Sooners QB Caleb Williams...

[UCFBfan]

This from the guy who's QB is getting $1 million for playing at Alabama??

 

[businesslawyer]

It's been a few years since I read "Billion Dollar Ball" so I'm not sure about some of the details, but Texas and some other schools have set up their athletic departments as separate corporations. As such, they're free of many encumbrances other athletic departments face.

I don't recall what "charitable purpose" nor the specific IRS code they fall under but I believe it still allows tax exempt status albeit without having to answer to or be regulated by the university's policies.

If what I recall is correct that could lead to loss of tax exempt status and all its benefits if Congress decided there is no charitable purpose to their being and changed the law. It's actually surprising the "progressives" haven't gone after this...........yet.

But here is the bottom line -- at the end of the day, there are two types of business entities -- those where the profits get paid out to owners and those where they don't. Even if an athletic department is its own separate corporation, at least to date no one gets to keep the profits. And if that's the case, then the only basis to tax them is the government saying "we don't think your purpose is truly charitable." First, do we want the government making those decisions? But more fundamentally, most of our taxes of business entities is on profits. Athletic departments don't make money and stockpile the proceeds -- they spend proceeds to get better athletic programs. So I ask again -- what exactly are you taxing, because net income won't produce anything?

 

[DoctorWho85]

It's ironic that Nick Saban is saying that, but at some point there will need to be some sort of regulation or else schools like Texas with deep pocketed donors are going to set up dummy NIL's to basically pay all the best recruits to go to the schools. That being said, if the kid can make a million dollars or more right now, good for him. I hope he gets every penny he can.

 

[UConnJim]

But here is the bottom line -- at the end of the day, there are two types of business entities -- those where the profits get paid out to owners and those where they don't. Even if an athletic department is its own separate corporation, at least to date no one gets to keep the profits. And if that's the case, then the only basis to tax them is the government saying "we don't think your purpose is truly charitable." First, do we want the government making those decisions? But more fundamentally, most of our taxes of business entities is on profits. Athletic departments don't make money and stockpile the proceeds -- they spend proceeds to get better athletic programs. So I ask again -- what exactly are you taxing, because net income won't produce anything?A company that

A company that reports a profit, but retains the profit, still pays tax on their income. And, there are some colleges that do make money on college athletics, so those profits could be taxed, but the vast majority of colleges do not make money on athletics. And, if there was a tax on profits, colleges would find a way to not report profits so taxing college athletic departments is really a mute point.

One of the biggest issues I see for college athletes if they become "employees" or are making large sums of money is that tuition reimbursement by an employer over a certain level is taxable, so would some portion of college athletic scholarships for "employees" become taxable?

I think student athletes should have two choices:

1) Receive a scholarship with cost of attendance and athlete benefits tax free.

2) Have college athletes pay taxes on their wages and benefits including tuition reimbursement as "employees".

I think the vast majority of athletes would choose option 1, but athletes with large NIL opportunities, like Paige Bueckers, would choose option 2.

 

[Nostical]

I think student athletes should have two choices:
1) Receive a scholarship with cost of attendance and athlete benefits tax free.
2) Have college athletes pay taxes on their wages and benefits including tuition reimbursement as "employees".

I like it, but how about injuries? Would the 2's (employees) be covered by the school's Worker's Comp policy? How about the 1's?

 

[phillionaire]

 

[UConnJim]

I like it, but how about injuries? Would the 2's (employees) be covered by the school's Worker's Comp policy? How about the 1's?

I put "employees" in quotes because I wouldn't advocate for athletes to become actual employees of the university. I meant that if you want to make money as a college football player, you should pay taxes on the cash and the benefits that you make.

As for athletic injuries, they typically don't inhibit your ability to earn a living although the injury could prevent the player from playing professionally. Players can insure themselves against injury if they are projected to be a high draft pick professional.

 

[Rich]

Well Jaxson Dart has entered the portal which means that Caleb Williams is.......heh, somewhat likely to transfer to USC (Williams was in LA for Rams/Niners yesterday). As a lifelong SC fan I don't hate this for the team's ability to compete. But morally it stinks. I did not think Riley would encourage that. as the program's reputation amongst recruits has deteriorated markedly the past few seasons and there's a lot of trust that needs to be built back there. Turns out I was wrong. The man is ruthless. We will see how this plays.

Jaxson has a lot of potential. I'd suggest Mora give him a call but he probably has his sights set on P5 program. Graham Harell, USC's offensive coordinator for the past couple of years and Dart's primary recruiter just got the OC job under Neil Brown as WVU so maybe he heads over there.

 

[Husky68]

How could that not be one of the intentions. Having a nice practice field or nice dorms or nice meals or great coaches to get you to the NFL; don't those get you to choose a school. Why would not $'s in your pocket (guaranteed by NIL partner) not be part of your decision to pick a school under this new set up?

