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Debate notes - Essay Example

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Synopsis of Issues. The payment of money to amateur athletes has traditionally been viewed to be contrary to the very essence and true meaning of amateurism.1 The proposal to pay college athletes who are amateurs poses several legal issues like taxation, labor law, not only to the university but the student athlete as well…
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Download file to see previous pages Under a business oriented pay-for-play system in which performance is not only expected, but required for payment, such practices would undoubtedly cease. Student-athletes would also be forced to deal with the overwhelming business concerns that come with a professional system. Student-athletes may be placed in a bargaining situation that they could not possibly be expected to fully comprehend. Student-athletes would be forced to employ agents, accountants, and attorneys for assistance.2
Tax Issues. Problems that universities have avoided by preserving amateurism would begin to haunt them under pay-for-play. As one commentator has noted, a costly problem universities would face under pay-for-play would be the loss of their tax exempt status for income derived from athletics.3 Currently, universities pay no federal tax on tuition or other payments attributable to educational activities.4 Like other tax-exempt institutions, universities are taxed only on "unrelated business taxable income."5Unrelated business taxable income is income from a trade or business that is regularly carried on, but is not "substantially related" to the institution's primary purpose.6 The primary purpose of a university is education.7 Currently, college athletics are considered to be substantially related to education. ...
mpensated for playing, the IRS most likely could no longer support the idea that athletics are rationally related to education and would tax the earnings derived from such events. This loss of profits due to taxation would significantly lower college revenues and would likely result in less popular sports being discontinued due to lack of funding, as well as the possibility of limiting funds for athlete services such as scholarships, financial aid, and tutoring.
Athletes as Employees: Labor Law Issue. A pay-for-play system could also open a Pandora's box for employment claims, including salaries, the right to form unions, and workers' compensation benefits.8 Due to the nature of athletics and the potential for injury, the addition of workers' compensation claims would be especially costly. Student-athletes' entitlement to workers' compensation is generally held to rest upon whether they are "employees" under the applicable workers' compensation law.9 Under the NCAA's current system most courts have held that universities are not liable for injuries suffered by student-athletes under workers' compensation laws10. In support of these holdings the courts have repeatedly pointed to the concept of amateurism.11 These courts reason that because student-athletes are non-compensated amateurs they are not employees and thus are not entitled to workers' compensation.12 If the amateurism policy is abandoned and a pay-for-play system adopted, courts could no longer deny student-athletes workers' compensation benefits because they would be employees. A second justification for paying student-athletes is that they are university employees13. This idea directly conflicts with established principles of amateurism. Consequently, courts are reluctant to alter the dynamics of collegiate ...Download file to see next pagesRead More
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