Football income tax?
IRS threatens tax on NCAA television revenue
THE BATTALION
MONDAY, JUNE 6, 1977
Page 7
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By PAUL MCGRATH
Battalion Sports Editor
National Collegiate Athletic As-
[ociation affiliated schools, already
ieset with increased financial costs
ecause of required support for
omens’ athletic programs, may
ioon receive another blow to their
:heckbooks, this time from the
Internal Revenue Service.
Although nothing has been
nalized, the IRS has indicated in-
entions to tax revenue received
rom football and basketball televi-
ion rights fees. A 1974 tax audit of
iouthern Methodist University,
exas Christian University, tbe
diversity of Kansas and the Cotton
lowl Association by the regional
RS office in Dallas brought up the
nestion whether television reve-
ue could be taxed as “unrelated
business income.”
The IRS, remaining passive on
[he subject for more than 30 years,
now contends television revenue is
liot substantially related to the
ptherwise tax-exempt purposes of
i educational institution.
Sections 511-513 of the Internal,
levenue Code imposes a tax on
ax-exempt organizations which
ngage in a business unrelated to its
purposes and thereby compete with
organizations which are required to
pay income taxes.
The IRS, in its preliminary indi
cations, intends to tax television
revenue retroactively over the past
three years with a Texas A&M Uni-
veristy official saying the rate to be
25 percent of the amount received.
“We’ve had one hearing in Wash
ington, and although the decision
has not been rendered yet, our at
torney tells me that the outlook is
pretty dismal,” SMU president Dr.
James H. Zumberge said, “I’m anx
ious to appeal it to the next highest
authority.”
Zumberge’s assistant. Dr. John
Stephens seemed distraught that
the IRS would ignore 30 years of
precedent and impose a tax on tele
vision revenue.
“Well (SMU) oppose it in every
way available,” he said, adding that
the school would go to the courts if
that was the only alternative. SMU
has received about $600,000 over
the past three years under the
Southwest Conference’s television
revenue sharing plan which distrib
utes money throughout the entire
conference each time a member
school appears on television.
“This would effect every major
football school in the country,”
Stephens said. “It would change the
character of intercollegiate sports
while also changing athletic de
partment budgets and operation
considerably.
“I don’t think the NCAA will take
that laying down ” he said.
NCAA President J. Neils
Thompson, of the University of
Texas, said, “The IRS is drawing a
very fine line that football and bas
ketball television revenue is unre
lated business income. The revenue
created by television rights fees is
funneled back into our non-profit
Association as a totally educationally
oriented student activity.
“Our member institutions have
traditionally built up their programs
on this type of income, so I can’t see
how the IRS can say it is unrelated”
he said.
Len Vinsko of the regional IRS of
fice in Dallas said, “I’m not at lib
erty to discuss any of our individual
tax cases. . .that’s been our policy.
Nothing official has come down
through our channels. No final deci
sion has been made other than what
you have read in the papers.” He
refused to comment on when the
IRS will make its decision.
Should the IRS rule against the
NCAA, Texas A&M, as would all
schools with major athletic pro
grams, stands to lose a lot of money.
The A&M athletic propram,
which has been on the rise finan
cially due to a successful football
program, has gleaned more than
$1.2 million from television revenue
alone over the past three years,
Wally Groff, Assistant Athletic Di
rector for Fiscal Affairs said. Thus,
Texas A&M could lose $300,000 or
more to the tax.
Groff also said the IRS may be
planning to tax athletic ticket sales
to all non-students, including fac
ulty members.
“It’s not as far along as the other
thing,” he said. “But I don’t know
why they would differentiate be
tween faculty and students.”
Texas A&M Athletic Council rep
resentative Dr. Charles Samson
said the television revenue tax
would hurt A&M substantially.
“We (he and Athletic Director
Emory Bellard) haven’t looked at it
in any depth yet, so we don’t know
if we would have to cut out any
sports.”
Samson first learned of a possible
income tax at the spring SWC meet
ing. “It came as a shock to us. All of
us are just trying to keep our noses
above water.”
NCAA schools obtained $26 mil
lion dollars from the major televi
sion networks last year, Stephens
said, and this amount, plus money
from local television and radio sta
tions, would be subject to the proj
ected income tax.
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ggies a s ort Texas A&M golf team
at national meet heads for NCAA meet
i^l,
While Arizona State overcame
pools laden with foreign athletes
claim the National Collegiate
Ithletic Association track crown,
lexas A&M athletes were meeting
f'ith disappointment.
The Aggies of Coach Charles
Ihomas, second in the Southwest
Conference to Texas, were repre-
lented at the NCAA meet in Cham-
laign, Ill. by discus men Steve
[tewart and Tim Scott, pole vaulter
Brad Blair and hurdler Shifton
paker.
Neither Stewart, the SWC champ
i the event, nor Scott made it out
If the prelims and Baker could not
lualify in his prelim heat in the
JlO-ineter high hurdles. Baker ran a
4.2, far from his best of the year of
3.6.
Baker said he was fatigued by
eing on the road for so long (he and
lie others competed at the Federa-
ion meet in Wichita, Kan. last
weekend) and was hampered by a
and injury sustained a week ago.
He made the semi-finals of the
i-meter intermediates with a pre
time of 52.3. Facing extremely
alented competition, including
ventual winner Tom Andrews of
USC, Baker failed to reach the finals
with his 51.0 clocking. The slowest
time to reach the finals was a 50.6.
Brad Blair, SWC champ in the
pole vault and who has twice
cleared 17 feet this year, made the
finals in the event. There, a vicious
wind hampering all vaulters kept
the winning height below 18 feet for
the first time in several years. Ar
kansas State’s Earl Bell won with a
vault of 17-6 feet as Blair failed to
place in the top six.
Arizona State, led by Olympian
Herman Frazier and high jumper
Kyle Arney, gathered 64 points to
take the title. Frazier won the
400-meter dash in 45.57 and Arney
took the high jump with a leap of 7-6
feet.
University of Texas-El Paso
finished second in the team race
with Kenyan distance men Wilson
Waigwa and James Munyala win
ning the 1,500-meter run and
3,000-meter steeplechase.
Southern Cal finished third with
48 points, two behind UTEP, as the
Trojans won both relays and the in
termediate hurdles.
Washington State, another team
featuring Kenyan distance runners,
was fourth with 46 points.
Texas A&M Golf Coach Bob Ellis will take a five-man team to the
National Collegiate Athletic Association Championships starting this
Wednesday at Colgate University in Hamilton, N.Y.
The Aggies, runners-up to Houston in the Southwest Conference,
will take the same squad which recently placed seventh at the South
ern Intercollegiate tournament — Monte Schauer, Bobby Baker,
Tim Carlton, Dave Ogrin and Doug Ward.
The latest issue of American Collegiate Golfer, a monthly publica
tion based in Coral Gables, Fla., ranked the Aggies the number six
team in the nation.
The magazine’s top ten teams were Oklahoma State (Ellis’ alma
mater), Houston, Brigham Young, San Diego State, Arizona State,
Texas A&M, Georgia, Florida, North Carolina and South Carolina.
The four-day NCAA tournament will end Saturday.
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