A congressional committee is inquiring about the tax exempt status afforded to the NCAA.
The U.S. House of Representatives Ways and Means Committee examined the tax-exemption on revenue generated from collegiate athletic conferences, according to James Duderstadt, a member of the Commission on the Future of Higher Education, who said he was contacted by representatives of the congressional committee about the matter.
Duderstadt, also president emeritus of the University of Michigan, said he was asked to discuss the financial practices of collegiate athletics.
The Ways and Means Committee has been conducting general oversight, including numerous public hearings, in the tax exempt sector for the past 18 months, said an aid for the committee.
As of now, athletic conferences are not-for-profit, Duderstadt said, and these conferences are corporations.
"The NCAA will make a huge payoff for the Final Four this weekend--somewhere around $800 million," Duderstadt said.
Duderstadt said this also applies to the ACC.
ACC Commissioner John Swofford's "mission is to negotiate the most lucrative contract so he can divide that money for the colleges in the ACC," Duderstadt said. "If [the Ways and Means Committee] were to conclude that the ACC or Big Ten were more like a commercial entity, then they could tax them, which would be a huge hit."
Duderstadt said that tax exemption of collegiate athletic events have led to rising compensation for NCAA athletic staffs nationwide.
"There has been a very dramatic rise in compensation for not just coaches but athletic directors and assistant coaches too," Duderstadt said. "Should this be supported by the public?"
David Ridpath, director of the Drake Group, a faculty group interested in curbing the commercialization of college sports, said that his group would see any government intervention as a good thing.
"There is a tipping point coming, whether it's economic or legislative ... but the NCAA cannot continue to function the way it does now," Ridpath said.
According to Kent Barrett, an NCAA spokesman, the NCAA is involved in the inquiry because it is one of the bigger non-profit organizations.
"This is not an investigation," Barrett said. "That would imply that we broke the law."
However, Ridpath and Duderstadt both cite the growing interest in the issue of curbing tax exemption for collegiate events as evidence that the NCAA will be taxed in the near future.
"There's never been more groups like us out there trying to change college athletics," Ridpath said
Contributions to the University's athletics program come from individuals, ACC revenue, ticket sales and student fees, said Keith VanDerbeek, University of Virginia associate athletic director for business operations. The Congressional inquiry's investigation could indirectly impact the University's program, VanDerbeek said, because if the NCAA were taxed, it would affect the University as a member of the ACC.
A spokesperson for the Ways and Means Committee would not disclose whether or when information related to the oversight would be released.
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