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With tax reform the hot topic of the day in Washington, the college sports world is also sweating it out as the proposed GOP tax bill could have wide-ranging impacts on them.


While the aim of the bill is to reduce corporate taxes, the revenue impact has to be mitigated with cuts in other areas. One such way is the elimination of tax deductions for seat donations which have become a huge driver of revenue for college athletic departments. Seat gifts are a requirement for season ticket holders -similar to personal seat licenses in professional sports – where the school requires a donation for the right to purchase season tickets.


For reigning NCAA men’s basketball champion North Carolina requires a $6,000 donation for membership in The Rams Club, which brings the right to purchase two season tickets. A much larger $25,000 donation brings the right to purchase up to four season tickets. ACC-rival Duke requires a $8,000 donation with their booster membership known as the Iron Dukes. Membership there also gains access to a pair of season tickets, while a donation of $100,000 can score up to eight season tickets. Even lower tier Big Ten member Rutgers has incorporated a seat donation program into its football season tickets. A humble $25 donation is needed for the lower end seats while more desirable seats require bigger contributions. For Alabama, their Tide Pride program which ties donations to football season ticket and suite purchases, the athletic department boasts how the program brings in over $25 million a year to the program. This helps make it possible to pay head football coach Nick Saban over $7 million a year and making him the highest paid coach in college football.


While a straight donation to the school would be 100% deductible, tying it to season ticket purchases still gains the donor 80% deductibility for their donation in addition to their season tickets. Some schools have also reduced ticket prices for the seats themselves and upped the required donation.  The net result for the ticket purchaser/donor is that they have a lower out of pocket cost overall when you factor in the tax deduction. For example, one school charged between $55 to $75 for season tickets and recently reduced prices  to $40 to $65 by requiring a $100 seat donation per ticket.


The motivation behind many of these donation arrangements is really the right to purchase tickets. However, if selling more tickets to college football and basketball games can be subsidized by taxpayers, why wouldn’t someone want to give a donation if they were not already motivated to buy season tickets? So, the tax payer subsidies actually grease the wheels on the ticket purchases.


These sorts of ticket/donations arrangements exist throughout the top tiers of collegiate athletics as athletic departments grabble with increased operating costs and multi-million dollar coaching salaries.

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