00a0 So, the question is whether big-time college sports programs are related to the educational 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