NCAA- Supreme Court ruling

Mr Janny

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Of course, they are allowed to have employees and those employees provide services that facilitate the University's non-profit academic mission. But when you pay students beyond FCOA schollies as W-2 employees solely for their athletic talents, that tax exempt status will surely come into question.
What's the basis for that assertion that it will "surely come into question", though? Do you have any examples of organizations losing tax exempt status for similar reasons?

As far as I can tell, there's nothing in the IRS code that ties university tax status to athletics. If I have missed something, I'd be happy to see it.
 
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Clark

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The IRS statue never contemplated the idea that Universities would be paying student-athletes as W-2 employees for their athletic services. If Universities are somehow (and wrongly) forced into doing so, the non-profit status of the entire University will come into question, not just their ADs.
Did you know that until very recently the NFL was a tax exempt organization and only changed to for profit for public relations reasons? Did you know that exempt organizations very often have for profit activities that they do actually pay tax on? (common example would be a bar owned and run by an American Legion organization) Let's use an example from a different (but very lucrative) industry: do you think the University of Iowa's non profit status is threatened because of the childrens hospital?

I'm not sure where you're getting your information at but you are incorrect.
 
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cykadelic2

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But that principal doesn't hold water if the employees are also the product that the job provider is selling. The job providers (colleges) are reliant on the quality of employees that the can acquire in order to put the best possible product in front of consumers, and more importantly, advertisers.

It doesn't help that college athletics is not an open market, especially for football. It has become a protected monopoly that has been able to suppress employee compensation with the excuse of "amateurism". There is no other viable path for a player to reach the NFL than by participating in the college, but those players are also not allowed to seek fair compensation for their labor and the product that they put out.

And we have seen over the last few years more and more players opting out of the college post season because the benefits do not outweigh the risk. The highest profile example being Nick Bosa, who, after an injury withdrew from Ohio State 3 games into his junior. He had already established the value he could bring at the NFL level, and it became more prudent to skip the remainder of the season thank risk more serious injury.
How has college FB become a protected monopoly? I am not aware of any legal restrictions for a new professional FB league to be created that would recruit and sign HS prospects. And while I am in favor of unlimited NIL compensation to athletes (as long as they aren't used solely as recruiting inducements without any athlete services rendered), any court or other organization calling for college athletes to be paid as W-2 employees are full of crap for this reason.
 

heitclone

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Great question. No idea really.

The only thing that seems reasonable to me is to split the revenue from each sport to the athletes in each sport. Auburn's women's rowing team doesn't have a $50M locker room, so there must be some exception/process that makes that possible.

If they don't allow that, and all the football revenue has to go to everyone, you might see a lot more kids getting pushed into equestrian, fencing, and track lol.

Take ISU as a rough example. Let's say $10M of the CFB TV money gets thrown into a pool for the athletes. If it goes equally to the football players only, then that's roughly $150k each. If it gets equally to all the other athletes, then it's maybe $25k each? These are rough numbers, I am just wagging it.
Why is it fair for a swimmer to profit off of what the football team does? How is that fair to the fb players? Why should athletes in sports that do not make a profit benefit when they have no impact on that money being made? It doesn't seem there is a fair way to do this and still comply with title 9.
 
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Clark

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Why is it fair for a swimmer to profit off of what the football team does? How is that fair to the fb players? Why should athletes in sports that do not make a profit benefit when they have no impact on that money being made? It doesn't seem there is a fair way to do this and still comply with title 9.
well that's just it, title 9 was never meant to be fair, it's meant to be equal.
 

theshadow

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What's the basis for that assertion that it will "surely come into question", though? Do you have any examples of organizations losing tax exempt status for similar reasons?
Roll up the "Jump to Conclusions" mat for a minute. There's a chasm between raising questions and loss of exempt status.

The tax-exempt status of college athletics, in its current format and system, has repeatedly come under scrutiny. So far, nothing has come of it. However, it's logical to assume that if the athletes effectively become wage/salary employees, there will be more scrutiny. Would that sea change be enough to lose the exempt status? Maybe, maybe not.

But at the very least, questions will be raised.
 
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isufbcurt

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The IRS statue never contemplated the idea that Universities would be paying student-athletes as W-2 employees for their athletic services. If Universities are somehow (and wrongly) forced into doing so, the non-profit status of the entire University will come into question, not just their ADs.
What your saying doesn't make any sense.

Girls Scouts is a not for profit they pay W2 wages to employees and summer camp counselors.
Planned Parenthood is a not for profit and pays their employees.
The NCAA is a not for profit and they pay their employees
The various conferences are not for profits and pay their employees

I can go on all day
 

isufbcurt

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Of course, they are allowed to have employees and those employees provide services that facilitate the University's non-profit academic mission. But when you pay students beyond FCOA schollies as W-2 employees solely for their athletic talents, that tax exempt status will surely come into question.
That's not how the tax exempt status works. It really have nothing to do with "employees" and more to do with the mission of the organization.
 

cykadelic2

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What your saying doesn't make any sense.