Let those institutions that want to go all in on NIL get at it, soon enough the landscape will clear and college sports will be whatever it becomes. I remember when Olympics was for "amateurs" only so athletes had to get paid under table and when "grand slam tennis events" precluded Rod Laver because he was a professional.
Maybe
Now rather than anyone having to pay the next Lew Alcindor or Cory Maggettee or Cam Newton under the table, let the bidding be open and "fair". Maybe Saban's concerned the T. Boone Pickens of the world might out bid his boosters?

Maybe Bezos will want his alma mater to relive the Bill Bradley glory days and get at it. This could be fun to watch. The next Lebron could go to college, get mega bucks from Nike (or anyone for that matter) and have the fun of going to college for a year and competing for an NCAA tournament championship.

 

[CallMeBruce]

Its probably not worth a million dollars to go to some crap team, against some crap competition, with crap skill players around you. Chances are you get hurt or just don't play as well and you screw up your draft position and and lose millions.

Caleb Williams would absolutely dominate in the MAC. He might get hurt (though "chances are" is an enormous stretch), but if he can't dominate the MAC, he's not good enough to get drafted.

 

[JohnFSilver]

Lol to Saban talking about an imbalance as to who dominates college football.

I know we want to get on Saban and Alabama, but I do think Saban is being true to his heart here. He wants players, he recruits the top players. There is no reason Bama wouldn't benefit from free agency. But, Saban knows it isn't good.

All i am thinking is we are lucky T Boone Pickens is gone. He'd go a million per year per players on the 85-man squad. Here's the issue. How many players can reasonably assume to get any money?

 

[WhereistheDove?]

One of the biggest issues I see for college athletes if they become "employees" or are making large sums of money is that tuition reimbursement by an employer over a certain level is taxable, so would some portion of college athletic scholarships for "employees" become taxable?

I think student athletes should have two choices:

1) Receive a scholarship with cost of attendance and athlete benefits tax free.

2) Have college athletes pay taxes on their wages and benefits including tuition reimbursement as "employees".

I think the vast majority of athletes would choose option 1, but athletes with large NIL opportunities, like Paige Bueckers, would choose option 2.

I'm confused by this scenario. Athletes with NIL deals are not receiving any wages from the university and NIL money is taxable already. The scholarships are not part of an employee compensation package though. There would be no difference between this scenario and a student with a non-athletics scholarship, who happens to be making an income on non-university endeavors. Should scholarships be taxable for them?

 

[Husky68]

I'm confused by this scenario. Athletes with NIL deals are not receiving any wages from the university and NIL money is taxable already. The scholarships are not part of an employee compensation package though. There would be no difference between this scenario and a student with a non-athletics scholarship, who happens to be making an income on non-university endeavors. Should scholarships be taxable for them?

Yes. I worked my way through school a lot, I paid taxes. Why not tax student who gets something free that I have to pay for with after tax dollars?

 

[WhereistheDove?]

Yes. I worked my way through school a lot, I paid taxes. Why not tax student who gets something free that I have to pay for with after tax dollars?

Any of these athletes making NIL money will also be paying taxes. Is your argument that any student who receives a scholarship should be paying taxes on the value of it?

 

[JohnFSilver]

I'm confused by this scenario. Athletes with NIL deals are not receiving any wages from the university and NIL money is taxable already. The scholarships are not part of an employee compensation package though. There would be no difference between this scenario and a student with a non-athletics scholarship, who happens to be making an income on non-university endeavors. Should scholarships be taxable for them?

Scholarships aren’t taxable, but income is taxable. They can’t classify students as employees be chase then scholarships are remuneration for services, which is taxable.

That said, NIL is absolutely and should be taxable.

If you are a cheerleader in scholarship and hold cheerleading camps, that income is taxable. But the scholarship to go to school isnt a job.

Two points:

1. Getting athletes into a union and classified as an employee is a disaster for all parties.

2. I guess Congress could just carve out a college sports exemption on taxes.

 

[WhereistheDove?]

Scholarships aren’t taxable, but income is taxable. They can’t classify students as employees be chase then scholarships are remuneration for services, which is taxable.

That said, NIL is absolutely and should be taxable.

If you are a cheerleader in scholarship and hold cheerleading camps, that income is taxable. But the scholarship to go to school isnt a job.

Two points:

1. Getting athletes into a union and classified as an employee is a disaster for all parties.

2. I guess Congress could just carve out a college sports exemption on taxes.

If I’m reading what you wrote correctly, I think we agree on this. I think there is a fundamental issue and misunderstanding from the folks saying scholarships should be taxable.

 

[Watchdog]

While we are at it, end 501(c)3 status. Times have changed

Now we're talking.
There are a number of schools which have placed their Athletic Departments in separate corporations. I think Texas was the first and that was quite a few years ago.
So, if they're already operating as separate corporations, what would their charitable purpose be that would qualify them for 501(c)3 status?

 

[coachcap]

Speculation on ESPNU satellite radio this afternoon is that C.W. will officially announce later that he's transferring to USC. Surprise, surprise!