As we start a new year, it is always fun to see how things change as we enter the new year. One thing that will change for most people is their taxes. And one of those tax changes that will impact sports is that “donations” that are required to buy tickets are no longer tax deductible. (you can listen to a marketplace story here)
I have always had a hard time calling anything required to purchase a product a donation, thus I am not surprised by the change and think it was both appropriate and likely. However, the interesting question is how will college athletic departments be impacted by this change? Do we think the “donors” will absorb the difference, or will athletic departments have to cut their budgets by the difference? I have a feeling the pre-ticket cost (formally called the donation) will likely have to be cut.
However, in the podcast they say that the big time sports (Football and Basketball) will not see an impact, but the small Olympic sports (like swimming) will. What? I must be missing something, I have been involved with swimming for a long time; are there any schools that make you donate to get tickets to these events? I cannot think of any and if there are, they are few-and-far-between. Having said that, I do not think there is much room for an impact on those sports. I expect the impact to be the big sports, where the big “donations” gave a big tax break. Without the big tax break, the willingness to pay will be falling.