Buckle your seatbelts

Hawk_4shur

HR Legend
Jan 2, 2009
14,791
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Then tax them on their scholarship, room, board and tuition. If they are employees let them pay like every one else.

If they are employees, why do they have to attend class?

If the athletes are employees, then bye-bye tax exempt status for football and basketball. See you later deductibility of donations to these programs.

Ticket & TV revenue will be taxable. Facility improvements will be depreciated over a very long period of time (probably close to 30 years), meaning lots and lots of taxable income.

But, the players will get paid. Johnny so-and-so will now be able to afford to take his girlfriend to McD's. Jalen Rose and Jay Bilas will be very happy.

So, it's all good. 😔 😡
 

nbanflfactory

HR Heisman
Aug 22, 2021
5,228
5,223
113
If they are employees, why do they have to attend class?

If the athletes are employees, then bye-bye tax exempt status for football and basketball. See you later deductibility of donations to these programs.

Ticket & TV revenue will be taxable. Facility improvements will be depreciated over a very long period of time (probably close to 30 years), meaning lots and lots of taxable income.

But, the players will get paid. Johnny so-and-so will now be able to afford to take his girlfriend to McD's. Jalen Rose and Jay Bilas will be very happy.

So, it's all good. 😔 😡
It's cute you think the rich boosters will be affected lol
 

nbanflfactory

HR Heisman
Aug 22, 2021
5,228
5,223
113
Thanks.

It's interesting that you don't think people care about tax deductions. For some reason, the wealthy care a lot.
Yep and they'll "hire" these athletes and use their corporations to continue writing it off.

They'll just change how the money is used. The rich are still gonna get their write off.

Again you're too adorable:)
 

thejazzcat

HR Heisman
Sep 25, 2001
5,051
4,502
113
Yep and they'll "hire" these athletes and use their corporations to continue writing it off.

They'll just change how the money is used. The rich are still gonna get their write off.

Again you're too adorable:)
You're describing the old model. The new model in the article is the players being employed by the university. This bit of discourse is in response to the universities losing tax exempt status if they pay players as employees, which is highly unlikely. Universities employ and pay thousands of employees while maintaining tax exempt status. Employees being paid wages is not a determining factor in tax exemption.
 

nbanflfactory

HR Heisman
Aug 22, 2021
5,228
5,223
113
You're describing the old model. The new model in the article is the players being employed by the university. This bit of discourse is in response to the universities losing tax exempt status if they pay players as employees, which is highly unlikely. Universities employ and pay thousands of employees while maintaining tax exempt status. Employees being paid wages is not a determining factor in tax exemption.
Right on. I highly doubt that ever happens.
I can't think of a single group that benefits from that
 

Hawk_4shur

HR Legend
Jan 2, 2009
14,791
19,240
113
Yep and they'll "hire" these athletes and use their corporations to continue writing it off.

They'll just change how the money is used. The rich are still gonna get their write off.

Again you're too adorable:)
Appreciate it. Now check how many individual donors that won't get a tax deduction. It's a lot of donors.
 

thejazzcat

HR Heisman
Sep 25, 2001
5,051
4,502
113
Appreciate it. Now check how many individual donors that won't get a tax deduction. It's a lot of donors.
Universities won't lose their tax exemption just because players become employees. Universities pay many employees, some like head coaches - millions. Clearly all the money issues are going to be mind bending, but losing tax exempt status won't happen. IMO, the existential issue is the collapse of the NCAA as a governing body.
 

Hawk_4shur

HR Legend
Jan 2, 2009
14,791
19,240
113
Universities won't lose their tax exemption just because players become employees. Universities pay many employees, some like head coaches - millions. Clearly all the money issues are going to be mind bending, but losing tax exempt status won't happen. IMO, the existential issue is the collapse of the NCAA as a governing body.
The University won't lose their tax exempt status - the athletic department will. Here is an article from 2009. It has already come into question by Iowa's own Chuck Grassley.

https://www.jonesday.com/en/insight...ferences-applicable-to-intercollegiate-sports

In order to be tax exempt in this country, you have to have a qualifying exempt purpose. That exempt purpose is education at the University. But when the balance tips away from education toward making money, it calls the exempt status into question.

Here is an interesting quote from the article - remember that this is from 13 years ago.

The Report states that "concerns have arisen that some activities undertaken by colleges and universities are only loosely connected to educating students and might be viewed as unrelated to the schools' tax-favored purpose." The Report cites the "highly commercialized" nature of some athletic programs, along with the "large sums" of revenue that they generate,[3] and questions "whether those sports programs have become side businesses for schools and, if they have, whether the same tax preferences should apply to them as to schools in general."
 

