Boyce Watkins on the latest Michigan scandal.

… One can hardly blame Michigan Coach Rodriguez for pushing the players too hard, since universities make it clear that winning percentages matter far more than graduation rates. The University of Kentucky’s decision to pay nearly $30 million dollars to John Calipari, a coach known for both corruption and a lack of academic integrity, sends a message about the importance of winning games over educating athletes.

We know that corruption rolls down hills and at the bottom of this pile are the players, their families and the entire African-American community. NCAA athletes in revenue- generating sports are typically kept in special dormitories, forced to live on rigorous athletic schedules, and pushed to place football ahead of everything else. All the while, the administrators on central campus, as educated as they are, turn themselves into unenlightened blind mice when confronted with the reality of athletic exploitation.

… Massive reform is needed not only within the Michigan football program, but also within all of college sports. Congress must step in and challenge the NCAA for anti-trust violations, as well as its tax-exempt status. NCAA revenues during March madness rival that of the NFL and NBA, so it’s time to note the NCAA for what it truly is: a professional sports league that artificially restricts the wages of its employees…

Now, now. You think the fun’s going to be over, don’t you? You won’t be able to give your coach five million dollars a year and each of your assistant coaches 2.5 million dollars a year; and there’s also that thing, in the proposed tax bill, about no more humongous tax deduction on that humongous donation you give a university for the right to purchase humongously overpriced season tickets.

[I]n 1988, Congress added subsection 170(l) to the IRS code that specifically allowed for an 80 percent deduction on donations to “institutions of higher education” that granted “the right to purchase tickets for seating at an athletic event.”

“Every time I think about it, I want to throw up,” [says tax law expert John D. Colombo]. “The effect of this exemption in the tax code is that my money, as a taxpayer, is going to help some guy be able to sit on the 50-yard line.”

These tax experts have jumpy stomachs. Most of us instinctively understand the educational and charitable urgency of tax-exempt bonds to subsidize new football stadiums (the new tax bill’s gunning for that one too), tax-free multimillion dollar compensation for coaches, and 80 percent deductions for 50-yard line sitting…

I mean, sure, everyone knows that “These [university athletic] programs are not consistent with underlying theories of exemption, and in fact are perfect examples of why commercial revenues of charities should be subject to taxation.” But boys will be boys, and boys write rolling around in the dirt concussing your head legislation; and no one is more surprised than ol’ UD that a bunch of Republican boys are actually sounding semi-serious about doing away with the fun…

But seriously – as opposed to semi-seriously – if you think any of these proposals will go anywhere, you also thought the University of North Carolina would be punished for twenty years of fake courses.

… is the spectator sport.

Here’s a tax-exempt organization that does little other than make the world safe for big-time university athletics corruption (note its president’s hard-hitting response to the Education Secretary’s latest proposal about the droves of basketball players who don’t graduate).

Ralph Nader’s proposal to eliminate athletic scholarships and replace them with need-based money was a great opportunity for the NCAA to, say, reject the idea as overbroad, but express understanding of the motivation behind it, given the corrupt and destructive nature of much big-time university football and basketball.

Instead, the NCAA did another cynicism number. If the response to government officials wanting to reform a university-based system that fails to graduate huge numbers of high-profile athletes is to say jackshit about it and move on, the response to someone like Nader is to pull out all them nice girls on the swim team who graduate one hundred percent and you better believe it baby! Why is that mean man going after them nice girls?

The 145,000 student-athletes who receive athletics related financial aid each year are in fact students first — as evidenced by the fact that in almost every demographic they graduate at higher percentages than their counterparts in the general student body. …[T]hey are students, just like any other student on campus who receives a merit-based scholarship.

Don’t talk to me about football and basketball! Let’s just put all the athletes together into one big 145,000-person pile and note that most of them graduate! How unfair to pull out of that pile the few who play … What did you say? Which sports? … Oh yeah. Football and basketball. Why the obsessive focus on those sports? They’re just like any other…

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Why is the NCAA so cynical?

