Latest on the O'Bannon case

[mugrad99]

How much would each athlete get if you gave a share to every scholarship athlete at Marquette?  Even if the NCAA would put aside the amateurism issue that would prevent such payments, I would think that Title IX would probably require everyone to get paid.  Not sure, though.

Paying current players would be a slippery slope. There could not be a salary cap unless collectively bargained for. Kentucky would be the highest bidder...wait never mind 

[WarriorInNYC]

For brevity, I reduced your quote to core issues. My response is this:

   1) My initial idea was to tax student athletes because their scholarships are compensation for services rendered. If you buy into the NCAA crapline that the students are gaining an education, then the education has value and should be taxed. And, yes, I do believe that athletes are employees. The purpose of ASC 820 is to establish a fair value (or fair market value for tax purposes) and ASC 820 encompasses a widely accepted standard for valuation.

   2) They are a monopoly. There is a conspiracy among major American universities to constrict the value received to a barter transaction. A student athlete such as Mr. O'Bannon cannot negotiate with a school to deal with specific needs and wants. That's not how our country works in the 21st century.

   3) I take it you were not alive in 1977. The Final Four that year was North Carolina, North Carolina-Charlotte, UNLV and Marquette. Guess who won!

1) So do you also think that students who receive full-time scholarships are also "employees"?  They receive value (education) and provide value back to the school as well (academic prestige, research, recruiting, etc.). 

2) Again, not a monopoly, a cartel.  And again, the value being received varies from university to university.  If a university wants to provide more value, then they can invest in better athletic facilities, provide better housing options, boost their academic and athletic profile.  The student is not limited to where they can or cannot go. 

3) No I was not alive in 1977.  And yes I do realize that MU won the championship that year.  However, I did not know UNLV was in it as MU did not play them.  I thought you were referring to the late 80's/early 90's UNLV.  My bad. 

Here's another thought.  Should the MU band members also be getting paid?  How about the cheerleaders and dance team?  They are after all, providing entertainment to the fans during the games.  And they are shown on TV quite often.  They should be compensated as well, no?

I would also assume that we are also only going to tax those players that receive scholarships right?  As those are the only ones receiving compensation.  So then what happens to those walkon players that do not receive scholarships?  They are still providing a service to the university.  For those that don't play a minute, they are preparing the others in practice day in and day out.  For those that do play, there is entertainment provided for fans and TV.

[Jay Bee]

I am very much aware of the different values. But there is a way around this. It is called FASB ASC 820, or a valuation standard used in public accounting. ASC 820 dictates a hieraerchy of values. Since the price of a Marquette education is a published commodity (aka, tuition card), that price becomes a Level 1 value usable for financial reporting and tax purposes. Same for room, board, books and ancillary supplies. Yeah, my W-2 from Marquette will look different than a W-2 from UW-Superior!

I'm afraid your grasp of tax law vs. ASC 820 is not strong.

[dgies9156]

I'm afraid your grasp of tax law vs. ASC 820 is not strong.

Let me see if I got this right.

You are telling me that a direct quote from a tuition card or pamplet than Marquette uses for charging students tuition is not a Level 1 valuation.

That in a tax matter where you were debating the value of consideration received (aka, a year's tuition plus room and board plus the cost of ancillary expenses), the IRS would not use the published tuition rate of Marquette University, the published cost of room and board and the direct costs of books and supplies charged at the book store as the basis for levying a tax?

I think we could debate Level 1 or Level 2 or Level 3 until heck freezes over, but I promise you that these items are market measures of cost and represent in the eyes of the IRS the price at which a willing buyer and a willing seller, neither under duress and both with equal access to market information, would exchange a good or service.

[Jay Bee]

Let me see if I got this right.

You appeared to claim that the purpose of ASC 820 was to define a hierarchy for financial accounting fair value & tax fair market value. Further, the bolded comment suggests that US tax law follows the financial accounting hierarchy & valuation guidance (ie, you specifically bring Level 1 measurements into the "tax purposes@ discussion").

ASC 820 = financial reporting. Valuation & treatment for US tax can & often does differ.

Anyway, the O'Bannon case is crud.