New GOP Tax Bill Will Have Wide-Ranging Impact On Costs For College Sports
The tax bill that has passed the House and Senate will have "wide-ranging impact on the college sports world if, as expected, President Trump signs it into law," according to Steve Berkowitz of USA TODAY. Major-college athletics programs are "facing significant increases in the cost of already highly paid coaches and administrators due a tax that will be imposed on the compensation of all non-profit organizations’ most highly paid employees." For example, as currently constructed, Alabama’s contract with Nick Saban "likely will cost the university" at least $1.2M in addition to the $7.125M in "basic compensation he is scheduled to be paid" if he remains UA's coach through '18. Meanwhile, athletics departments will have to "mitigate potential fallout from the elimination of tax deductions that donors have been able to receive for contributions tied to rights to purchase tickets and that businesses have been able to receive for entertainment costs such as taking clients to sports events." Another potential wrinkle is a "change in the rules governing taxation of income from non-profit organizations’ unrelated businesses." In the collegiate setting, this could "affect revenue from sports camps, a university golf course or sports medicine/physical therapy center that is open to the public." Lead1 President & CEO Tom McMillen, who represents ADs at schools in the FBS, said, "It’s literally half a College Football Playoff (worth of money). When you put it at that kind of magnitude, it wakes you up a little bit." Cincinnati AD Mike Bohn said, "We were doing some quick math on this today, and (with the compensation being paid to men’s basketball coach Mick Cronin and football coach Luke Fickell) it’s half-a-million dollars" (USA TODAY, 12/21).