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GOP tax plan could devastate big P5 football powers ...
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quo vadis Offline
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GOP tax plan could devastate big P5 football powers ...
The GOP tax plan that passed the House has a provision that will eliminate a deduction for college sports fans who donate to their schools as part of priority systems tied to season ticket sales. The article linked below is written from an LSU perspective but applies to virtually all of the big-time football powers:

"LSU officials say that potentially as much as $50 million for the university's heralded athletic programs could be lost if Congress eliminates a little-known tax deduction that helps bring in millions to pay for its highly-ranked football, baseball, basketball and gymnastics programs, among others.

"It could be disastrous — for not just us, but every athletic department in the country," LSU athletic director Joe Alleva said."

Maybe this is the leveler factor that will give G5 schools a fighting chance against the Ohio State's, Texas's and LSU's of the world?

http://www.theadvocate.com/baton_rouge/n...afd6c.html
(This post was last modified: 11-16-2017 04:54 PM by quo vadis.)
11-16-2017 04:49 PM
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Hokie Mark Offline
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RE: GOP tax plan could devastate big P5 football powers ...
I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

And before anyone goes there, I'm not saying if they should or shouldn't change this tax law -- I'm just an average guy who pays his taxes every year. The politicians didn't ask my opinion and, frankly, probably don't care for it anyways. But you guys are a different - you value all opinions!

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11-16-2017 04:55 PM
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quo vadis Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

I'm not sure. These rich people might donate a lot because of that deduction. I could see it having a big impact.
11-16-2017 04:56 PM
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Wedge Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 04:49 PM)quo vadis Wrote:  Maybe this is the leveler factor that will give G5 schools a fighting chance against the Ohio State's, Texas's and LSU's of the world?



11-16-2017 05:03 PM
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DavidSt Offline
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RE: GOP tax plan could devastate big P5 football powers ...
Good!!!! Let the butthurt begin for the P5 schools.
11-16-2017 05:13 PM
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Attackcoog Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 04:56 PM)quo vadis Wrote:  
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

I'm not sure. These rich people might donate a lot because of that deduction. I could see it having a big impact.

Well, at worst, the deduction should only drop by the top marginal rate--because all making something tax deductable does is save you from paying taxes on the revenue that you donate. So, if the top marginal rate is 35%, then if you give 35% less, your actual net cost is the same as it was in the previous tax year. So, at worst, it might lower donations by the top marginal tax rate of a given donor.

That said, my guess is a heck of lot of the bigger donations are not technically from individuals. Instead, the donation is actually from the individual's company. As such, the donation will be a business expense and remains effectively deductable (as it is will be reflected as a marketing expense which offsets revenue, effectively operating just like a deduction for the corporation or individual). This would be the case for any corporate donation and any donation from an small business owned by an individual. So what you might see is individuals (who can) restructuring how they give to the school---switching the donation and their tickets to the business side of their financial ledger. Thus, there might be little real change in donations where the rubber meets the road .
(This post was last modified: 11-16-2017 06:00 PM by Attackcoog.)
11-16-2017 05:55 PM
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HeartOfDixie Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 05:13 PM)DavidSt Wrote:  Good!!!! Let the butthurt begin for the P5 schools.

If it hurts the big guys it will really hurt the people nobody has heard of.
11-16-2017 07:44 PM
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Wolfman Offline
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RE: GOP tax plan could devastate big P5 football powers ...
If it gets signed into law, donations will be made directly to the school and be 100% deductible.

Be careful when you wish for butt hurt. What ever the effect is on P5 schools, it is going to be 10 times worse for G5 schools..
11-16-2017 08:00 PM
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Pervis_Griffith Offline
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RE: GOP tax plan could devastate big P5 football powers ...
This House bill still has to be reconciled with the Senate's, assuming of course the Senate can pass something which is a high bar to pass for them for some reason.

Regardless ... assuming this does go into effect ... I don't suddenly see UAB being able to be on equal ground with Alabama just because of this.
11-16-2017 08:03 PM
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otown Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 08:00 PM)Wolfman Wrote:  If it gets signed into law, donations will be made directly to the school and be 100% deductible.

Be careful when you wish for butt hurt. What ever the effect is on P5 schools, it is going to be 10 times worse for G5 schools..

How so? This is where the relativity matters. P5 schools like to pump their chest on how much media money flows in to them.......... pretty sure they take in donations at a similar large margin. This is a case where it will hurt the P5 10 times worse than the G5........ 07-coffee3
11-16-2017 08:40 PM
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JRsec Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

And before anyone goes there, I'm not saying if they should or shouldn't change this tax law -- I'm just an average guy who pays his taxes every year. The politicians didn't ask my opinion and, frankly, probably don't care for it anyways. But you guys are a different - you value all opinions!

(right?)
07-coffee3

What most folks forget Mark is that the "rising tide floats all boats" effect impacts the smallest boats the most. The Alabama's, Ohio State's, Michigan's and Clemson's of the world will still fund football better than anyone else. But all schools will be hit proportionately. So it doesn't take a rocket scientist to figure out the smaller programs will suffer disproportionately by this tax change.

