Tuesday, June 10, 2014

In Re NCAA Student-Athelete Name and Likeness Licensing Litigation; Implications for Tax Exemption

What are the many implications for continued tax exemption for the NCAA arising from the current anti-trust and licensing litigation?  I don't really know yet but I have on my "to-do" list the task of reading the 157 page complaint.  PBS's Frontline has an online source from which readers can learn all there is to know so far regarding the litigation. 

I would really have loved to be sitting in the courtroom for however long it takes to listen in on the testimony and arguments.  My initial hunches concerning the implications for 501(c)(3) status range from questions regarding whether the NCAA's has a substantial non-exempt purpose to whether paying players for the use of their likenesses implicates the prohibitions on private inurement, excess benefit and/or private benefit.  The only problem though with logically thinking about the implications is that tax exemption for the NCAA is so terribly unprincipled in the sense that everyone knows the whole thing is built on a fictional house of cards.  That was proven -- if proof was ever really needed anymore -- when the Service dared to suggest that advertising revenue from things such as the "Frito Lay" Fiesta bowl ought to be taxable.  And did you know that Nick Saban is now something like the sixth or seventh highest paid head coach in all of televised football, college and pro?  He is making about $7 million a year and well worth it he is, considering the largess he helps bring to 'Bama.  A lot of other college head coaches make or will make close to the same, I imagine.  And yet the University of Alabama and the NCAA keep on running completely tax exempt with nary a batted eyebrow.  "Run Forest run!"

dkj

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