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house Bill H.R. 1804

Should the NCAA Lose Tax-Exempt Status Unless it Allows Student-Athletes to Earn Money Off Their Names & Likenesses?

Argument in favor

Student-athletes should be able to earn income through endorsements or licensing their likeness to appear in video games without losing their eligibility or athletic scholarship, especially given how much money colleges generate from their athletic prowess. If the National Collegiate Athletic Association refuses to allow college athletes to do these things, it should lose its tax-exempt status.

Argument opposed

In many cases, student-athletes are already compensated through athletic scholarships and stipends while in college, so if they want to earn income from endorsements they should turn professional in their sport. Giving student-athletes the ability to earn endorsement income could open the door to corrupt recruiting arrangements, further undermining the amateurism of their sport.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedMarch 14th, 2019

What is House Bill H.R. 1804?

This bill — the Student-Athlete Equity Act — would amend the tax code to end the tax-exempt status of amateur sports organizations if they prohibit student-athletes from being compensated for the use of their name, image, or likeness by third parties (known as the Olympic model of amateurism). In effect, it would require America’s largest amateur sports organization — the National Collegiate Athletic Association (NCAA) — to allow student-athletes to profit from their likeness and earn endorsement income, which is currently illegal under NCAA bylaws and is punishable by a loss of eligibility.

Impact

Student-athletes and their families; college athletics programs; colleges & universities; and amateur sports organizations such as the NCAA.

Cost of House Bill H.R. 1804

A CBO cost estimate is unavailable.

More Information

In-Depth: Rep. Mark Walker (R-NC) introduced this bill to require the NCAA to allow student-athletes to be compensated for the use of their name, image, and likeness or lose its tax-exempt status as an amateur sports organization:

“Signing an athletic scholarship with a school should not be a moratorium on your rights to your name, image, and self-worth. It’s time to bring equity to student-athletes and fix the injustices that exist in the current NCAA model. After nearly two years of discussions with players and leaders, we are introducing legislation that won’t cost the NCAA or our schools a single dollar, while empowering college athletes with the same opportunities that every American should have in a free-market.”

Original cosponsor Rep. Cedric Richmond (D-LA) added:

“The Student-Athlete Equity Act is a clear cut first step at leveling the playing field for collegiate athletes whose labor generates significant revenue for the colleges and universities they serve and have done so for years. Student-athletes deserve the right to protect their name, image, and likeness that amateur sports organizations, such as the NCAA, currently restrict. These athletes generate enough revenue to pay for state-of-the-art athletic facilities, massive coaching salaries, and even contribute to the endowment at their respective colleges and universities. As young men and women who stimulate the economics of the NCAA, they should also be able to secure their own economic well-being.”

In a 2018 interview with the AP’s Ralph Russo, NCAA President Mark Emmert expressed an openness to considering a transition to the “Olympic model” by allowing student-athletes to earn endorsement income:

“There’s a lot of discussion about the Olympic model and I think it’s well deserving of serious consideration inside the context of college sports.”

Others argue that student-athletes should be paid salaries in addition to their scholarships (which typically cover cost-of-attendance). Critics of that proposal note that the athletes would then have to pay taxes on their income, whereas their scholarships are tax-free, and that it could prompt colleges to eliminate sports teams that generate less revenue to focus even more on football and men's basketball (which generate the majority of the current revenue).

This legislation has the support of three bipartisan cosponsors, including two Democrats and one Republican.


Of Note: The NCAA surpassed $1 billion in revenue for the first time in 2017. Data from the 2015 fiscal year shows that the 231 NCAA Division I schools generated a total of $9.15 billion in combined revenue and while 24 schools generated more than $100 million, 76% make less than $50 million per year and 44% make less than $20 million annually.


Media:

Summary by Eric Revell

(Photo Credit: Navy via Wikimedia / Public Domain)

AKA

Student-Athlete Equity Act

Official Title

To amend the Internal Revenue Code of 1986 to prohibit qualified amateur sports organizations from prohibiting or substantially restricting the use of an athletes name, image, or likeness, and for other purposes.

    College athletes are supposed to be amateurs, not professionals. Generally speaking what differentiates college athletes from professional athletes is college athletes do the sport for their own entertainment, while professional athletes tend to do it more in order to get paid or maintain a certain title/ reputation. Research has found that if you pay people to do something they enjoy, they will enjoy doing it less and less over time. Its like when colleges pressure professors to publish papers in order to maintain a prestigious reputation and get more funding and students. They start off enjoying it then gradually it just becomes more and more of a stressor.
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