Colleges rake in big money from TV contracts, who’s paying the taxes?

Aug 22, 2023, 9:00 PM | Updated: 9:28 pm

FILE - Southern California quarterback Caleb Williams jumps in for a touchdown as Notre Dame safety...

FILE - Southern California quarterback Caleb Williams jumps in for a touchdown as Notre Dame safety Xavier Watts, left, defends and Southern California wide receiver Kyle Ford watch during the second half of an NCAA college football game Saturday, Nov. 26, 2022, in Los Angeles. Caleb Williams was named to The Associated Press preseason All-America team, Monday, Aug. 21, 2023. (AP Photo/Mark J. Terrill, File)

(AP Photo/Mark J. Terrill, File)

SALT LAKE CITY — Colleges and universities have been playing a game of musical chairs for some time in an effort to get in on some of the big money being produced by TV contracts from college football.

Recently, the Pac-12 Conference saw six of its members opt to leave for greener pastures in the Big-12 Conference and the Big Ten Conference. The University of Utah is one of those schools that will join the Big 12 in 2024. 

Are these universities or conferences paying taxes on that income?

Scott Hodge, president emeritus and senior policy advisor for The Tax Foundation, shared some insight with KSL NewsRadio.


“This kind of reminds me of the old Steve Martin routine,” Hodge said. “You know how to make a million dollars and pay no taxes. Well first, you become a college conference because by being designated a quote-unquote educational organization, you can earn billions of dollars’ worth of TV contracts and other royalties. And pay no taxes because you are considered a nonprofit educational organization.”

TV contracts and the lack of taxes

Hodge says there is another issue that no one is talking about.

“The big sort of quiet element of this, of course, is that the networks get to deduct the payments they make to these nonprofit organizations,” he said. “This means, in the end, that none of that income is taxed at anywhere along the way. It is all tax-free, being subsidized by you and me, who are paying our taxes.”

Hodge says the Power 5 conferences have earned $3.3 billion in revenues in the past. Much of that money comes from TV contracts and events such as NCAA tournaments. 

“And none of that is taxed,” he said.

Hodge also says these conferences also get no tax-free donations from the average person.

“The kind of donations that we get to deduct if we give it to the local food bank,” he said. “So, these are really commercial enterprises sort of masquerading as nonprofits and being effectively subsidized by the rest of us.”

Possible solution

“There’s an element of the tax law in which nonprofits do have to pay tax on what they call unrelated business income,” Hodge said.

As an example, Hodge says if a museum is selling novelties or tourist items that would be unrelated to their “core business.”

He says the museum would have to pay taxes on that sort of income.

However, Hodge points out that designation is so broad that it allows TV revenue to be exempt from that. As a result, that is why conferences don’t pay taxes on TV revenue.

“And so, what I would recommend is that Congress revisit that designation,” he said. “And declare things like TV revenues, royalties and that sort of what we call commercial income and designate that as unrelated business income.”

Inside Sources with Boyd Matheson can be heard on weekdays from 1 p.m. to 3 p.m.




We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Business + Economy

FILE: An Angel bike given to the family of Eli Mitchell in April, 2023. Mitchell was hit and killed...

Britt Johnson

Families of drunk driving victims fight possible new Utah liquor license legislation

The bill sponsored by Rep. Jefferson Burton would increase the number of liquor licenses issued by the state of Utah.

7 hours ago

FILE: Tech workers are feeling a decline in on-the-job happiness according to a new survey. (Getty ...

Tammy Kikuchi

Tech workers report declining job happiness

Tech workers and those in the construction industry are on opposite sides of the a survey on job happiness.

11 hours ago

The Federal Trade Commission sued to block a proposed merger between grocery giants Kroger and Albe...

DEE-ANN DURBIN AP Business Writer

US sues to block merger of grocery giants Kroger and Albertsons

The FTC says the $24.6 billion Kroger Albertsons merger would eliminate competition and lead to higher prices for millions of Americans.

14 hours ago

pay gap...

Curt Gresseth

Why is the gender pay gap not closing?

The gender pay gap in the U.S. and Utah is not closing. A Utah financial planner details the impact that wage shortfall can have on a women workers over a career.

3 days ago

Henry Barlow said his new plant will save eight million gallons of water a year. (Mark Wetzel, KSL ...


‘We are going to feed American beef to the Americans’: Meat packing plant to open in Richfield

A new cattle processing plant in central Utah is expected to improve the state’s food supply chain.

4 days ago

A white Jeep crashed into a building in Ogden after the driver experienced a medial issue and lost ...

Curt Gresseth

Car crashes driving up cost of auto insurance

Replacement costs, inflation labor shortages, and more car crashes are all pushing up the cost of auto insurance.

4 days ago

Sponsored Articles

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Wellsville Mountains in the spring with a pond in the foreground...

Wasatch Property Management

Advantages of Renting Over Owning a Home

Renting allows you to enjoy luxury amenities and low maintenance without the long-term commitment and responsibilities of owning a home.

Clouds over a red rock vista in Hurricane, Utah...

Wasatch Property Management

Why Southern Utah is a Retirement Paradise

Retirement in southern Utah offers plenty of cultural and recreational opportunities. Find out all that this region has to offer.

Colleges rake in big money from TV contracts, who’s paying the taxes?