SBD/Issue 235/Collegiate Sports

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  • Fans Creating College Sports Web Sites Blur Recruiting Rules

    NCAA Officials Alarmed At Number Of Fans
    Creating Web Sites, Obtaining Media Credentials
    NCAA rules "explicitly state that fans of teams cannot be involved in recruiting, but those regulations blur when the fan wears a media credential," according to a sports-section cover story by Prisbell & Yanda of the WASHINGTON POST. NCAA officials and other "prominent figures on the summer basketball circuit are alarmed at an increasing number of fans who are creating Web sites, obtaining media credentials and becoming amateur recruiters." NCAA Dir of Agent, Gambling & Amateurism Activities Rachel Newman-Baker said that "one of the organization's biggest concerns this summer was who was obtaining media credentials and for what purpose." A "scan of Web sites in recent months illustrates how widespread independent sites with recruiting focuses are and how difficult it is for anyone to monitor or police them." With Web site addresses "easy and inexpensive to obtain, separating legitimate online journalists from fanatics with URLs can be difficult." Longtime national recruiting analyst Bob Gibbons said, "It really has gotten worse. ... There are multiple problems that need to be resolved, and I don't think anyone knows the exact solution to it. How do you legislate these people who claim they are media representatives?" Prisbell & Yanda note many of the "unofficial team Web sites that cover basketball and football" at Division I schools "fall under the umbrella" of either Rivals.com or Scout.com. Industry sources indicated that the "majority of Rivals and Scout sites operate above board," but "there are exceptions" (WASHINGTON POST, 8/25).

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  • College Sports Programs Study Report On Possible Sponsorship Tax

    Programs Like Ohio State Could Generate $86M
    Over Five Years On Potential Sponsorship Tax
    Ohio State Univ. (OSU) Senior Associate AD for Finance & Operations Ben Jay said that "big-time college sports programs" are examining a new Congressional Budget Office (CBO) report claiming that a "tax on naming rights deals for college sports events, such as football bowl games, and athletic facilities could generate" $86M over five years beginning in '10, according to Jeff Bell of BUSINESS FIRST OF COLUMBUS. The report indicated that "such payments from corporations, now considered nontaxable income for universities receiving them, could be reclassified as advertising revenue and become subject to federal taxes." The report's section on college sports sponsorships "builds on the findings of a CBO analysis published in May," which "questioned whether larger college athletics programs deserve to keep their tax-exempt status because of a heavy dependence on revenue from commercial sources, such as corporate sponsorships and royalties from licensing contracts." The report concluded that NCAA Division I athletic departments "derive a considerably larger share of their revenue from commercial activities -- as much as [60-80%] -- than do other parts of the university." Bell notes the study was "done at the request" of U.S. Sen. Charles Grassley (R-IA), who has "argued that since college sports programs receive tax benefits unavailable to private businesses, they need to better explain how their use of commercial revenue helps fulfill their schools' educational missions." Jay said that OSU athletics was getting $8-9M annually "in corporate sponsorship revenue prior to selling its marketing and media rights to IMG College and RadiOhio Inc.," and "on the royalty front, the athletics department received" $3.9M from the $7.4M the university received in licensing revenue in fiscal '09. Jay said that if athletics departments are "saddled with a tax on such revenue sources," they would be "forced to look elsewhere for funding, including university subsidies and student fees, or cut staffs and programs" (BUSINESS FIRST OF COLUMBUS, 8/21 issue).

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