Because it works. No one, Mencken wrote, ever went broke underestimating the intelligence of the American public.

… runs the headline at Business Week, and this one’s worth unpacking a bit.

Almost all of the colleges and universities University Diaries writes about are non-profits. They exist not to generate money for investors, but to educate people. They need enough funds, of course, to operate on as high a level as possible; but because their primary function involves a public good – enhancing the knowledge and skills of people – they receive various and significant state and federal government subsidies and tax exemptions.

Public institutions, like Berkeley, some of whose students and faculties have taken to the streets in protest against
state cutbacks (today, March 4, is a Day of Action, and a number of large rallies representing many public schools are expected), and private institutions (even insanely rich ones like Harvard), both receive all sorts of tax breaks along with government financial support.

The furloughs Mr UD and his colleagues at the University of Maryland have experienced, and the many other signs of institutional strain that this blog has noted at virtually all American universities, have of course to do with varying degrees of withdrawal of government funds from schools under the pressure of a bad economy.

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Because our taxes support non-profit universities, we have a stake in making sure these places don’t use our money to give their presidents millions of dollars, or, like Harvard, to hoard massive endowments. Likewise, we have an obligation to keep an eye on the tax-exempt NCAA and tax-exempt universities with Division I-A football and basketball programs (indeed, many people now argue that the NCAA and these sorts of campus sports programs should lose their tax exemption).

My point is that all sorts of goodies, subsidized by the American taxpayer, come to universities, and universities expect (should expect) some level of government scrutiny (think too of Senator Charles Grassley’s many letters of inquiry to universities about possible conflicts of interest in their medical schools) and citizen scrutiny because of this.

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Things start to get muddy when we turn to America’s burgeoning for-profit university industry.

For-profits aren’t bound by the non-profit ethos which says that our primary goal is to enhance the public good. For-profits are for profits. They’re doing what they do primarily to yield as much money as they can for investors. Because of this, the for-profit story, as UD has chronicled it over the course of this blog, has featured the sort of scandals you’d expect: Brazen recruitment of any student with a pulse, almost exclusively online curricula, and a practice of lying to recruits about graduation rates and job placements. One firm “paid a $6.5 million settlement in July 2007 to the California attorney general’s office, over allegedly misrepresenting graduates’ job placement rates and salaries. It also agreed to cease enrolling students in 11 programs at nine campuses.”

Now keep in mind that for-profits get massive federal support too. Typically over eighty percent of their revenue comes from you and from me.

So let’s go back to the headline on the Business Week article: Your Taxes Supporting For-Profit Firms as they Acquire Colleges.

How does that work?

Let’s start here:

A 2006 regulatory change fostered online growth and made takeovers more attractive… That year, Congress eliminated a rule prohibiting colleges that offered more than half of their courses online from receiving federal financial aid.

Well, this blog ain’t keen on online – UD calls it the poor white trash of education – but, you know, that’s just me. Congress loves it, and has made it easier for you to make an entirely online university. (I know. Diploma mills have been at this for years. Whole other subject.)

Anyway. Okay. So you can now make a really low-cost, really profitable university. Zillions of students all over the world, a few professors doing a lot of typing (How many students does each online class contain? I dunno. A thousand?), very little physical campus to maintain… You get the picture.

But – Did I say diploma mills were a whole other subject? They’re not really. You need to differentiate yourself from them, and that means real accreditation. Which is where we reenter the Business Week story:

ITT Educational Services Inc. paid $20.8 million for debt-ridden Daniel Webster College in June. In return, the company obtained an academic credential that may generate a taxpayer-funded bonanza worth as much as $1 billion.

ITT Educational, the U.S.’s third-biggest higher education company with a market value of $3.8 billion, may increase it by 26 percent, or $1 billion, within five years because of the purchase of 1,200-student Daniel Webster in Nashua, New Hampshire, according to Michael Clifford, an investor in Del Mar, California, who has participated in the acquisitions of four nonprofit colleges. At least 75 percent of new revenue would come from access to the more than $100 billion a year in financial aid the U.S. hands out to college students, he said.

