Next time, stick to virginity.

Clay Travis has written one of the most painfully stupid columns I’ve read in a while.  And I say that as someone who (1) as a life long libertarian has a skepticism about government interference in the market that’s almost genetic and (2) agrees with his conclusion that yanking the tax exempt status of secondary institutions is the one big stick the government has at its disposal if it wants to bring schools to heel on something like a playoff.

But the rest of it – sheesh.  It’s not as cranky as your typical John Feinstein screed, but it’s about as deluded.  To summarize:

  1. Some D-1 schools have athletic departments that make lots of money.
  2. Some D-1 schools have athletic departments that pay their coaches lots of money.
  3. All D-1 schools enjoy tax exempt status as non-profit institutions under federal law.
  4. Because D-1 schools don’t pay taxes on their profits, the free market ceases to exist when it comes to schools negotiating contracts with head coaches.
  5. Because the government subsidizes college athletic departments – and by extension, those people paid by college athletic departments – it has the right to regulate coaches’ salaries.

I kid you not.

… And the government could get involved.

How?

By using the same rationale they’ve used with banks and General Motors. Once we give you taxpayer money — or in this case, don’t demand tax revenue — the government has argued, we have a right to look at how you’re compensating your employees. If the government can set the pay scales of for-profit companies receiving government money, why can’t they do it for nonprofit colleges that they — and by extension we taxpayers — are subsidizing via the tax code?

Put plainly, they can.

Oy.  I feel dumber just from copying and pasting that.  If we are going to argue that tax code subsidies are grounds for government intervention in what schools pay their coaches, why stop there?  I bet I could line up more than a few people who feel that Michael Adams is grossly overpaid for what he contributes to society.

For that matter, why stop with universities?  Does Travis have a clue how many winners and losers the feds pick out in the tax code?  Start with the mortgage interest deduction – maybe we can limit how much money builders and realtors make (assuming the real estate market rises from the dead, that is).  Or take the biggest break of all, on employer health care cost contributions.  There’s the way to bring those pesky doctors and insurance company execs around on reforming health care!

Travis is in outright denial about this.

“I go back to professional baseball and Alex Rodriguez making $25 million a year. Or to Julia Roberts and $20 million for one movie. Are those people worth it? Of course not. But if that’s what the marketplace is and enough people are willing to watch Alex play or Julia Roberts in a movie, they have a right to get that.

“I don’t think this is any different.”

Wrong.

It’s very different. You can’t cite examples of for-profit corporations paying salaries to major league baseball players or movie stars in order to justify your college coaching salaries. You just can’t.

Really?  How many professional sports franchises have been the beneficiaries of government largess for things like tax breaks and outright subsidies for stadiums?  (And check out the regs on depreciation sometime, Clay.)  How many states give the movie and television industries tax breaks as an enticement for their business?  It’s the nature of the beast in this day and age.

And what’s his point, anyway?  If the schools are paying their coaches too much money in Travis’ estimation, why punish the coaches for that?  Shouldn’t the penalties fall on the schools who are taking advantage of us gullible taxpayers?  Why not make them refund some of their excess profits back to us, or at least to those who made contributions to these schools?  (By the way, those contributions are tax deductible, which means that the government is subsidizing those of us who contribute, which by extension means that… oh, never mind.)

I think you get my drift here.  We’re all sucking on the government teat, my friends.  Well, maybe not that guy holed up in the cave in Utah, but the rest of us.  If it makes you feel better to screw over Bob Stoops, so be it.  But don’t complain too much when the slippery slope rolls by your house.

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26 Comments

Filed under College Football, It's Just Bidness, Political Wankery, The Blogosphere

26 responses to “Next time, stick to virginity.

  1. Dog in TN

    Well said!

  2. Josh G.

    I don’t watch the show, so he might be a regular and I just don’t know it. But, Clay Travis would fit right in with the absolute wankers on “The Sports Reporters” every Sunday morning. I can see Mitch Albom’s deformed head nodding in solemn agreement.

  3. Lowcountry Dawg

    Aren’t booster club deductions non-deductible since you get tickets quid pro quo?

    Aren’t coach salaries paid out of football program revenues?

    Don’t football program revenues subsidize non-revenue sports?

    Has anybody ever put a fundamental tax law analysis on the subject:

    — Is the football program more than an insubstantial part of the activities of the otherwise charitable educational institutional? The rule of thumb for substantial is about 15% of gross revenues.

    — Could schools properly treat the football program revenue as unrelated business taxable income. That’s a fundamental change, no doubt.

    The columnist’s understanding of economics is less than sophomoric. Maybe he thinks that since the government prints money it owns it all.

  4. Lowcountry Dawg

    Scuse me, “booster club donations”. Its early.

  5. GumpDawg

    Senator, well said and as a libertarian myself, I like your style, just promise me one thing…you’ll stay away from talk radio.

  6. The Realist

    I must have missed a point somewhere. Why do we want to regulate coaches’ salaries? Because taxpayers are footing the bill? How about all the tax revenue that is generated when people travel to Gainesville in droves to watch the Gators play in the swamp? I know personally that without gamedays in Athens, many, many non-profit organizations would suffer from a drop in parking revenue alone.

