NCAA=Philanthropy?

The timing of this article is perfect, given our discussion of the Gator Gala last week and the fact that I'm watching my beloved 'Noles take on NCState as I type this. :-)

NCAA asked to justify tax-exempt status
By JIM ABRAMS, Associated Press Writer
http://abcnews.go.com/Sports/wireStory?id=2528368

WASHINGTON - An influential member of Congress is questioning whether the NCAA, with its multimillion-dollar television contracts and million-dollar coaches, deserves its tax-exempt status.

"From the standpoint of a federal taxpayer, why should the federal government subsidize the athletic activities of educational institutions when that subsidy is being used to help pay for escalating coaches' salaries, costly chartered travel and state-of-the-art athletic facilities?" asked Rep. Bill Thomas, R-Calif., chairman of the tax-writing House Ways and Means Committee.

Thomas asked the NCAA to justify its tax-exempt status in a letter sent Tuesday to Myles Brand, president of the National Collegiate Athletic Association. He asked for a reply by the end of October.

Erik Christianson, a spokesman for the NCAA, said the organization challenged the fundamental assertions that athletics is not part of higher education or that not-for-profit status should be linked with the amount of revenue an organization generates. "We educate student-athletes; they are students first," he said.

Thomas noted that the annual returns filed by the NCAA with the IRS states that the primary purpose of the NCAA is to "maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body."

But he said corporate sponsorships and big television deals — he mentioned a $545 million deal with CBS for television coverage of the NCAA men's basketball tournament — have led many to believe that major college football and men's basketball more closely resemble professional sports.

"How does playing major college football or men's basketball in a highly commercialized, profit-seeking, entertainment environment further the educational purpose of your member institutions?" he asked.

Thomas also said that more than 35 college coaches reportedly receive salaries of at least $1 million a year.

"Paying coaches excessive compensation also makes less revenue available for other sports, causes many athletic departments to operate at a net loss, and may call into question the priorities of educational institutions," he said.

In a similar vein, he asked the NCAA to explain the educational value of public universities spending as much as $600,000 per men's basketball player during the 2004-2005 school year.

Thomas asked the NCAA to provide data on total annual revenues and expenditures for Division I-A football programs and Division I basketball programs.

Thomas in 2004 began a review of the tax-exempt sector. He has also looked into the tax-exempt status of nonprofit hospitals and credit unions.

I don't know about y'all, but I didn't realize that the NCAA had tax-exempt status. I have to agree with Rep.Thomas on this one - I think they're definitely toeing the line of being a charitable organization. His quote says it all - a "charity" whose member organizations have lucrative television deals and the ability to pay their coaches salaries upwards of $1 million.....something just doesn't sit right with me.

I realize that financial success doesn't necessarily determine worthiness as a nonprofit organization, and that, for example, the NCAA doesn't pay the coaches - but as a governing body, they sanction all activities of their member schools. While the athletes are students, the business of college athletics seems to contradict the NCAA's mission to ""maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body."

What do y'all think? Do you think the NCAA should qualify as a tax-exempt organization, or is Rep. Thomas on the right track in trying to revoke their status?