Key to tapping that money is Webster’s regional accreditation, which is the same gold standard of academic quality enjoyed by Harvard University and helps students transfer course credits from one college to another. Daniel Webster’s accreditation was its “most attractive” feature to ITT, said Michael Goldstein, an attorney at Dow Lohnes, a Washington law firm that has long represented the company.

“Companies are buying accreditation,” said Kevin Kinser, an associate professor at the State University of New York at Albany, who studies for-profit higher education. “You can get accreditation a lot of ways, but all of the others take time. They don’t have time. They want to boost enrollment 100 percent in two years.”

Let’s look more closely at what you’re getting as a student here:

The cost of attending an ITT Technical Institute, including tuition, fees and off-campus room and board, was $26,775 in 2008-09, according to the National Center for Education Statistics. Of students who entered ITT’s two-year schools in 2004, 29 percent graduated. ITT derived 70 percent of its 2009 revenue from federal financial aid, according to a company filing.

Wow. Where do I sign up? You get to pay Harvard rates for flunking out of a little-known academic institution. Plus, our taxes are paying for seventy percent of the school’s revenue!

Is our government watching out for us here?

The scrutiny these new for-profits get

“doesn’t remotely satisfy the sloppiest of due-diligence requirements,” said [Barmak] Nassirian of the American Association of Collegiate Registrars & Admissions Officers. “There is no methodical review of who has bought the college. If the Cosa Nostra applied, you would think you’d take a look.”

But the Department of Education is on it, man!

The U.S. Department of Education, which doled out $129 billion in federal financial aid to students at accredited postsecondary schools in the year ended Sept. 30, is examining whether these kinds of acquisitions circumvent a federal law that new for-profit colleges can’t qualify for assistance for two years, Deputy Undersecretary of Education Robert Shireman said in a telephone interview.

Under federal regulations taking effect July 1, accrediting bodies may also have to notify the secretary of education if enrollment at a college with online courses increases more than 50 percent in one year.

“It’s an area that we are watching closely,” Shireman said. “It certainly has been a challenge both for accreditors and the Department of Education to keep up with the new creative arrangements that have been developing.”

Kind of reminds you of the SEC when it was run by Bernie Madoff, doesn’t it?

The writer, Brian Cook at The Sporting Blog, explains how the NCAA handles the criticism that it’s the most profit-driven non-profit this side of Harvard University.

When its greed becomes so rank that the national legislature smells it and starts threatening to take away its tax exemption, the NCAA shifts from, as Cook says, its basic money money money orientation to a we’re all about educating America’s kids orientation …

Amazingly, this approach continues to work, even in the face of a system that schedules farcical football games like the one coming up between the University of Florida and Charleston Southern. Point spread: 73 points. Why does Charleston Southern do it?

Two reasons.

One, as Ron Morris points out, Florida will pay Charleston Southern $450,000 to play with it.

Two: It’s an act of God. “There’s a lot of parallels you can use with regard to faith, and for us to be in this position [the speaker is Charleston’s coach] is an act of God, first and foremost.”

What sort of loving God would allow that point spread?

At one time, trading a scholarship for athletic performances made sense. There wasn’t much money available in college sports even in the revenue producing sports of football and basketball. But as TV money seeped into the industry, coaches were paid more and more money and colleges felt they needed to spend more money to get the best available coaches to recruit and instruct. State legislatures approved astronomical raises for coaches and in many states where public colleges are part of the college sports industry, the football or basketball coaches are the highest paid public employees… Millionaire coaches like Syracuse’s Jim Boeheim bristle at the idea of paying college players even though the industry is flush with money from television and marketing partners…

College sports are not-profits. The industry has a blanket antitrust exemption that allows schools who play in college football bowl games to skip paying taxes from bowl game earnings. Yet NCAA members are getting billions from TV, and hundreds of millions alone from the Final Four weekend. At the same time, players are no longer content with missing out on their earnings. Dr. Harvey Schiller may have predicted the future for the industry, becoming a professional entity because there is too much money at risk for it not to happen.

