NCPA - National Center for Policy Analysis

COLLEGE FOOTBALL VERY TAXING

January 7, 2010

When the University of Alabama and the University of Texas meet tonight for the college football national championship, you'd better take in all the game.   After all, you're paying for it, says Neal McCluskey, associate director of the Cato Institute's Center for Educational Freedom.

Many bowls receive generous taxpayer subsidies:

  • According to Mark Yost, author of "Varsity Green," seven bowls received more than $21.6 million in government aid between 2001 and 2005.
  • And the majority of bowls are tax-exempt, supposedly because they're good for local tourism.
  • That bowl executives often make big money and corporate sponsors get prominent advertising is apparently irrelevant.

Then, while playing in a bowl comes with a minimum payout of $750,000 for participating schools, many institutions end up spending much more than that to participate -- losses that taxpayers bear, says McCluskey:

  • Schools must agree to buy several thousand tickets for whichever bowl they're in, with the hope of selling those tickets to thousands of fans.
  • But with more than 30 bowls being played, many schools participate in games contested far from campus that aren't exactly must-see football.
  • The result is often big ticket losses.

Bowl participants also incur huge travel and lodging expenses for players, athletic staffs, and bands, and they spend considerable sums wining and dining school and football officials.  As a result of all these costs, even big-name institutions playing in elite bowls may be thrown for serious losses, says McCluskey.  For example, in 2007:

  • West Virginia University lost more than $1 million on the Tostitos Fiesta Bowl.
  • National-championship combatants Florida and Ohio State ended a combined $600,000 in the hole.

Source: Neal McCluskey, "College Football Very Taxing," Cato Institute, January 4, 2010.

For text:

http://www.cato.org/pub_display.php?pub_id=11100

 

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