The Tax Exempt Status of the NCAA

Lost in the current sex scandal on capital hill is a news report that lame duck Representative Bill Thomas (R-California) sent a letter to NCAA President Myles Brand this week asking him to justify the tax exempt status of the NCAA. Thomas, who announced last Spring that he will not seek re-election, lists all the usual NCAA excesses: million dollar salaries for coaches, billion dollar TV contracts, and the commercialization of intercollegiate athletics. Preliminary statements from the NCAA also toe the party line: amateurism. A spokesman for the NCAA remarked “We educate student athletes; they are students first.”

I am generally skeptical about any pronouncement from capital hill around election time. I also wonder how the tax exempt status of intercollegiate athletics can be challenged without also calling into question the tax exempt status of institutions of higher education. Couldn’t the same logic be applied to gift shops operated by museums ? Why isn’t the House Ways and Means committee concerned about the outrageous markups on Vermeer prints sold at art museum gift shops?

Thomas has requested a response to his inquiry, including data on revenues and expenditures for Division I football and men’s basketball programs, by the end of the month. Stay tuned.

(HT to my graduate student, Brian Soebbing)

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Author: Brad Humphreys

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