The professionalization of our academic McDonalds (billions and billions sold) continues, with increasingly insistent arguments being made against the maintenance of non-profit status for athletics money, and for endowment money. Because it’s the same thing, isn’t it? Athletics and endowment?

If Harvard University generates a thirty-five billion dollar endowment (a number of other Ivies are not far behind), all of it in very significant ways protected from taxation… And if because of this astronomical profit people like Harvard investment managers get multiple millions in salary each year from the institution, and people like coaches get multiple millions in salary each year from the institution, but very little of the billions left over are spent for academic purposes (Harvard notoriously hoards its endowment; revenue sports players aren’t paid), why should we be surprised that communities surrounding McDonald’s schools are constantly challenging their tax exempt status in court? That Felix Salmon’s much quoted statement has it that Harvard is “a hedge fund with an educational institution attached“?

All of this is a small element of the immense income inequality debate in America today. CEOs like Gilead’s John Martin taking home almost $100 million each year are the real attention-getters in this debate. Yet America’s John Martin problem is a straightforward one: It is about capital markets and unlimited greed. Easy to grasp that.

And of course most of the people in this country have no trouble – applaud, in fact – one man or woman pulling in any amount imaginable for themselves. Ten years from now, Martin’s yearly compensation with be five hundred million. Bravo! Job well done. No upper limits, and people who question upper limits are jealous losers who have to be restrained by the state or the next thing you know it’s Kristallnacht.

Fine, okay, but does the same psychology pertain to high-minded non-profit universities becoming greedy billionaires? Even in America, there’s some vestigial sense that universities are different from John Martin. That sense could grow, could come to understand itself more clearly. And if that happens, there’s trouble ahead for the most profitable McDonald’s franchise-holders in the land.

Seriousness and tax exemption – the two essentials of our universities – are closely aligned. If the first (the philosophical foundation) vanishes, the second (the financial foundation) will be imperiled. If any particular enterprise with university in its name loses its seriousness, as expressed in a scholarly atmosphere, a liberal arts curriculum, and the training of students for higher study and for jobs, state legislatures and citizens will begin to question the special forms of financial support (there are many besides tax exemption, of course; tax exemption is shorthand for them all) they are providing. Politicians will appropriate less and less money; alumni will offer fewer and fewer donations. Eventually, for the worst among our universities, students will stop applying, which is already happening at South Carolina State University and elsewhere.

Simply put, if it’s impossible to detect more than a token amount of academic activity on a university campus – if the place is not serious – people are eventually going to withhold the designation university from that campus, and the money benefits that sustain it are also going to be withheld.

Thus when Holden Thorp, sports-battered ex-chancellor of the University of North Carolina, says

“Either we put the ADs back in charge and hold them accountable if things don’t work […] or let’s be honest and tell everyone when we select (presidents) to run institutions that run big-time sports that athletics is the most important part of their job.”

he is warning American universities that they are running out of seriousness. He is signalling to all of our schools that the management of sports events – and the management of their attendant activities (crimes committed by athletes; destruction caused by drunken tailgaters; constant buyout and other lawsuits running into the hundreds of millions of dollars; endemic cheating; deals with distilleries for the sale of alcohol to students; ceaseless scandals costing the school millions in damage control and personnel replacement, etc.) – has become virtually the entire job of the university president. But this group of activities does not describe a university president. It describes an athletic director. The person who manages the dispensing of fifty million dollars – the amount of money the Sandusky scandal has so far cost Penn State – to lawyers and public relations people is not – and, as Thorp makes clear, should not be – a university president.

This person should, of course, be an athletic director. Eventually, many American universities will have athletic director presidents – people who manage sports, and also manage, in their spare time, whatever few academic issues crop up.

