Uh oh. Tax-exempt status of college sports being questioned.
With Big Ten $2.4B deal looming, lawmaker asks questions about tax-exempt status of college sports
A lawmaker skeptical of the Big Ten’s proposed $2.4 billion deal with a private investor has requested a Congressional analysis of the tax consequences for the NCAA, its schools and conferences.apnews.com
Oh please. Michigan is the Texas of the North. Everyone assumes the have a bunch of titles until they actually look it up. One outright title since 1948."If the Big Ten and their member schools decide they want to push out one of their most powerful brands, that's on commissioner Petitti. You'd have to ask him why he'd want to do that. I don't know if there's a Big Ten without Michigan." -- Jodan Acker, a regent of UM.
[Sounds to me almost like a declaration of war.]
Regent says Michigan would consider leaving Big Ten if $2.4B capital deal OK’d
Acker and Michigan's board of regents have voiced opposition to the proposal on the table from the University of California's pension fund.www.mlive.com
UM and USC called Petitti’s bluff."If the Big Ten and their member schools decide they want to push out one of their most powerful brands, that's on commissioner Petitti. You'd have to ask him why he'd want to do that. I don't know if there's a Big Ten without Michigan." -- Jodan Acker, a regent of UM.
[Sounds to me almost like a declaration of war.]
Regent says Michigan would consider leaving Big Ten if $2.4B capital deal OK’d
Acker and Michigan's board of regents have voiced opposition to the proposal on the table from the University of California's pension fund.
Great! Agree! Does the countdown clock start soon on Petitti getting the boot? Maybe one of the UM regents becomes the new commissioner.
Senator Cantwell makes some good points. Once the co-mingling of funds occurs it is no longer clear that the non-profit status applies.Uh oh. Tax-exempt status of college sports being questioned.
With Big Ten $2.4B deal looming, lawmaker asks questions about tax-exempt status of college sports
A lawmaker skeptical of the Big Ten’s proposed $2.4 billion deal with a private investor has requested a Congressional analysis of the tax consequences for the NCAA, its schools and conferences.
tax "expert" here but not very knowledgable about the area of tax-exempt organizations, especially the sub-topic of unrelated business income. It's a murky area. The tax law itself in this area is not a model of clarity. Some general principles are set forth. I've previously posted in this Forum (I don't remember if it's previously in this thread or an other one, probably here) that the origin of the concept of unrelated business income to an otherwise tax-exempt organization and it being subject to tax goes back to the '50s or '60s when New York University owned the Mueller Macaroni Company (this may not be its proper name). Congress decided that a business enterprise should not be tax-free just because it was owned by a tax-exempt organization and be able to unfairly compete against taxable business enterprises. So an initial question under this line of thinking is at what point do the activities of a tax-exempt university become in competition with other taxable business enterprises. But in the current B1G case, the University of California, the potential investor, is itself a tax-exempt organization. So it may be hard to get there. If instead this were a private equity firm, any profits earned by it from the 10% ownership of the Big Ten Enterprises entity would be subject to tax to the private equity firm. That would not in and of itself make Big Ten Enterprises subject to tax itself. But if Big Ten Enterprises was deemed to be in competition with other businesses that are taxable, it could bring it within the unrelated business income rules. Sorry if this is a bit of a convoluted explanation. BUT, aside from what current tax law is or may be, Congress can decide that this area of tax-exempt organization needs reform and of course they can do what ever they want (of course generally with Presidential agreement). So I think it is more likely that there is at least a threat of potential new legislation to affect this area rather than much activity by the IRS to push the envelope to subject it to tax. I think it is more likely that Senator Cantwell or other legislators will use the threat of potential tax legislation to try to stop this whole idea than there is actual legislation enacted. This isn't fully a legal response but maybe a practical one. HtownOrange I hope this sheds at least a little light on your point.
www.nytimes.com
The Big Ten got too big, and fighting ensued. What’s next for a conference losing its identity?
The Big Ten no longer has a cohesive identity — unlike its SEC counterpart.
There's probably a contract. I think when Temple was dropped from the Big East it was because they weren't meeting stated attendance requirements, so something was violated. It may be the only way for the B1G to drop either school is to re-form itself into a new conference and not include them. Or go to a Super League route.
To add to your comment, each school, yes, even Rutgers, owns a share of the BTN so property rights becomes an issue and the BTN is a big money generator so I would assume.e Rutgers and Maryland would be all over the BTN and B1G if they were booted outright. And I am not sure either would be in a hurry to negotiate an exit.