OT: University of Kentucky looks to make athletic department LLC

[BRS24]

Kentucky looks to make athletic department LLC

Kentucky will ask its board of trustees on Friday to approve a plan to convert its entire athletic department into an LLC, a move the school says will position it to adapt to the new climate of collegiate sports.

www.espn.com

Champions Blue, the name of the school's proposed Limited Liability Company, would allow Kentucky to create a public-private partnership and raise funds and handle expenses as collegiate sports shifts into a new era if the House settlement is approved and schools are allowed to share revenue with athletes in the years ahead, the school said in a statement.​

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Last week, a study led by former Auburn athletic director Jay Jacobs advised that schools should consider hiring human resources departments and operating like businesses instead of traditional athletic departments.​

 

[BuffaloHusky]

Kentucky looks to make athletic department LLC

Kentucky will ask its board of trustees on Friday to approve a plan to convert its entire athletic department into an LLC, a move the school says will position it to adapt to the new climate of collegiate sports.

www.espn.com

Champions Blue, the name of the school's proposed Limited Liability Company, would allow Kentucky to create a public-private partnership and raise funds and Edhandle expenses as collegiate sports shifts into a new era if the House settlement is approved and schools are allowed to share revenue with athletes in the years ahead, the school said in a statement.​

​

Last week, a study led by former Auburn athletic director Jay Jacobs advised that schools should consider hiring human resources departments and operating like businesses instead of traditional athletic departments.​

I don‘t understand all of the tax implications with this but it seems like forming an LLC would mean “donations” to the athletics department would dry up and profits would need to be distributed somewhere and that doesn’t necessarily mean to the athletes.

 

[AZHuskiePop]

That’s surprising only in its timing
When you add up all the factors at play currentlt one possible scenario is with College sports becoming a professional endeavor the student status of athletes who sign for a year becomes extremely vague.
I envisioned a future where sports formed an independent club , allowed to keep the University Name of course because that identity maintains fan interest and sponsorship connections . Without that name their a minor league and that model has never been a financial success .
However if this model is a club with no real academic connections to the University what happens to athletic scholarship and is this club bound by title 9 ? What happens to non revenue sports ?
Interesting questions .

 

[SoFla Steve]

College basketball's first official Green Blood.

 

[CONN78SEJ]

I don‘t understand all of the tax implications with this but it seems like forming an LLC would mean “donations” to the athletics department would dry up and profits would need to be distributed somewhere and that doesn’t necessarily mean to the athletes.

Begging for money like they used to do would be laughable. That’s like Elon Musk begging donors to help him make cars.

 

[Lafayette]

LLCs make sense since they are member or owner based (typically member). Members receive a K-1 which would be like a W-2 for an employee, but this if they are 'limited partners' is not subject to payroll taxes for student athletes. It's not a payment since the LLC is not employing them, but would employ coaches, admin, staff. But then the LLC is free to bring in donations is comical since they would be taxable to the LLC. More likely they have a non profit getting the donations and have the LLC as a conduit out as the operating company to make the whole 'scheme' tax-free donations and players getting cash but not as an employee.