Some say the tax-exempt status of college sports is justified by the fact -- and it is a fact -- that successful sports teams often trigger increased applications for admission, and largess from alumni and legislatures. But, Thomas notes, ``federal taxpayers have no interest in increasing applicant pools at one school opposed to another.'' Furthermore, athletic success that causes a surge of giving to universities may decrease giving to worthy charities.
Also, tax exemption is financing an escalation of coaches' salaries. More than 35 college football coaches are paid more than $1 million annually. The University of Colorado athletic department has borrowed $8 million, much of which will be used to buy out the contract of a fired football coach. Noting that several universities pay their men's basketball coaches four to five times more than their women's basketball coaches, Thomas wonders: ``What additional educational benefit do men's basketball coaches provide beyond that which is provided by women's basketball coaches?'' If the disparity has a commercial rather than an educational rationale, why should the commerce be tax-free?
Tax exemption also is a federal subsidy for ever-more lavish facilities: Oklahoma State University, which is receiving $165 million from T. Boone Pickens to improve its athletic facilities, was already planning a $102 million upgrade of its football stadium. OSU charges fans a $2,500 ``annual donation'' just to become eligible to buy tickets for the best seats. The University of Michigan, which has had 198 consecutive sellouts at its stadium that now seats 107,501, is spending $226 million to add 3,200 luxury seats and 83 suites. The University of Texas at Austin is spending $150 million to add 10,000 seats to its current 85,123 capacity. These may be sound commercial decisions, but why should this commerce be tax-exempt?
Thomas wants to know how many NCAA members ``generate a net profit on the operations of their athletic departments (excluding university subsidies such as student fees or general school funds and services)? Of the institutions that generate a net profit, how many use the profit for purposes unrelated to the athletic department?''
Thomas is retiring, but if Democrats capture control of the House, the new chairman of Ways and Means, Charles Rangel, may hold hearings into the NCAA's tax-free lifestyle. Such hearings will be embarrassing, if people who operate football and basketball factories are capable of embarrassment.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins