VOL. 14 l NO. 7 JULY 15, 1977 Four-Year Contract Granted ABC Awarded Football TV Rights The award of rights to ABC- price-but rather the increased the npw agrrrmrnt calls for a directly related to pending presentation have been deter- TV to televise NCAA college benefits which will accrue to the minimum of 11G appearances. NCAA plans for restructuring mined, Peters indicated the football for the nrxt four sea- member institutions of the Rights frcs increased 61 per cent Division I, provision has been NCAA expects several double- sons was recrnt1y annou11ced by NCAA. He noted that the NCAA “In addition, there will be an made for the national telecast of headers and several prime time the Association’s Trlrvision Com- Negotiating Subcommittee was allocation of sufficient funds a Division I-AA football cham- telecasts will be added to the mittee. prepared to divide the college from the increased rights fee to pionship in the event present 1977 format. The action means ABC, which football package between two pay annually the travel expenses NCAA Division I football mem- Appearance limitations for in- has carried college football since networks, but that ABC had sat- of all athletes who qualify for bers are divided into Divisions divldual collrges will remain the 1966, will tclcvisc NCAA games isfied the NCAA’s quest for ex- NCAA championships,” Peters I-A and I-AA. same, despite the increase in ap- through thr 1981 season, since panded coverage by offering the contmued. “But best of all, more members pearance opportunities, to spread it has one year (1977) remaining largest one network sports agree- Divisions II, Ill will share the exposure and reve- participation among more col- on a currrnt contract. Award of a ment in the history of television. “Further, two more (total of nue of television which are so lrgcs, Prtcrs indicated. four-year contract by thr NCAA “Most importantly, WC will important in maintaining a col- Therefore, in the future as cur- is unprecedented since the col- realize at least a 41.5 per cent fourj regular-season games of lege athletic program in today’s rently, a collrgc may appear lege series began in 1952. incrrase annually in the num- membrrs of Division II and one competitive environment,” Pctcrs twice each season during a two- Making the announcement, bcr of opportunities for teams to additional game in Division III will be trlcviscd, five NCAA said. year period, and may utilize Committee Chairman Seaver appear on television,” hc stated. championships will be carried “There have been requests to special “exception” dates, such as Peters, director of athletics at Rather than 82 team appearance sprrad television benefits among Thanksgiving Day, in order to Dartmouth College, stressed not opportunities per season as pro- on ABC’s Wide World of Sports, more mcmbcrs, and this has been appear a maximum live times in the duration of the award or the vidcd by the current contract, a pool of appearance opportuni- tics has been designated for in- done,” Peters continued, “but the two years. stitutions which have not en- key clement in accomplishing In 1976, 52 different colleges joyed television exposure and this has been to provide more appeared on the NCAA Series. ABC has been granted authority appearance opportunities for in- Of the 472 NCAA members to change during each season the dividual colleges so that they which sponsor football programs, ratio of its regional and national gain added benefits by appearing 144 arc members of Division I, presentations to best take ad- on the program through the conducting the most prominent vantage of the many attractive merits of their own programs.” football programs. college games around the coun- Minimum Exposures The ABC-NCAA agreement try,” Peters added. followed two years of dramatic Another example of a bcne- During each season, ABC is to increases in the ratings for col- ficial change is a feature of the televise a minimum of 23 cx- lege football and accompanying new agrecrnent which will per- posures (either a national game excellent sales of commercial mit ABC to present as many as or a combination of regional re- time. Concurrently, in-stadium six games on a regional occasion. leases), which may bc composed attendance has gained steadily, This will accommodate a Satur- of 13 national telecasts and 10 as has the number of institutions day when an unusual number of relgional dates on which 45 sponsoring the sport, signalling significant games is scheduled. games will be presented. all-time popularity for college In an important development, Although no exact patterns of football. President Thompson Explains Internal Revenue Service Threat to Membership A serious threat to the finan- Athletic Association, all of which lctic income from radio and tele- cial health of intercollegiate are exempt from Federal in- vision broadcasting has yet to be athletic programs is posed by re- come tax under Section 501(c) fully explained. It is understood, cent actions of the Internal Rev- (3) of the Internal Revenue however, that their theory