    It appears that more and more people are walking around with their head firmly planted in their asses. I think that should be taxed.

    • To me, that’s the stupidest part of Travis’ post. You don’t think the schools would love to have government backing to cut coaching salaries? Shoot, it’s every academic’s wet dream.

  7. Holy shit, that’s stupid. Travis missing the fact that the universities he’s talking about are primarily funded by state governments, not the federal government. He’s also missing the fact that the athletic departments that are paying their coaches astronomical amounts end up sudsidizing their schools by transferring extra revenue back to the school. Far from sucking at the government teat, the major college football programs are generating so much revenue that the states don’t have to pay as much to run their schools.

  8. Speaking as someone that deals with accounting issues everday; this is correct. Anyone that assumes the government should automatically penalize via it’s tax-assessing ways needs to look at all the breaks people get. Texas gets to depreciate oil at 150% for crying out loud. You basically can depreciate something that doesn’t exist.

  9. NCT

    Hmm… I bet I can think of a few preachers that make too much money — not to mention the garish architecture that some mega-churches foist upon the landscape. Congress should regulate!

  10. Dawg93

    I’m counting the time I spent reading this blog entry towards my CPE credit for the year. Thanks Senator!

  11. Dog in Fla

    Clay brings up some great points about tax exempt status and is right that a threat to pull it could be the only stick that Obama’s DOJ could threaten to use to beat a playoff out of the BCS. Threatening to beat a 501(c)(3) hog by pulling tax exempt status or categorizing revenue as unrelated business income, and therefore taxable, has long been known to be the only way to get the momentary attention of the hog to stop feeding at the trough and glance up from the slop.

    However, too many piglets having nothing to do with college athletics who are sucking on the next-to-the-front tit of the tax-exempt pigs in ‘higher’ education would be slaughtered along with the coaches sucking on the front tit, so the tax-exempt or UBI kill actually won’t happen. The main defense to pulling tax-exempt status or taxing UBI of The BCS schools is that management (in our case Michael Adams) would somehow get the word to labor (anyone drawing a UGA paycheck) that their jobs and pay will be cut so politicians who want to stay in office (all of them) will never let it get too far.

    Of course, in the highly unlikely event that the tax idea were ever to happen, it will be known as the ‘Certified Public Accountant and Tax Lawyer Relief Act’ as they determine how The BCS schools can move their base of operations offshore to places like the Caymans avoid paying any tax just as all ‘great’ taxable for-profit corporations do.

    The important thing to take out of this is that Clay needs to be cut some slack: even though he’s Vanderbilt Law, he’s still a Tennessee Vol football fan, so he clearly already has identity issues and angst to deal with on top of his Tebow kerfluffle. Or maybe Clay saw if Finebaum can do something radioactive each week, why not him?

    • Two things: First, it wouldn’t be the DOJ making threats. There’s nothing unlawful about the schools’ tax exempt status. The threat would be solely in the political arena, that Congress would vote to strip the exemption.

      Second, the biggest screaming wouldn’t be coming from labor, but from the wealthy who put up those tax-deductible seven figure (or better) donations and then turn around and write them off. And those are the kind of folks who get listened to when they complain.

      • Can we write off what is donated to an athletic department? Maybe I’m just really conservative with my tax accounting policies, but I’ve never written it off. I’m going to feel like less of a CPA if you know this and I don’t.

        • Dawg93

          You’re living up to the “audit” part of your name. You can absolutely deduct your donations to the athletic dept. – 80% of them, actually, if the donations are made in order to purchase tickets.

          • I’ve been a Bull Gator since 2002, and I deduct 80% of my annual gift.

            Believe me it is a big part of why I am able to do it.

    • MacAttack

      Don’t expect the IRS to ever intervene either.

      The IRS has roamed around several major campuses the last 10 years and even though they have found MAJOR 501(c)(3) question marks (along with UBI), they refuse to touch it.

  12. Joe

    AOL Fanhouse still has writers?

  13. I’m actually a Libertarian too. I knew there as something I liked about you, Dawgness aside.

  14. One more thing – while it can be argued we subsidize tax exempt entities, we directly fund government, including government officials. Like the $200 in luxury jets the House just ordered.

    Who thinks they are getting their money’s worth there?

  15. Left to Right

    In a related blog post, Michael Elkon makes a good point regarding the gov. threating school’s tax emempt status:

    “In a way, the BCS conferences find themselves in the position of the top league of English football in the early 90s. The solution for the top clubs was to essentially secede from the English FA to form the Premier League. As a result, the top league would now negotiate its own TV contracts and distribute revenue to its members, rather than having the FA do so for the top league as well as the number of leagues below. If the political pressure continues from low-revenue programs gets too great, then the high-revenue programs will react the same way that Arsenal, Manchester United, and Liverpool did: we’re going to form our own league so we can control the bushels of cash that we generate.”

    http://bravesandbirds.blogspot.com/2009/08/time-to-secede-south-carolina-lead-way.html

    +1 for UVA Law over Vandy Law.