They will also suffer secondarily even more. When state appropriations are made for the schools allocations will head to the schools with the largest alumni bases disproportionately as well. Elected representatives count votes and respond to what ticks people off the most. And has been pointed out above it won't really affect corporate donations which now comprise a significant % of the donated revenue. So since corporations want their logo before as many people as possible, and since the largest alumni bases control the most votes, state appropriations will follow and follow in a manner designed to please the largest % of the registered voters. So small state directional U will be cut to make sure Big State U gets what it needs.

The P5 will suffer, but not nearly as much as the G5 who will suffer much less than FCS and Division schools. It means that gate and TV money will become slightly more of the % of overall revenue. And those who have the largest gate take, and make the most in TV revenue will simply have fewer to compete with for the top players. Small state schools will lose sports programs, privates will find it harder to compete, and what people call the P5 will win the political lottery for funds at a time of shrinking state budgets.

For all of those seeking schadenfreude at the expense of the P5 the graves they are mentally digging for the P5 will become the financial pits that are used to bury them.
(This post was last modified: 11-16-2017 09:11 PM by JRsec.)
11-16-2017 09:01 PM
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Post: #12
RE: GOP tax plan could devastate big P5 football powers ...
This tax bill may eventually become the classic case of not counting your chickens before they hatch, so I would hold off commenting about what might be the effects until there is an actual final bill that the president will sign.
11-18-2017 01:07 AM
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 05:55 PM)Attackcoog Wrote:  
(11-16-2017 04:56 PM)quo vadis Wrote:  
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

I'm not sure. These rich people might donate a lot because of that deduction. I could see it having a big impact.

Well, at worst, the deduction should only drop by the top marginal rate--because all making something tax deductable does is save you from paying taxes on the revenue that you donate. So, if the top marginal rate is 35%, then if you give 35% less, your actual net cost is the same as it was in the previous tax year. So, at worst, it might lower donations by the top marginal tax rate of a given donor.

That said, my guess is a heck of lot of the bigger donations are not technically from individuals. Instead, the donation is actually from the individual's company. As such, the donation will be a business expense and remains effectively deductable (as it is will be reflected as a marketing expense which offsets revenue, effectively operating just like a deduction for the corporation or individual). This would be the case for any corporate donation and any donation from an small business owned by an individual. So what you might see is individuals (who can) restructuring how they give to the school---switching the donation and their tickets to the business side of their financial ledger. Thus, there might be little real change in donations where the rubber meets the road .

Businesses would have to follow the same rules as individuals. If the contribution gives them the right to buy tickets, it would be no longer deductible.

I wrote a post on this last week but nobody responded

http://csnbbs.com/thread-832932.html
11-18-2017 08:18 AM
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RE: GOP tax plan could devastate big P5 football powers ...
(11-16-2017 09:01 PM)JRsec Wrote:  
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

And before anyone goes there, I'm not saying if they should or shouldn't change this tax law -- I'm just an average guy who pays his taxes every year. The politicians didn't ask my opinion and, frankly, probably don't care for it anyways. But you guys are a different - you value all opinions!

(right?)
07-coffee3

What most folks forget Mark is that the "rising tide floats all boats" effect impacts the smallest boats the most. The Alabama's, Ohio State's, Michigan's and Clemson's of the world will still fund football better than anyone else. But all schools will be hit proportionately. So it doesn't take a rocket scientist to figure out the smaller programs will suffer disproportionately by this tax change.

They will also suffer secondarily even more. When state appropriations are made for the schools allocations will head to the schools with the largest alumni bases disproportionately as well. Elected representatives count votes and respond to what ticks people off the most. And has been pointed out above it won't really affect corporate donations which now comprise a significant % of the donated revenue. So since corporations want their logo before as many people as possible, and since the largest alumni bases control the most votes, state appropriations will follow and follow in a manner designed to please the largest % of the registered voters. So small state directional U will be cut to make sure Big State U gets what it needs.

The P5 will suffer, but not nearly as much as the G5 who will suffer much less than FCS and Division schools. It means that gate and TV money will become slightly more of the % of overall revenue. And those who have the largest gate take, and make the most in TV revenue will simply have fewer to compete with for the top players. Small state schools will lose sports programs, privates will find it harder to compete, and what people call the P5 will win the political lottery for funds at a time of shrinking state budgets.

For all of those seeking schadenfreude at the expense of the P5 the graves they are mentally digging for the P5 will become the financial pits that are used to bury them.

I'm not so sure. Have you seen the attendance at most of these schools? You can probably walk up on game day and get pretty good tickets. The donations coming in there are truly charitable. The bigger schools have an arms race to get good seats. If you're giving 1,000 and lose your deduction you'd be more likely to shrug it off than if you're giving 10,000.

