Lulz at NCAA being a "charity." That piece of **** is for profit and everyone knows it.
How? After the budget items are met, it is the member schools that receive the distributions from the NCAA. Those, in turn, are not for profit institutions who roll budget surpluses (a rare occurrence) into the endowment with the eventual goal (as is being considered at Harvard) of making the school financially independent and not charging tuition.
The only opportunity for "profit" is in administrator's and professor's salaries. We could debate all day about inefficiencies in the system and whether NCAA and university employees are overpaid (I think they are even as a big supporter of high executive compensation), but I don't have a problem with the concept of a system that uses college sports to enrich the higher education system. That is not to say I wouldn't support stipends for athletes, etc.. that would share some of the profit generated with those generating it.
Non-profits own for-profits all the time. That is neither here nor there for purposes of the analysis. It's really quite clear the NCAA is a for-profit.
The distinction is significant. There are penalties for non-profits who derive too much income from for-profit activities. If the NCAA was declared a for-profit, it would have to become a C Corporation and pay entity-level tax, as its member institutions would not want the UBTI it would generate.
I understand the distinctions and tax ramifications. A non-profit owning a for-profit has no bearing in this case because the profits flow up to the tax exempt entity, from which they can't be distributed to shareholders or other typical beneficiaries. I still don't understand how you see the NCAA as a "for profit." Yes it makes money, as do most charities, but there are no shareholders or other place the money goes (which is the real distinction, for profit and non-profit are terrible misnomers).
Who benefits other than the member schools? The NCAA returns 96% of its revenues (
http://espn.go.com/college-sports/story/_/id/6756472/following-ncaa-money) to its member schools. I am sure there are plenty of small time frauds perpetrated by the NCAA, but relative to the amount of money they generate for schools, those would be miniscule. If you accuse them of being evil because they pose as a not for profit but are really not acting appropriately then tell me who is benefitting from their misdeeds and raking in all this money.
I hate the NCAA for what they are doing to Miami, but I prefer to attack them for their actual and numerous misdeeds. Making baseless claims that they are really a "for profit" misses the point of what they are doing and I would think that, given what they have done to us, we would not be interested in baseless claims.
You don't understand this issue. You keep trying to make the distinction be about whether the shareholders are for-profits or not. But that is clearly and plainly wrong. Every member institution in the NCAA through its endowment owns interests in for-profit enterprises. The _shareholder_ being a non-profit has no bearing on whether the entity they are a shareholder of is a non-profit. And in fact, endowments have to carefully avoid owning interests in flow-through for-profit entities, because they can lose their tax-exempt status as a result. So the fact that the NCAA is owned by non-profits is irrelevant to the question of whether the NCAA is -- itself -- a non-profit entity. Ergo, your statement that "A non-profit owning a for-profit has no bearing in this case because the profits flow up to the tax exempt entity, from which they can't be distributed to shareholders or other typical beneficiaries" in addition to assuming its own conclusion, is just wrong.
Your next statement is off-base also: "I still don't understand how you see the NCAA as a "for profit." Yes it makes money,
as do most charities, but there are no shareholders or other place the money goes (which is the real distinction, for profit and non-profit are terrible misnomers)." Charities do not 'make money.' That's just wrong. They may receive donations, but they are not actively involved in business activities that generate profit from commercial activities. That's the definition of a for-profit. The NCAA is so obviously a for-profit, it's actually quite hard to even seriously debate this topic. If someone decided to set up a business that was granted the rights to collegiate sporting events and resold those rights to networks (for profit businesses) at a substantial gain, there is no doubt that entity would be considered a for-profit. And, again, nothing about the nature of its shareholders changes that.
This isn't even really debatable. By any and all objective metrics, the NCAA is engaged in the for-profit activity of licensing the rights to broadcast sporting events.
