An article on how scholarship costs are fudged by university and athletic department, and some implications

  • READ…THIS…EXPLANATION of athletic department and university accounting regarding student-athletes by an anti trust economist that gives expert witness testimony. He may not be totally objective, but think of him as the leper with the most fingers.

    It tells a significant part of how each organization cooperates/colludes with the other via creative accounting analogous to a buy/sell contract from an oil pipeline pricing model to obscure the amounts each maybe spending on educating a student to justify a tax exempt money transfer between the two organizations. Reliance on the buy/sell contract accounting analogue is apparently driven by the university’s and its athletic department’s mutual desire to attract tax deductible donations that are also tax exempt for the two organizations to receive and use. Both are chartered after all as tax exempt organizations and wish and are required to remain so. It also enables the receipt and use of vast gate, concession, TV and shoeco revenues under similar tax exempt status. There’s a lot of revenue that has to not be taxable and this accounting is part of the way it gets not recognized as taxable profit.

    Also read the comment thread, which adds considerable insight.

    This goes a long way to wising us lay persons up about why the university presidents have never cleaned up the money in D1 athletics and why their athletics departments were spun off as “independent” tax exempt 501c.3 entities not only to capture the revenue streams of donation, etc., but also to distance themselves from and manage the businessmen and more questionable interests “downtown” that have been instrumental from the early 1900s in developing and exploiting the business of sport in their communities and states. It also reminds one how the masquerade accounting helps enable the “non-profit” exploit. In turn, one can infer the great vulnerability of university and athletic departments operating on such a distorted accounting system to exploits by predatory wealthy individuals, corporations, intelligence organizations, and organized crime organizations with strategic/political and/or criminal purpose. When good people run disingenuous systems, even if with good intentions, they become the targets of predators.

  • @jaybate-1.0

    Is the BIA considered an “intelligence organization?”

  • @VailHawk

    No, we are a counter intelligence organization. 😄

    But we can neither confirm nor deny it.

  • @jaybate-1.0 Great read! Really interesting stuff. My favorite line is:

    “Rhetoric that turns a price into a cost, and a transfer of profit into a loss of money, helps play a role in confusing things enough that the moment in the magic trick where the profit is moved from one pocket to the other gets obscured.”

    It’s truly scary how little we all know about what is really going on with big business most of the time.

  • @benshawks08

    That was the essence IMHO, also.

    But it’s important to understand not to paint the organizations in a single black stroke.

    This story really only describes the preconditions of the legacy of university accounting methods one needs to grasp in order to get on to the bigger picture of compromise facing the greatest game ever invented.

    It establishes why the system is vulnerable to sharply greater compromise and abuse by those beyond the system–by those not just “downtown,” but by much bigger and more dangerous predators.

    Because of a legacy of bending the accounting rules to make the university system satisfy via compromise the diverse agendas of education, entertainment, taxation, downtown business interests, donors, and state and local politics and economics, the D1 universities organized regionally (by conferences) and nationally by association (NCAA) are easy prey for political/financial coercion by private oligarchs, and national and transnational corporations and agencies of government, at a time when college sport is useful to such players in their pursuit of regional and global agendas.

    Ultimately Sport is caught up in being an instrument of spreading culture and its economics and politics over new regions, and of redistributing control over existing ones.

    Remember, the Romans did not just bring armies, roads and water infrastructure to the conquered lands, they brought stadia with sport and amphitheaters with drama.

    It’s how the empire thing is done.

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