A lot of people I know pool thier money anyway to create one"club" account and get a higher status than they could afford individually. In these cases only one person would be due a deduction.
11-18-2017 08:26 AM
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ken d Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-18-2017 01:07 AM)Transic_nyc Wrote:  This tax bill may eventually become the classic case of not counting your chickens before they hatch, so I would hold off commenting about what might be the effects until there is an actual final bill that the president will sign.

Especially when you consider that many of the people currently enjoying this deduction are also giving large sums in political donations. I'm sure their senators and congressmen will be getting an earful before this is over.
11-18-2017 08:29 AM
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RE: GOP tax plan could devastate big P5 football powers ...
When P5 schools start "worrying" about how badly G5 schools might be affected, the G5 schools should be on guard, not because of the tax bill but because the P5 has never been concerned about G5 prior to this.
11-18-2017 09:27 AM
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RE: GOP tax plan could devastate big P5 football powers ...
It may affect some bigger donors but probably not the rank and file who just take the standard deduction anyway
11-18-2017 10:59 AM
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TerryD Offline
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RE: GOP tax plan could devastate big P5 football powers ...
It passed the House. Better call your Senators. The Senate vote is next week as the GOP is rushing this bill through.
11-18-2017 11:00 AM
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JRsec Offline
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RE: GOP tax plan could devastate big P5 football powers ...
(11-18-2017 08:26 AM)mturn017 Wrote:  
(11-16-2017 09:01 PM)JRsec Wrote:  
(11-16-2017 04:55 PM)Hokie Mark Wrote:  I'd guess that most who donate to college athletics would do so even if it wasn't tax deductible. The only difference is they'll have a little less money to donate... probably not a big deal either way, however.

And before anyone goes there, I'm not saying if they should or shouldn't change this tax law -- I'm just an average guy who pays his taxes every year. The politicians didn't ask my opinion and, frankly, probably don't care for it anyways. But you guys are a different - you value all opinions!

(right?)
07-coffee3

What most folks forget Mark is that the "rising tide floats all boats" effect impacts the smallest boats the most. The Alabama's, Ohio State's, Michigan's and Clemson's of the world will still fund football better than anyone else. But all schools will be hit proportionately. So it doesn't take a rocket scientist to figure out the smaller programs will suffer disproportionately by this tax change.

They will also suffer secondarily even more. When state appropriations are made for the schools allocations will head to the schools with the largest alumni bases disproportionately as well. Elected representatives count votes and respond to what ticks people off the most. And has been pointed out above it won't really affect corporate donations which now comprise a significant % of the donated revenue. So since corporations want their logo before as many people as possible, and since the largest alumni bases control the most votes, state appropriations will follow and follow in a manner designed to please the largest % of the registered voters. So small state directional U will be cut to make sure Big State U gets what it needs.

The P5 will suffer, but not nearly as much as the G5 who will suffer much less than FCS and Division schools. It means that gate and TV money will become slightly more of the % of overall revenue. And those who have the largest gate take, and make the most in TV revenue will simply have fewer to compete with for the top players. Small state schools will lose sports programs, privates will find it harder to compete, and what people call the P5 will win the political lottery for funds at a time of shrinking state budgets.

For all of those seeking schadenfreude at the expense of the P5 the graves they are mentally digging for the P5 will become the financial pits that are used to bury them.

I'm not so sure. Have you seen the attendance at most of these schools? You can probably walk up on game day and get pretty good tickets. The donations coming in there are truly charitable. The bigger schools have an arms race to get good seats. If you're giving 1,000 and lose your deduction you'd be more likely to shrug it off than if you're giving 10,000.

A lot of people I know pool thier money anyway to create one"club" account and get a higher status than they could afford individually. In these cases only one person would be due a deduction.

You need to study the ticket sales model of the top schools to understand your situation better. We can't pool to create a better account. Donations just to get a pair of tickets in the end zone start at $800 for the 5 to the 20's and upper decks it might go to $1200, for better seats its $2500 & way way up from there for box seats and the sky boxes are mostly corporate and will stay that way since they can write it off as business expense. And none of those contributions cover the cost of the pair of season tickets which is another $1100.

And since most of those deductions are indexed or only 50% applicable it really won't affect the big schools that much. They'll have to scale back their 100 million dollar budgets by about 10% or at most 15% and if it hits everyone the competition level remains the same.

Besides before it is over with there will be a workaround that actually benefits the school instead of the athletic department. The concept of priority will never go away as it is as old as civilization.
11-18-2017 11:42 AM
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JRsec Offline
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Post: #20
RE: GOP tax plan could devastate big P5 football powers ...
(11-18-2017 08:29 AM)ken d Wrote:  
(11-18-2017 01:07 AM)Transic_nyc Wrote:  This tax bill may eventually become the classic case of not counting your chickens before they hatch, so I would hold off commenting about what might be the effects until there is an actual final bill that the president will sign.

Especially when you consider that many of the people currently enjoying this deduction are also giving large sums in political donations. I'm sure their senators and congressmen will be getting an earful before this is over.

They'll just make the contribution to the school instead of the athletic department and the school will just be smart enough to let them keep their current seating priority. End of story.
11-18-2017 11:44 AM
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