AD? Make that LLC instead
- Thread starter theshadow
- Start date
So the athletic department would no longer be a part of the university or the state? Don’t they get legal protection being an entity of the state? And more importantly, if they aren’t apart of the university, won’t the students vs contractors vs employees be a bigger issue to deal with?
That depends. I have a lot of business clients (mainly construction) that utilize contractors instead of hiring employees.
They are probably betting that donors will continue to give whether they get a tax deduction or not, and that the new revenue streams afforded by being an LLC will far outweigh any donors lost due to not getting a tax deduction. Interesting strategy.
Agree, but also, LLCs can be non-profit or not-for-profit. Our TKD school is a NFP LLC. They might weasel their way towards some kind of fig leaf for non-profit so contribs can be tax deductible. Or they could set up some other 3rd entity that would be NP to funnel funds to only certain more clearly charitable items.
Or businesses just make their “donations” by buying advertising.
Heard there was an accounting firm that kept writing checks to the dance squad and marking them as custom work.
What's the NCAA gonna do about it when SEC/Big Ten say they're doing it?
How does this affect title 9 with them? Can they ditch some women’s sports since it would not be part of the University? Hope this does not clear a path to get rid of some women’s sports. Then again I don’t know how all of this works
I’m surprised more are not doing this
The product is the university’s NIL, so to speak.
Investors buying the long term rights to those, signed over to a LLC, and aggregating enough of the top brands, is how we get to a Superleague
It's an interesting move and I'm sure it has far reaching implications as people have pointed out.
But if a University is going to spin off its Athletic Department into an LLC my guess it's still going to be branded Kentucky Wildcat basketball and play in university funded facilities. Will the University charge for the use of the facilities and whose responsible for capital improvements. I'm guessing the LLC would have to lease from university.
If a school is going this far, why wouldn't the university sell off its basketball and football programs to Private Equity and receive either upfront or annual royalty payments for using Kentucky Wildcat brand. Plus set up a stadium/arena leases. Using both revenue streams to fund UK general budget items.
But if a University is going to spin off its Athletic Department into an LLC my guess it's still going to be branded Kentucky Wildcat basketball and play in university funded facilities. Will the University charge for the use of the facilities and whose responsible for capital improvements. I'm guessing the LLC would have to lease from university.
If a school is going this far, why wouldn't the university sell off its basketball and football programs to Private Equity and receive either upfront or annual royalty payments for using Kentucky Wildcat brand. Plus set up a stadium/arena leases. Using both revenue streams to fund UK general budget items.
Apparently this isn’t unique. Kansas State’s AD is apparently in a corporation.
I think part of it will depend on the operating agreements of the LLC.
And for clarification a not for profit can be the owner of a for profit LLC. For example many fairgrounds in Iowa are not for profits and then own a separate LLC for other interests such as running the racetrack on the fairgrounds
No shock here with shabby journalism, but the key item is who are the shareholders, managing members,etc. of the LLC? I assume it will be the U of K. It it's an outside shareholder, than this brings a host of many other questions.
That needs to be answered before any other strategy can be determined.
That needs to be answered before any other strategy can be determined.
Mostly the tax treatment of profits and dividends, but i am sure there are other differences as well.