is that enue Service. The IRS is active- Code, local IRS offices have the sale of radio and television ly considering imposing a heavy raised the question of whether broadcast rights is a trade or tax on all revenues received by revenues received by the insti- business, the conduct of which First base umpire John Couch mode sure eieryone knew Arizona State collrgcs and universities from tutions and the postseason foot- is not substantially related to the third baseman Brandt Humphry wos out to complete a double play for thr radio and television broad- ball bowl association from the exempt functions of colleges and radio and television broadcast- Minnesota in action at the 1977 College World Series. On this play, casting of athletic contests. Ath- universities, or to the exempt letic program advertising also ing is “unrelated business in- functions of the postseason foot- Arizona State left fielder Steve Michael hit a line drive to Minnesota may be included. come,” which would bc subject ball bowl association. third baseman Mike Bruss, who caught Humphry leaning a little too The Issue to regular business tax rates. Implications far toward second and threw to first baseman Jeff Neutzling to com- Broadly, unrelated business “If the Internal Revenue Scr- plete the double play. Arizona State won the game 8-4 and advanced In audits of Southern Meth- odist University, Texas Christian income is income derived from vice ultimately holds that rev- to win the Series title in Omaha. (For complete results see page 7.) LJniversity, the University of any trade or business, regularly enues received by SMU, TCU Photo by Rudy Smith, Omaha World-Herald Kansas and the Cotton Bowl carried on, the conduct of which and the University of Kansas is not substantially related to the from the radio and television exercise or performance by a broadcasting of their athletic tax-exempt organization of its events is taxable unrelated charitable, educational or other business income, that ruling lnterwetations Reauests Promut purpose or function constituting probably will be applicable to all the basis for the organization’s collrges and universities,” said exemption. NCAA President J. Neils Thomp- For the purpose of these pro- son, University of Texas, Austin. “Cosi of Education;’ Explanatih visions, the mere fact that an “WC understand that, presum- ably in light of the tentative po- Recently, official interpreta- certifying institution defined by campus room and board, the for- exempt organization needs the already asserted within tions have been requested from the IJ. S. Office, of Education in mula includes the actual amount income or funds derived from sitions the NCAA Council by several the administration of the BEOG charged the student&athlete by the activity, or that it uses the the IRS, claims regarding the taxability of athletic broadcast member institutions concerning program.” his institution for those benefits. profits from the activity to pur- revenues are beginning to be the application of Constitution The “cost of education” util- Accordingly, for a student- sue its charitable or educational raised in audits at other institu- :%-4-(d)-(2)-(iv). ized in the administration of the athlete utilizing on-campus fa- objcctiVcS, will not bc consid- tions.” This legislation, which was BEOG program is defined by a cilities (assuming he has a con- ered to establish the substantial The basic corporate tax and adopted by the membership at specific formula which includes tract with the institution for his relationshlp rrqun-cd between the January 1977 annual Con- tuition and fres, room and board, room and board), the “cost of the business activity and the surtax which would be applied to vention and becomes effective and miscellaneous expenses. The education” defined in the BEOG exempt purposes or functions. this income add up to a tax rate August 1, 1977, provides that the actual cost of tuition and fees is program would be calculated by Unrclatcd business income of of 48 per cent. Because there combination of a student-ath- calculated under the formula, adding the amount of $400 (for exempt organizations is subject has been no ruling by the IRS lete’s athletically related insti- and the sum of $400 is specified miscellaneous expenses) to the to tax at the usual corporate tax on the question whether the in- come is in fact taxable, no po- tutional financial aid and his in each instance as the allow- actual cost of his tuition and rates. BEOG award may not exceed ance for miscellaneous expenses. fees, and room and board. The The reasoning of the IRS staff sition has yet been taken as to “the cost of education at the For the student receiving on- Continued on page 3 members proposing to tax ath- Conlinued on page 3 11,111,111111,111,,1,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,“,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,~,,.,~~,,,,,,,,, The Editor’s View Columnary Craft - Reprinted below is an ercetpt from the writing of a news columnist commenting pertinently about intercollegiate athletics.