Tax Bill Could Affect College Athletics

The current federal tax bill, which was passed by the House, contains a provision that would eliminate the tax break for making a "donation" to a college athletic fund, in exchange for the right to buy season tickets for college football, and at some schools, basketball.

Many top-tier football and basketball programs require a $1,000-plus donation each year for the right to buy season tickets in a decent location in the stadium or arena.

For an overwhelming majority of the athletic departments in the Power Five conferences, and many other conferences as well, that is an important source of revenue.

A significant loss of revenue would likely mean cuts in many areas. Sports at the bottom of the totem pole, such as tennis, could well be affected.

I'm not offering an opinion right now, just offering this item to consider. It could be interesting to see how it all plays out.

NoChance said:

The current federal tax bill, which was passed by the House, contains a provision that would eliminate the tax break for making a "donation" to a college athletic fund, in exchange for the right to buy season tickets for college football, and at some schools, basketball.

Many top-tier football and basketball programs require a $1,000-plus donation each year for the right to buy season tickets in a decent location in the stadium or arena.

For an overwhelming majority of the athletic departments in the Power Five conferences, and many other conferences as well, that is an important source of revenue.

A significant loss of revenue would likely mean cuts in many areas. Sports at the bottom of the totem pole, such as tennis, could well be affected.

I'm not offering an opinion right now, just offering this item to consider. It could be interesting to see how it all plays out.

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Agree. but I think they should put more money into college tennis. and pay college players for playing. Tax breaks are good , but alums still donate money if they want, and buy season tickets, they are always available and top alumni always get the first shot.

Also Football will be eliminated as sport by 2025. it is too violent. No more of that. it will be replaced by Soccer in USA

Thanks for posting this. I am somewhat torn: I get the cut, as it is essentially what are profits for schools shouldn't be funded by the general taxpayer. But I also understand it helps fund many other sports and facilities. It really isn't the LSU's of the world that get hurt, but rather the UL of M's....Its the mid majors....However, an argument can be made they have already being running lean...I really have to analyze what schools spend money on. Admittedly, when I see a school like UCLA fire its coach and pay him a buyout of 12 million dollars, I cringe at the waste of money over a football coach....

I think this will slow the ridiculous arms race of college sports, with crazy amenities separating schools like Texas spending millions of dollars on a new football locker room http://www.mysanantonio.com/sports/...ll-unveil-lockers-cost-8700-each-11731223.php I think this has gotten out of control for what is essentially a sport...but these bigger schools can afford it.

Unfortunately, you are probably right they won't stop spending on football and basketball, and will just cut sports like tennis, golf, wrestling, cross country and anything else that is a non-revenue budget eater.

Sadly, there just aren't enough people donating strictly to tennis....I am one of a couple of alum at my school that donate money, most donations come in to the general fund. I have a lot of thoughts on why people don't donate but I'll save those for another thread one day...

Nacho, you make a lot of good points, and I pretty much agree with all of them. I too, understand and agree with the tax cut, and with the fact that not many people donate strictly to a lower-tier sport such as tennis.

I was invited last weekend to attend a tailgate and football game at a major college venue. I took in the tailgating scene, thought about the club seat I sat in, and I realized that so much money comes in through donations to get the primo parking spot, and the club seats.

It is likely a much, much larger amount than the money brought in through ticket revenue. I have to believe that it is an amount that would be difficult to wrap my mind around. I looked at that school's athletic website, to see how much of a donation it took to get certain perks. It blew my mind.

If the tax cut comes to bear, there will be plenty of people who will still shell out the money to have their seven weekends of fun every fall. There will still be some who will say "no more." Probably enough of that to hurt some, enough to put some tennis, cross country, etc., programs in danger.

Thing is, the sports don't *have* to be cut in these situations. Nacho mentioned the arms race in facilities. Well it's not just that. The non-profit status makes them have to spend money. Look at coaches' salaries. There are water polo coaches making over $100k. In what universe is there a competitive market for water polo coaches that would drive salaries that high? Volleyball is similar. And then let's not forget all the suits in the department who do.... what exactly?