Girls Scouts is a not for profit they pay W2 wages to employees and summer camp counselors.
Planned Parenthood is a not for profit and pays their employees.
The NCAA is a not for profit and they pay their employees
The various conferences are not for profits and pay their employees

I can go on all day
You obviously missed Post #79
 

cykadelic2

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That's not how the tax exempt status works. It really have nothing to do with "employees" and more to do with the mission of the organization.
......and the mission of Universities doesn't include paying athletes as W-2 employees solely for their athletic talents.
 

isufbcurt

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......and the mission of Universities doesn't include paying athletes as W-2 employees solely for their athletic talents.
Their mission is to provide educational opportunities which is accomplished by having athletic teams.

Is the mission of the Girl Scouts to teach girls how to sell cookies? No selling cookies brings in revenue in order for them to finance the mission of "Girl Scouting builds girls of courage, confidence, and character, who make the world a better place."

You really are thinking to hard about this.

I don't agree with paying athletes but it has nothing to do with tax exempt status.
 
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nfrine

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Some of the comments left my jaw open. Though the decision was limited, the door has been opened to more wide spread changes. The future of college sports, IMO, lies in the ability of the NCAA to maintain 'fairness'. Which, has been dealt a severe blow. If, as expected, college athletes start to command salaries, the entire college landscape will significantly change. We're fortunate the internet can better regionalize interest. But I see a splintering of divisions with only the wealthy institutions being able to compete. The media market will determine these favoring urban schools and leaving rural schools to fight more aggressively. This is a sad state. The courts only uphold laws. So, the blame squarely falls on our lawmakers for not establishing different competition laws for educational institutions. But, hey. It is what it is.
Basically saying the price of seats is going to have to increase dramatically.
 

cykadelic2

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Their mission is to provide educational opportunities which is accomplished by having athletic teams.

Is the mission of the Girl Scouts to teach girls how to sell cookies? No selling cookies brings in revenue in order for them to finance the mission of "Girl Scouting builds girls of courage, confidence, and character, who make the world a better place."

You really are thinking to hard about this.

I don't agree with paying athletes but it has nothing to do with tax exempt status.
See Post #86
 

alarson

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Why is it fair for a swimmer to profit off of what the football team does? How is that fair to the fb players? Why should athletes in sports that do not make a profit benefit when they have no impact on that money being made? It doesn't seem there is a fair way to do this and still comply with title 9.
I think part of the problem here is that people assume the athletes are responsible for the revenue.

The value of college sports are 99% based on people's connection to the university. If the top 10% of college athletes all went off and played professionally in a new league next year, college sports would make about the same it does now. The competitiveness would remain roughly the same, just at a lower performance level. But the people who care about seeing the best possible athletes are pro fans over college already. There's a reason the g-league, a league that itself is probably the top 1% of college players, has had such low salaries. The remaining 99% have a market value even lower than that.

Of course, a lot of people have bought into this because ESPN has pushed it. ESPN knows where this will head. This will destroy college athletics for all but a smaller number of super-elite teams, which is all ESPN really wants to cover anyway.
 

chadm

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If tax exempt status was lost, does anyone think the Athletic Department would pay any taxes with the way the tax code is currently?
 

NorthCyd

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Universities pay students. I was a grad student and I'm pretty sure my first year of grad school I was an employee and received a wage for being a TA and LA. After my first year I received a fellowship that payed me a stipend, but I am pretty sure I was a university employee my first year of grad school. I also worked for the university as an undergrad as an LA and was definitely an employee of the university then. While I'm a student if I can be an employee and get payed to teach students or work in a lab, why can't I get payed to play football?
 

Angie

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If it is a pay-for-play situation, does that mean it is a situation where players follow the same rules as any other employees? Can they get "fired" - beyond just benching them, can their scholarships and "salary" be taken away for bad performance or personnel issues? Iowa has the right for employees to quit at any time, or for employers to terminate at any time. Is there any extra protection for students in this scenario, or do they just lose all of their livelihood? Can they just leave at any time mid-season to go to a school with a better offer if they are performing well?
 
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randomfan44

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The IRS statue never contemplated the idea that Universities would be paying student-athletes as W-2 employees for their athletic services. If Universities are somehow (and wrongly) forced into doing so, the non-profit status of the entire University will come into question, not just their ADs.
Iowa State University has more than 9,600 employees that are paid for their services without affecting the university's non-profit status. This is utter nonsense.
 
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