Having athletic directors as university presidents makes all kind of sense. The UNC scandal wouldn’t have happened at all if an AD had been president, since academic misconduct from the point of view of an AD is… what? What is that? The AD doesn’t even know what it is, so whatever happened in the Afro-American Studies department at Chapel Hill is … whatever. Price of doing business. Way to stay in the game. Once the AD has real control over what goes on in the school, scandals won’t surface because they won’t be scandals.

Under the President Athletic Director regime everyone will be happy.

But this bliss cannot last. Eventually more and more people will realize you’re not a university, and you’ll have to take that word out of your name and get your funding from ticket sales.

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Meanwhile more and more schools at the moment have a Gordon Gee situation on their hands. Gee was a puppet intellectual (bow ties, spectacles) trotted out to mouth serious things, to keep the seriousness ball in the air.

Ever wonder why Gordon says such crazy shit? Babe, you don’t need a Freudian to know which way the wind blows. This is an angry puppet, a self-hating hypocrite, a man who used to have intellectual self-respect and now trades it every day for football money. Gordon Gee is a stage in the devolution of the American university president, a halfway point between mind and body, seriousness and play. His extinction will pave the way for President Nick Saban.

David, a UD reader, sends UD this opinion piece in the Wall Street Journal. It’s strong-minded and well-written, but it’s up against the same problem everyone writing about Penn State is up against.

The entire complicated, powerful, wildly popular, and unimaginably lucrative system of university football is corrupt — morally degenerate, criminally sordid. Forget academic fraud and university-specific stuff like that. Academic fraud is endemic, of course, but that’s a trifle here. When people like the WSJ guy talk about “shining a harsh light, and building the whole thing over, the right way,” they’re talking about revolutionizing a culture – a culture of massive university-sponsored alcohol sales to students, routine post-game riots and campus-trashing after tailgates, Mondo Cane-style coach-deification (after Penn State pulls down Uncle Joe’s statue, you can worship at Saint Saban’s), total subordination to television stations and naming-rights banks…

En effet, mes petites, it can’t be changed. That’s why the harshest critics of it resort to comedy, as in the hilarious yearly Fulmer Awards for the team with the most arrests among its players. A joke is an epigram on the death of a feeling, said Nietzsche, and all the smartest critics of college football and basketball are jokesters. They’re way past feeling anything about it. Do you think Italians at this point do anything other than tell each other jokes about the mafia? University football and basketball have settled in, and if you don’t believe me, look at the guy running the biggest joke of them all – the NCAA. Scroll down for the skinny on Mark Emmert, aka “top stooge.”

No, look. J’adore Barack Obama, but he’s a mad jock. Say we get Romney next — Mr Olympics. Ahnold’s trying to repair his marriage to Maria so he can run. (I know – citizenship problems there.) Look at the Senate, for chrissake. We can’t even remove the tax exemptions these educational activities enjoy. Luxury boxes are exempt.

From the little freshman fan in the cheap seats to the President of these United States, everyone’s slobbering and panting for grander Godzillatrons and stronger steroids. Everybody’s hyped up. School spirit. When you feel it, you give money to the sports program so the school can be even more of a jock joke.

The WSJ guy is right – it’s a culture. It has many, many moving parts, and they mesh wonderfully. It’s way past anybody fucking with it in any serious way.

… is totally worth a read. Garvin summarizes the pay college athletes argument:

The sky’s the limit [on salary]. And they shouldn’t be distracted by having to go to class, either, or even having to read or write.

He crunches the numbers colleges will need to anticipate:

The average NFL player’s salary, Bloomberg Businessweek magazine reported earlier this year, is about $1.9 million. If colleges wind up paying even a tenth of that — a lowball guess — that means that the University of Miami football team would need a payroll of $16 million just to cover the 85 scholarship players the NCAA allows. (Though, if we’re doing away with the requirement that players be able to write their own names, I don’t know why we’d be nit-picky about silly things like roster limits.)