And there a number of schools whose athletic departments are either underwater(Cal is in for a huge world of hurt), or the general fund from the school has to be tapped. You have a bunch of schools trying to keep up with the 10-20 who actually cover their costs.

If there's strings attached, you don't get a deduction. Makes sense to me. Stop this insanity.

Bluefan75 said:

Thing is, the sports don't *have* to be cut in these situations. Nacho mentioned the arms race in facilities. Well it's not just that. The non-profit status makes them have to spend money. Look at coaches' salaries. There are water polo coaches making over $100k. In what universe is there a competitive market for water polo coaches that would drive salaries that high? Volleyball is similar. And then let's not forget all the suits in the department who do.... what exactly?

And there a number of schools whose athletic departments are either underwater(Cal is in for a huge world of hurt), or the general fund from the school has to be tapped. You have a bunch of schools trying to keep up with the 10-20 who actually cover their costs.

If there's strings attached, you don't get a deduction. Makes sense to me. Stop this insanity.

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@tennisjunky this conversation is right up your ally

Hmmm....I'm a bit surprised that there haven't been more comments about this. Maybe, Thanksgiving week has everyone's attention.

I do believe that there will be, whether through the aforementioned tax bill or for other reasons, a tipping point. There is indeed an "arms race," which is bordering on the ridiculous.

One way or the other, the landscape of college sports that includes sports such as tennis, will change. It may be a handful of years down the road, but it will happen.

And, college tennis as it is today, will change.

NoChance said:

Hmmm....I'm a bit surprised that there haven't been more comments about this. Maybe, Thanksgiving week has everyone's attention.

I do believe that there will be, whether through the aforementioned tax bill or for other reasons, a tipping point. There is indeed an "arms race," which is bordering on the ridiculous.

One way or the other, the landscape of college sports that includes sports such as tennis, will change. It may be a handful of years down the road, but it will happen.

And, college tennis as it is today, will change.

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I also think there will be a discussion of sports being attached to schools, which is one I think is way overdue to have. While a number of ADs pretty much raise their own money, there are still a number of school resources being used in order to create all this for a very small percentage of the student population.

Bluefan75 said:

I also think there will be a discussion of sports being attached to schools, which is one I think is way overdue to have. While a number of ADs pretty much raise their own money, there are still a number of school resources being used in order to create all this for a very small percentage of the student population.

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Some states are starting to question the high percentage of college athletic funding derived from student fees. Virginia passed HB1897 in 2016 (https://www.agb.org/trusteeship/2016/julyaugust/what-does-hb-1897-mean-for-athletics) . Power schools like VA and VA Tech may only use student fees to fund their budget at 20% or less. At the time of the law passing, those schools had student fees just accounting for 17-18% of their budget. The MM schools in VA needed to bring down athletic fee support from close to 80% down to 70%. Now athletic depts at Power schools will be squeezed at both ends-possibly losing 20% of donations due to new tax bill (most donors will still pay to get tickets) and having to cut reliance on student fees. While the general public probably thinks football and basketball covers the expenses of all athletics at the Power schools, even at those schools there could be reliance up to 20% on student fees in spite of ticket revenue, TV $, merchandising, donations, etc. For the non Power schools who dont earn tons of $ from ticket sales or have generous alumni, the vise will be tighter. Some schools may drop football if they are losing money; others may cut a lot of nonrevenue sports.

In Georgia, the Board of Regents for the University System of GA, will now cap the % of athletic budget that comes from student fees to 65%. Some universities were using student fees to fund close to 85% of their budget. One of those was Armstrong State which has now being combined with GA Southern. Here is the link: https://www.huffingtonpost.com/entry/georgia-student-fees-cap-sports_us_5734aaffe4b08f96c1825fca. Several GA universities recently added football-GA State was one of those-and it had the largest cut to absorb to its athletic budget. I also noticed GGC, which won several NAIA tennis national championships, seemed to have a lot of $ to spend a few years ago, but in the last year has done fundraising to pay for projects. Since it was a new university from scratch, the state had given it a lot of $ both for academics, buildings, and athletics to start, but must now be expecting the university to be out of start up mode.

jcgatennismom said:

Some states are starting to question the high percentage of college athletic funding derived from student fees. Virginia passed HB1897 in 2016 (https://www.agb.org/trusteeship/2016/julyaugust/what-does-hb-1897-mean-for-athletics) . Power schools like VA and VA Tech may only use student fees to fund their budget at 20% or less. At the time of the law passing, those schools had student fees just accounting for 17-18% of their budget. The MM schools in VA needed to bring down athletic fee support from close to 80% down to 70%. Now athletic depts at Power schools will be squeezed at both ends-possibly losing 20% of donations due to new tax bill (most donors will still pay to get tickets) and having to cut reliance on student fees. While the general public probably thinks football and basketball covers the expenses of all athletics at the Power schools, even at those schools there could be reliance up to 20% on student fees in spite of ticket revenue, TV $, merchandising, donations, etc. For the non Power schools who dont earn tons of $ from ticket sales or have generous alumni, the vise will be tighter. Some schools may drop football if they are losing money; others may cut a lot of nonrevenue sports.

In Georgia, the Board of Regents for the University System of GA, will now cap the % of athletic budget that comes from student fees to 65%. Some universities were using student fees to fund close to 85% of their budget. One of those was Armstrong State which has now being combined with GA Southern. Here is the link: https://www.huffingtonpost.com/entry/georgia-student-fees-cap-sports_us_5734aaffe4b08f96c1825fca. Several GA universities recently added football-GA State was one of those-and it had the largest cut to absorb to its athletic budget. I also noticed GGC, which won several NAIA tennis national championships, seemed to have a lot of $ to spend a few years ago, but in the last year has done fundraising to pay for projects. Since it was a new university from scratch, the state had given it a lot of $ both for academics, buildings, and athletics to start, but must now be expecting the university to be out of start up mode.

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There was a really interesting series a while ago about the business of college athletics. I can't remember where it was at the moment. One of the things that was brought up was that a number of schools were adding football, or jumping to D1 from 1-AA(or whatever it is called now.) And the big question was, why? The costs were astronomical, and as you mention, they do not bring in the money the power 5 do. Yet they seemed to have some cheerleaders anyway.

Facilities being built are fine with general fund money....as long as all students get to use them. But these opulent lockerrooms, indoor and outdoor practice fields, et al. that only a tiny percentage of the student body can use, when "physical health is part of a person's development" is used as the basis for having them at all, just strikes me as a poor use of money.

What I don't understand is this: The NBA needs players, so does the NFL. Why don't they look after training and developing their players? What logical reason is there for that to be a school's job? Particularly when said player has to sit through a class simply due to the fact he can hit 40% from 3 point range. Except for a few people who make exorbitant salaries off it, everyone would be better off if that guy was able to ply his trade in an actual work environment, getting paid, and not needing these silly other things taking up time. I used to think that just like actors and musicians, athletes had every right to get a scholarship to a school but not anymore. After all, many of those don't attend a school and that is nothing held against them. Yet because a guy can dribble he should also learn Roman history? If the student body can't use the facility on a regular basis, then I think there should be some real questions as to its true value to a school.

I have been trying to look and ascertain exactly what is a good model for an Athletic program budget wise, but it is pretty exhausting to find. And, after sifting through a number of budgets, it seems that schools spend money very differently from each other, and there isn't one formula to key in on. With that said, I believe that many of these athletic departments could run successful and meaningful departments without all of the fluff. From my own experience, student athletes (majority of them) play for the experience, coach, and educational opportunities. None of that involves having a $50,000 juice bar in the locker room (Ohio State).

Football and basketball programs drive much of the spending and attention. In many cases, while they have the highest revenues, it virtually all goes back into the programs. Small percentages go back into other enhancements, but most schools break even, so the revenue essentially supports those programs. Since ticket sales for mens sports drive the revenue, if you loose 20/30% of them to the tax changes, it can become real problematic. I think most ticket packages are bought by companies as a perk, and companies can still under this tax plan (as far as I understand it) write it off as a business expense. However, 20-30% sounds about right for the smaller vendors or individuals who buy these tickets. And no where is tennis a revenue generating sport, a big problem and red flag for administrators looking for revenue options. I would also extend this to coaching organizations turned marketing organizations, like the ITA. So, this will probably relegate tennis to a lower budget, or cut program. Tennis on campus will be the new/old competitive system, and top players will just jump to the pros and not bother with college.

