A new House tax bill passed on Thursday that would prevent wealthy donors from taking tax deductions on charitable contributions associated with athletic tickets; a decision that could lead to fewer donations and cost college athletic departments hundreds of millions of dollars. Under existing law, athletic tickets are not tax deductible, but up to 80% of “donations” made for the right to buy those tickets can be written off. There is a feeling among politicos that the existing deduction should be outlawed as the individual making the “donation” receives something of tangible value (i.e. tickets).
Howie Long-Short: The consensus is that should this provision make the final bill, a significant portion of the “donations” will end. I don’t see it that way. These aren’t donations, they are personal seat license fees required to purchase the best tickets. A tax deduction is nice, but wealthy alumni buy these tickets as a status symbol (and because they’re fanatical about their school). I don’t foresee any loss of revenue.
Fan Marino: LSU A.D. Joe Alleva said his school brings in $50 million to $65 million annually in “donations” related to tickets and that even a 10% decline would mean “at least $5 million to us”; adding that “we have no other place to make that money up.” Cry me a lazy river, Joe. Look at the wasteful spending around college football (Texas, Clemson); if there is a drop in revenue, I’m certain they’ll find some areas where they can save.
For the balance of today’s newsletter, sign-up here!