Hawk_4shur

HR Legend
Jan 2, 2009
14,791
19,240
113
And they probably make up 5% of donations, if that...

Which is why I said rich boosters.
I think it's a lot more than that.

Don't misunderstand, I couldn't care less about donors - I just wonder about the impact on the amount of money going into the football and basketball programs.
 

hexumhawk

HR Legend
Sep 24, 2003
13,254
8,424
113
44
North Liberty
I hope all the NIL advocates like what college sports will become. You got what you asked for….plus a whole bunch. Gee, who ever could have seen this coming????
I get your point, but the ultimate blame should go to the NCAA. They had years to devise a solid, sound system and sat on their hands. Well, they didn't completely sit on their hands as they still had to use them to rake in the money they were making.
 
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obfuscating

HR Heisman
Jan 8, 2016
6,357
2,914
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Then tax them on their scholarship, room, board and tuition. If they are employees let them pay like every one else.
But but but that's now fair. Pay taxes, pay for their own healthcare, pay for travel, rooms, flights, etc... Open Pandora's box and you may not like what comes out of it.
 
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obfuscating

HR Heisman
Jan 8, 2016
6,357
2,914
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Not sure why everyone gets so upset about this stuff? Did this football season really feel any different than any other with all of the NIL changes?
First year, now folks have gotten smart with it and are creating NIL bank rolls for "students". It is changing the landscape, the grass will truly be "greener" on the other side (for the elite athletes at least).
 

thejazzcat

HR Heisman
Sep 25, 2001
5,051
4,502
113
The University won't lose their tax exempt status - the athletic department will. Here is an article from 2009. It has already come into question by Iowa's own Chuck Grassley.

https://www.jonesday.com/en/insight...ferences-applicable-to-intercollegiate-sports

In order to be tax exempt in this country, you have to have a qualifying exempt purpose. That exempt purpose is education at the University. But when the balance tips away from education toward making money, it calls the exempt status into question.

Here is an interesting quote from the article - remember that this is from 13 years ago.

The Report states that "concerns have arisen that some activities undertaken by colleges and universities are only loosely connected to educating students and might be viewed as unrelated to the schools' tax-favored purpose." The Report cites the "highly commercialized" nature of some athletic programs, along with the "large sums" of revenue that they generate,[3] and questions "whether those sports programs have become side businesses for schools and, if they have, whether the same tax preferences should apply to them as to schools in general."
Yep, it will be tricky, but I just can't see it ultimately coming to that. If someone wanted to split hairs, it would be hard to ever have justified sports being "educational" in the classic sense. But I suppose an argument could be made that it's preparing for a profession. The logical end of that argument would be to give credit for time played in the sport, which that first article mentions. There's no question that the gigantic money involved has, and will, get the attention of opposing forces, but in the end I think there will be one insurmountable issue - this won't be just about football and basketball, but ALL collegiate sports. The revenue generating sports are the golden goose that supports EVERYTHING. I just can't see that ending. What I do see is a gigantic, convoluted mess.
 
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thejazzcat

HR Heisman
Sep 25, 2001
5,051
4,502
113
I get your point, but the ultimate blame should go to the NCAA. They had years to devise a solid, sound system and sat on their hands. Well, they didn't completely sit on their hands as they still had to use them to rake in the money they were making.
This. So much this. On multiple levels.
 

onlyTheObvious

HR Heisman
Jan 3, 2021
5,200
6,049
113
Not sure why everyone gets so upset about this stuff? Did this football season really feel any different than any other with all of the NIL changes?
I agree. No different than somebody working at McDonald’s while a student. Just a lot more money.

there is only so much playing time to be had at big time programs. Alabama is not going to have 300 guys making a million dollars.
 

nbanflfactory

HR Heisman
Aug 22, 2021
5,228
5,223
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I think it's a lot more than that.

Don't misunderstand, I couldn't care less about donors - I just wonder about the impact on the amount of money going into the football and basketball programs.
Probably wouldn't matter much...they would just quit throwing money and the other sports.
 

CaboKP

All-Conference
Nov 21, 2006
430
394
63
So they can also be fired and stripped immediately of their full-ride and pay upon poor performance..perfect.
I think that is an important distinction, it could have an affect on the transfer portal. Everyone will want the places that pay...I am assuming UNI and similar won't be required to pay in football.
 
Dec 31, 2014
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Bye bye Women’s Athletics programs.

Hope the greedy are happy with the new world revolving around “getting theirs” they have created.

Lawyers and agents surely had a hand in all of this, SOTE.
 
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DodgerHawki

HR Heisman
Nov 19, 2002
9,229
10,625
113
If they are employees, why do they have to attend class?

If the athletes are employees, then bye-bye tax exempt status for football and basketball. See you later deductibility of donations to these programs.

