The new tax reform bill could negatively affect college universities athletic programs around the world. Coaches at top universities could start to see a decline in their salaries. Sport teams that don’t bring in large revenue could be cut from universities because of funding issues. Athletic programs depend on charitable donations from donors to help pay their coaches, offer scholarships for sports such as fencing, and renovate facilities. The old tax bill allowed for donors to receive an 80% deductible for large donations. Why would the donors continue to donate if they are no longer eligible for the tax break?
College football coaches are usually the highest paid employees at their respective universities grossing over $1 million dollars a year. Alabama who has the highest paid coach in college football also pays their offensive coordinator Brian Daboll $1.2 million dollars. Under the new tax bill having employees whom gross over $1 million dollars will create a huge financial burden for the university. Universities are now accountable for paying a 21% excise tax for their top five highest salaries at the universities. Without the extra funds, head football coaches can no longer offer million dollar salaries to top tier assistant coaches. Without great coaches the program could start losing games, and fan interest which in return equals
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The tickets sold at the gates bring in a huge amount of money for the programs. If donors choose not to continue to donate charitable donations to the universities, several sports team could possibly vanish because of lack of funding. Sports like fencing, bowling, and skiing could be cut to help offset the loss from donors. The lack of revenue from the gate of these sports make them an easy target for athletic directors to cut to help alleviate some of the pressure the university will face from the new tax