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Whether they love, hate or are indifferent to the Hawkeyes,
taxpayers will pay the difference

Murray Sperber

Iowa City Press-Citizen

February 3, 2007

Charles Miller, Thanks for the Reminder of the Difference Between Civic-Minded Giving and Tax-Deductible Giving

Steve Parrott, University of Iowa Responds

[Note: This material is copyright by the Press-Citizen, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Iowa City Press-Citizen.]

In Sen. Charles Grassley's guest opinion on the tax breaks given to skybox holders and other big money fans of college sports, he does not mention a key point: Is this money for higher education or commercial entertainment? If the former, it is like the donations to the Physics Department and clearly a part of higher education. It deserves a tax break. However, if a fan pays big bucks to rent a skybox for a big-time college football or basketball game, it is similar to that fan's purchase of a skybox to a St. Louis Rams or Chicago Bulls game, and certainly does not merit a tax break.

The universities that sponsor these commercial entertainment events have long realized that they are on shaky tax ground and that someone like Grassley could prevail upon the U.S. Congress to close this tax loophole. Thus, many of them channel the money for the skyboxes to athletic scholarships for the athletes and claim that it is really money for higher education. But this accounting trick obfuscates the fact that Joe Fan pays his dollars to purchase the skybox and does not care where the university directs his money. For Joe Fan the bottom line is clear: If he does not receive the skybox in return for his money, he will stop giving it to the university. Joe Fan makes a commercial transaction, not a contribution to higher education.

If anyone doubts that the Iowa Hawkeyes and Iowa State Cyclones play big-time college football and basketball, I suggest that they take in a game in these sports at Grinnell or similar colleges. Intercollegiate sports at the NCAA Division III level provides extra-curricular activities for the students who play on the teams and other students who watch the games. No one has called a contest between Grinnell and Cornell colleges a commercial entertainment event. But the schools do not sell skyboxes to fans, nor is there a market for skyboxes to these events.

But a thriving market exists for prime seats to big-time college sports games, and they are clearly commercial entertainment events. In fact, the TV networks and newspapers that cover them treat them as interchangeable with professional sports. Yes, the college game has more rah-rah than the pros, but the coaches move back and forth from the colleges to the pros, and, of course, the players move from the colleges to the pros. In fact, the majority of college football and basketball players (men and women) in big-time programs see the collegiate game as minor league training for the pros, and their athletic scholarship as compensation for the huge number of hours per week that they spend on their sport. That only a small percentage of them will actually make the pros does not change the nature of their dreams, nor the commercial entertainment machine that promotes it.

So, I urge Grassley to try to close the tax-exempt status now enjoyed by universities with big-time athletic programs. As the senator so clearly points out, the billions of tax dollars that are not collected from these schools results in increased taxes for the rest of us. The government has to make up the tax dollars lost to these loopholes. You and I -- whether we love, hate or are indifferent to the Hawkeyes and Cyclones -- have to make up the lost revenue.
Murray Sperber, a professor emeritus of English and American Studies at Indiana University, has published a number of books about college sports and college life, including "Beer and Circus: How Big-Time College Sports Is Crippling Undergraduate Education."

Thanks for the reminder of the difference between
civic-minded giving and tax-deductible giving

Charles Miller

Iowa City Press-Citizen

February 3, 2007

I hope that Sen. Chuck Grassley's questioning of the deductibility of donations to the "big sports" programs of public universities generates spirited discussion among Iowans. There is a huge difference between civic-minded giving and tax-deductible giving.

Thank you, senator, for reminding us.

University of Iowa leaders seem not as farsighted as Grassley. They appear less willing to protect UI core values as they firmly embrace what a former UI president calls the sports "arms race." Big sports apologists reflexively tout mega-sports spending as ultimately benefiting scholarly missions. It's a flimsy argument. Nearly $110 million has been spent on non-essential stadium upgrades, many of which serve only a privileged few. Reflecting Grassley's thoughts, it is hard to see how this tilt toward the "needs" of the very wealthy serves the public interest. Meanwhile, academic programs continue to be cut and tuition still skyrockets -- putting the lie to the pro-sports "spin" (pun intended).

In pursuing big sports, state leaders also thumb their noses at the Knight Commission report, which concluded that it distorts the mission of public universities, erodes public trust, and hurts student athletes. Ironically, former UI President Mary Sue Coleman sat on that commission. UI's and the regents' denial of the degrading effects of big sports therefore seems willful. And it threatens two critical university resources: the dedication of its employees and taxpayer support.

Just because chasing deep pockets and offering special perks to the privileged wealthy is currently a popular and relatively easy business model doesn't mean it's an inspiring one, particularly for public institutions.

Meanwhile, UI and the Press-Citizen publicly defend record-setting UI spending on coaching salaries, using the same questionable reasoning used to justify our nation's obscenely huge growth in CEO salaries. It could be argued that a system that limits revenue-sharing (i.e., huge salaries) to coaches while withholding the wealth from the players is unfair, if not grossly exploitative.

Grassley also exposed another falsehood promoted by big-sports boosters: that shiny new skyboxes were built with private funds. Not true: The deductibility of sports donations means that our tax revenues were robbed in the bargain.

Other societal trends show that the civic function of our public institutions is threatened. For want of a little more money, public schools willingly subject students to TV ads during classroom instruction, feature junk-food vending machines and toy with having Pizza Huts serve lunches. And, as recent exchanges in the Press-Citizen reveal, public broadcasting in Iowa is trending toward greater commercialism and reduced local-affairs programming.

Such public institutions typically plead for mercy as they accept funds that distort their mission. But their leaders are not taking the high ground: It's the society, stupid! The goal is to garner wide public support, not wider corporate sponsorship and their special-interest entanglements.

I hope that prominent voices join with Grassley in demanding reform and accountability before all public trust in our treasured institutions is lost.
Charles Miller is a research scientist at the University of Iowa.

University of Iowa responds

Steve Parrott

Iowa City Press-Citizen

February 3, 2007

We are extremely grateful to the thousands of loyal and generous Iowans whose annual gifts, including almost $8 million in scholarship support in fiscal year 2006, provide academic and athletic opportunities to more than 650 student-athletes in 24 sports at the University of Iowa.

Similarly, we appreciate the charitable gifts that enrich the educational experiences of all UI students across a broad range of academic and extracurricular activities, all aimed at preparing today's students to become tomorrow's leaders, in Iowa and beyond.

The University of Iowa and UI Foundation commend Sen. Grassley for his attention and diligence regarding charitable giving to nonprofit organizations. We fully support the goals of transparency and accountability that the Senator has championed throughout his long and distinguished career.

We further believe that such gifts, in addition to having a very positive impact on the education of our student-athletes, also do a great deal to bolster the image and reputation of both the University and the entire state of Iowa.

Steve Parrott,

director of university relations
University of Iowa



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