What I can't wrap my head around are the amount of money some of these coaching salaries demand, especially when it comes to buy outs and contract payouts. And, the amount of money frivolously spent on non essential things like private jets for recruiting trips. I came across this article on Butch Jones, who just got canned at Tennessee, and it is completely misguided; an example of the poor priorities set by schools https://www.seccountry.com/tennesse...drives-220000-foreign-car-to-impress-recruits

I agree with @Bluefan75 in many cases there is no benefit to the general student.

@jcgatennismom brings up a whole can of worms on student fees and how those are allocated. Didn't even consider that, but the mid-majors with football teams definitely live and die on this. And for most power 5's with little income it is a tough spot.

I think at some point either the big revenue sports need to become their own business, and the other sports separate like in models where colleges don't have football, or schools need to rethink and redevelop their strategies, which may mean the end of sports like tennis such as what has happened in the MAC conference.

One other thing, I am amazed at what some schools spend on "administrative" fees. What a joke. Almost half of these budgets! Going to some ridiculous salaries for administrators and other needless things.....

The Senate version of the same bill, which passed, includes the same "no deduction" provision I spoke of earlier.

I would have to assume that the "combined" bill will not change that provision.

And, for sure, that bill will get signed.

I've been looking at all the football coaching craziness. It is truly an arms race, no doubt about it.

Which means that the fallout, when it happens, will not be good.

I truly believe that this will not end well, and that lower-tier college sports will be affected.

But, I've been wrong before. Though, I'm willing to bet a cold one that there will be changes on the horizon.

This is another nail in the coffin of any possible revival of American tennis.

Though a lot of us don't want to even think about it, let alone admit it, you could be right.

NoChance said:

Though a lot of us don't want to even think about it, let alone admit it, you could be right.

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I don't know. I think the chasing scholarships thing is what might be killing it in the first place. Consider how many basketball players play in high school, looking for a scholarship. If the NBA took its own development instead, would there really be 32,000 players in the system(total "college" basketball numbers)? Guys stop focusing on hoops and some football players, all of a sudden, you maybe have a tennis pool. I don't think it will be as bad as people think. I still think the only people really hurt are those making money on this.

For sure, there's a lot of things about college athletics that makes me shake my head and roll my eyes.

NoChance said:

For sure, there's a lot of things about college athletics that makes me shake my head and roll my eyes.

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Isn't the amount of money over the top sick? I'd have thought when they started getting their own cable networks that'd have been the tipping point but there's just no end.

The "student athletes" are being exploited. It'd be different if the revenues were used to educate more kids, provide more scholarships, keep tuition low, etc... But in the end it goes to a growing number of highly paid administrators.

eelhc said:

Isn't the amount of money over the top sick? I'd have thought when they started getting their own cable networks that'd have been the tipping point but there's just no end.

The "student athletes" are being exploited. It'd be different if the revenues were used to educate more kids, provide more scholarships, keep tuition low, etc... But in the end it goes to a growing number of highly paid administrators.

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To be fair, the AD does need a bigger drinks cabinet

eelhc said:

Isn't the amount of money over the top sick? I'd have thought when they started getting their own cable networks that'd have been the tipping point but there's just no end.

The "student athletes" are being exploited. It'd be different if the revenues were used to educate more kids, provide more scholarships, keep tuition low, etc... But in the end it goes to a growing number of highly paid administrators.

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Not sure exploited is the right word. Much of the value comes from the university. If the athletes started their own professional league, they wouldn't be worth much. But the admins are greedy bastards.

The combined House/Senate bill, which will likely become law before Christmas, still has the provision that donations to college athletic departments for preferential treatment will not be tax-deductable. I imagine that a lot of high-roller supporters could care less. Though, it will be interesting to see how it trickles down. There will surely be some lost revenue for the top-tier schools, perhaps in some cases enough to cause some changes.