UD‘s laughing out loud here.

And don’t forget taxes!

Right now college athletes don’t pay taxes on their scholarships because their schools sports programs are tax-exempt. But once you start paying the players (and especially if all pretense that they’re getting an education is dropped), the IRS will certainly want its cut. And that will include the value of the scholarship in addition to whatever salary they’re getting paid. A year at UM costs about $55,000 these days; at current tax rates, that means a UM football player would be around $12,000 in hock to the IRS before accepting another cent.

As you recall, we will gather this August in retreat, for one brief moment, far away from the busy bustle of the outer world, to think on our sins and, in sincere repentance, get them hence.

Are there scoffers? Naysayers?

[University sports corruption is] such a point of concern for Mark Emmert that he has convened a retreat for NCAA leaders in August to discuss the problem, play golf, and receive backrubs. The backrubs will be exquisite, and the results of the conference will be hey did we mention backrubs and golf? Seriously, backrubs and golf. That’s really worth the trip alone.

This is the voice of the devil. Do not heed him! The devil wants to banish tax exemptions from luxury boxes and cap what Kentucky can pay John Calipari. Do not heed him!

Gather, instead, with goodly folk like Brother Tressel, and think on how we can make our fellowship yet purer in the sight of God.

… and as UD now always says, I beg to dinner. I beg to dinner with the following Cam Newton commentary by Jake Simpson. My begging to dinner appears in brackets, and in blue.

Like any multibillion-dollar enterprise (or political machine), college athletics doesn’t just rely on its core constituency. It needs the support of its undecided voters — casual sports fans who follow their alma mater religiously and tune in to games when they’re bored on Saturday afternoons. Diehard college football fans are almost necessarily jaded (hello, BCS) and will probably accept Newton’s crimes (if proven true) the same way they accepted the news that Bush had accepted $290,000 in gifts from sports marketers while at the University of Southern California. But if an athlete is accused of flouting the rules of college football by multiple sources, doesn’t address the allegations, wins the Heisman and the national championship while the NCAA investigation plods along, and then escapes to the NFL a couple months ahead of news that yes, he did demand “pay-to-play” deals from prospective colleges, well… let’s just say a lot of casual fans may care whether the game has even a veneer of integrity.  [No they won’t.  I mean, they’ll care a little, but they won’t change their behavior.  Know why?  Because mayhem and rule-breaking are part of the charisma of sports, college and professional.  Men who worship sports are, among other things, worshipping the shits they themselves can no longer be.  These men used to be bad.  Now they’re in the grip of domesticity and corporate employment.  Aggression and loutishness aren’t in the picture for them anymore.  But they remain guys, and they miss those things.  They are not anxiously eyeing the game for veneers of integrity; they’re leaning back in their easy chair and reassuring themselves that even a very advanced culture reserves its highest rewards for the most basic male behavior…. Read Civilization and Its Discontents, for goodness sake.]  [And what does this mean?  It means Simpson’s not only wrong.  He’s exactly wrong.  What he argues is the opposite of the true deal.]

And like any corrupt political machine, the NCAA needs to avoid the wrath of big government. Congress may have infinitely better ways to spend its time, but if California Congressman Darrell Issa really follows through on his pledge to have seven House investigations a week, 40 weeks a year, don’t you think a look at the inherent corruption in college athletics could be among the 280? The NCAA is already facing a potential legal challenge from Utah’s attorney general over the BCS, and it cannot afford to get in any more Congressional hot water.  [Even wronger.  Congress is almost all men.  The new Congress has more yahoos than ever.   Representatives represent the guys I just told you about.   Congress has never gotten anywhere near sanctioning the NCAA on anything, including the notorious absurdity of its tax exemptions…. Same principle here as in my first point:  The idea is to maintain a cultural preserve within which bad guys get away with things.  Until people realize that the moron who stood up during that speech the President gave to Congress and shrieked YOU LIE is a hero to millions of people, they will never understand university football and basketball.]

