Because they (theoretically) serve a charitable educational mission with their respective schools, college athletic departments … are considered nonprofits — a major reason the NCAA clings to the outdated, immoral concept of amateurism, and that big-time football coaches such as Texas’s Mack Brown earn $5 million-plus per season. (When you don’t pay the workforce because you’re technically not a business, all that television money has to go somewhere.) Postseason bowl games enjoy the same hands-off treatment from the IRS, with predictable results: Sugar Bowl CEO Paul Hoolahan earns $645,000 in total yearly compensation; Outback Bowl — Outback Bowl! — CEO Jim McVay eared $808,000 in 2009; former Fiesta Bowl CEO John Junker collected a $592,000 annual salary before the fallout from a scandal involving a $33,188 self-celebrating birthday party, a $95,000 round of golf with Jack Nicklaus and $1,200 strip club visits on the company’s (tax-deductible!) tab led to his firing.
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UD thanks Daniel.
December 17th, 2012 at 3:41PM
I don’t think this hangs together. Executives of taxable entities are often compensated better than those at non-profits; and non-profits pay their employees. Furthermore, the compensation of college athletes, though restricted in form, is comparable in value to what minor leaguers (which is what they would be, if pros) get in any sport. As the great majority of athletic programs lose money, the proposal implied here would tax the athletes but not the programs.
What has happened in college football is that popularity on TV brings big-league dollars to minor league programs; the surplus value is created primarily by the university affiliation and only secondarily by the players (sorry, Karl). A really successful coach at a big-time program can capture a disproportionate share of these profits for his program/institution, justifying a large paycheck.
The only way I can readily imagine this changing, in the real world, would be an anti-trust action against the NCAA for fixing athletic scholarships.