Ticket & TV revenue will be taxable. Facility improvements will be depreciated over a very long period of time (probably close to 30 years), meaning lots and lots of taxable income.

But, the players will get paid. Johnny so-and-so will now be able to afford to take his girlfriend to McD's. Jalen Rose and Jay Bilas will be very happy.

So, it's all good. 😔 😡
Correct. Athletic departments would also be taxed on their revenue, as you pointed out. Just have NFL create its own minor league and we can go to a model of college sports that actually takes the student seriously. But NCAA did nothing for years and allowed it to get to this point.
 

TheGuy9

Team MVP
Mar 25, 2016
282
366
63
If they are employees, why do they have to attend class?

If the athletes are employees, then bye-bye tax exempt status for football and basketball. See you later deductibility of donations to these programs.

Ticket & TV revenue will be taxable. Facility improvements will be depreciated over a very long period of time (probably close to 30 years), meaning lots and lots of taxable income.

But, the players will get paid. Johnny so-and-so will now be able to afford to take his girlfriend to McD's. Jalen Rose and Jay Bilas will be very happy.

So, it's all good. 😔 😡
Why? If the University is tax exempt why would this change anything? Unless the Athletic Department s a separate legal entity, it should have zero effect. Universities have paid employees and it doesn't affect donation status. Individuals donate to specific departments all the time.
The impact would be on the players/employees who might be required to pay taxes but I am willing to bet that some crazed southern senator will work out some knid of exemption for athletes.
 

Hawk_4shur

HR Legend
Jan 2, 2009
14,791
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Why? If the University is tax exempt why would this change anything? Unless the Athletic Department s a separate legal entity, it should have zero effect. Universities have paid employees and it doesn't affect donation status. Individuals donate to specific departments all the time.
The impact would be on the players/employees who might be required to pay taxes but I am willing to bet that some crazed southern senator will work out some knid of exemption for athletes.
A couple of things about this -

First, having paid employees is not the problem. Hospitals, churches, schools - all have employees. The difference here is that the employees are being paid to advance the exempt purpose of the not-for-profit. A football player is not.

Second, it doesn't have to be a separate entity to be taxable. Tax exempt organizations have something called UBIT (Unrelated Business Income Tax). Many, if not all, complex exempt organizations have to deal with this tax all the time. One of the most common issues is advertising - the Football Program, for example, probably already creates UBIT issues because the sale of advertising is not related to the exempt purpose. This article explains it pretty well. The tax rate is a flat 21% on the net income generated by the unrelated activity.

https://www.aicpa.org/resources/article/unrelated-business-income-taxes-ubit-in-a-nutshell

So, why would paying employees trigger the loss of exempt status? Because these athletic programs were already on thin ice over a decade a go. Athletes receiving direct compensation instead of playing football as a part of their commitment to the school for academic reasons. would like be enough to push it over the cliff.

And finally, employee players "might" have to pay taxes? It's a mortal lock that they will. Unless it's a small enough amount that they can consider it part of the scholarship (total cost of attendance).
 

Hwk-I-St8

HR Legend
Gold Member
Nov 10, 2009
12,849
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Lower Slobovia
Just to start - this post is about paying players, not NIL...so all you NIL police don't need to tell me that NIL isn't about the schools paying the players. I get that, but it's not what this thread is about.


I don't really care about the tax thing. The real impacts will be on non-revenue sports and title IX. As employees, I think there's a good possibility that title IX will no longer apply. There's no need for equal scholarships which will greatly reduce the number of women's sports needed to balance out all those football schollys.

In addition, the revenue to pay players has to come from somewhere. Hey, football in raking in the cash, so no problem, right? Wrong. A bunch of that money is used to pay the cost of the non-revenue sports. So what do you do? Cut the non-revenue sports. Cutting men's non-revenue again reduces the title IX need for corresponding schollys for women's sports.

Also, they're employees now...how do you enforce the need for them to attend classes? I'd expect that to drop eventually too.

So the net effect will be semi-pro "college" football where the players are not college students, but are paid employees of the schools. The non-revenue sports will go away to fund the football players' salaries.

Oh...and you wrestling fans? No worries because our wrestling program is massively popular and isn't a money loser, right? Don't bet on it. Unless there are a bunch of other schools where it's as popular as it is at Iowa, they'll mostly be dropping it too. It doesn't matter if it's a revenue sport here if all the opponents drop the sport.

Who knows for sure how this will end up, but the law of unintended consequences says college sports across the board will be very different in the next couple decades.
 

Kabby

HR All-American
Gold Member
Aug 21, 2002
3,024
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Scholarships are taxable other than the tuition part. NIL is definitely taxable if it’s reported.
If you are giving someone NIL money do you need to send them a 1099? You would think so