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UPDATE: These views may be a tad controversial. Let me add a couple of things to clarify.

1. The philosophy of gender underlying these remarks is perhaps best exemplified by the work of Dina Martina, here. Note the expression first of female, and then male (starting at 2:11), behavior.

2. I do not call for an end to football and basketball and other aggressive sports. Not at all. I just don’t think they belong, in their present incarnation, in self-respecting universities.

… seems to be losing patience with big time university sports.

… Amateur college athletics is now an oxymoron in full bloom… There isn’t a not-for-profit bone left in its body except for the tax-exempt status it somehow continues to maintain with the IRS despite raking in billions of dollars through television contracts, ticket sales and merchandise sales…

Of course the NCAA itself needs to lose its tax exemption. The whole thing’s a laff riot.

Yeah. Or, as an observer of Harvard University recently put it:

Viewed purely in terms of economics, Harvard is really a $40 billion tax-free hedge fund with a very large marketing and PR arm called Harvard University that has the job of raising the investment capital and protecting the fund’s preferential tax treatment.

It’s just like the NCAA. People look at the NCAA and they say Why is that organization tax exempt? Why are all sorts of university sports goodies tax exempt? Do you know how much a luxury box costs? Hell of a tax write-off. Do you know how much the head of the NCAA makes? And it’s a non-profit! The tax laws make it easier for universities to pay their coaches four million dollars a year in order to recruit generations of players who leave school in nine months. Etc.

Eventually, people will begin to talk about immense wealth-generating tax exemptions based on all those fine upstanding educational values.

Indeed, because of the tax breaks, schools like Princeton and Harvard have become multibillionaires, a fact their struggling localities have noted… The localities want the schools taxed…

… U.S. municipalities still reeling from the economic crisis turn to their local universities, whose land holdings are mostly tax- exempt, to close budget shortfalls.

But wait just a minute! The schools will point out how they’re struggling too. They used to have 30 billion dollars, and now they’re skidding along on 20!

Princeton used to have 16 billion and now it has around 13 billion… Its neighbors note that it maintains a teeny student body. Why does it need all that tax-exempt-begotten-money? Does each student get a one million dollar scholarship?

John D. Colombo, a University of Illinois law professor who has written about tax exemption and college athletics, says he doesn’t think the IRS action will fundamentally alter college athletics business. But he adds, “Audits are never comfortable. Just the IRS being there asking questions makes people nervous.”

Fine, yes, uncomfortable. Yes, nervous. But your coach is all right. The luxury boxes are all right. Get a grip on yourself.

The IRS has begun audits of more than 30 colleges that could include examinations of how schools determine the compensation of highly paid employees, including coaches and athletic administrators, according to an agency report.

The audits could include scrutiny of business activities that potentially can be seen as unrelated to schools’ primary purpose. Among the activities is the sale of corporate sponsorship packages that include athletics or are arranged by athletic departments.

… Colleges and Universities Compliance Project, which the agency said was part of a larger effort to review the largest, most complex organizations in the tax-exempt sector. Last year, the agency published a study concerning tax-exempt hospitals. [See post directly below this one.]

… The IRS interim report noted the large number of schools with an athletics coach among the five highest-paid employees who aren’t officers.

USA TODAY surveys of football coaching compensation have shown the average pay for a head coach in the NCAA’s 120-school Football Bowl Subdivision has risen 46% over the last three years, to $1.4 million in 2009. For the 65 schools in the 2009 NCAA men’s basketball tournament, average pay for a head coach for the 2009-10 season was nearly $1.3 million, USA TODAY found…

All sorts of Nosey Parkers have been nosing around universities lately. There’s that group that looked at how several universities not only ran their endowments into the ground, but contributed quite significantly to the nation’s recent economic meltdown. There’s the IRS investigation of non-profit hospitals I wrote about earlier today.

And now university coaches. Is nothing sacred?