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USA Today - House bill on financial reporting targets college sports

July 14, 2014
In The News

By Steve Berkowitz
Congressional interest in college sports continued growing Monday evening, when two members of the House introduced a bill that would require wide-ranging, easily accessible financial reporting not only by schools, but also by the NCAA, conferences, bowl games and the new College Football Playoff.

The new bill essentially would result in the U.S. Department of Education making available for all schools — including private schools — the detailed, sport-by-sport revenue and expense data they report to the NCAA every year. The NCAA, which is shielded from open-records laws because it is a private, non-profit organization, does not make the figures available on a school-by-school basis in order to get private schools to participate in this reporting.

This is the third time in less than a year that a bill relating to college athletics has been introduced in Congress. The new bill also comes in the wake of a Senate committee hearing last week on a variety of college sports topics, including financial transparency, and a House committee hearing in May related to the effort to unionize scholarship football players at Northwestern.

Rep. David Price (D-N.C.) has titled his bill the Standardization of Collegiate Oversight of Revenues and Expenditures (SCORE) Act, and it is being co-sponsored by Rep. Tom Petri (R-Wis.). Petri is a senior member of the House Education and the Workforce Committee, which could help the bill's chances of getting committee consideration. That committee held the May hearing during which there was party-line disagreement about the prospect of college athletes' unions, but bipartisan criticism of the NCAA's and Division I schools' approach to addressing athlete concerns that triggered the effort at Northwestern.

"I've followed this for a long time and I've asked myself what, if any, is an appropriate federal role in college and university athletics," Price said in an interview with USA TODAY Sports. "Why now? The most succinct way I can put it is that I think it is time and it's important now to open the books on the financing of college athletics. …

"The larger context now is all the rising concern over the cost of college in general and a pretty large set of questions within that has to do with what part athletics plays in this — to what extent the athletic budgets are part of a larger phenomenon or a larger problem. And then it's pretty clear also that reform is in the air. … There's a lot of discussion about various aspects of university athletics. I'm not taking all that on here. What I am doing is trying to figure out what kind of information base is it desirable for the public to have that will offer a basis for sound judgment, for sound analysis and will offer a kind of resource for whatever reform proposals people may make down the road."

Asked about his optimism for the bill, Price said: "That's a good question in the current Congress, the way things go here."

According to a Library of Congress website, more than 9,000 bills have been introduced in this Congress and fewer than 200 have been passed by both chambers. Of those, fewer than 130 have become law.

But Price said: "I have a good Republican co-sponsor and we are intending to … talk with the relevant committee people about what kind of hearing we might get. I'm going to push on that."

USA TODAY Sports annually compiles a school-by-school database of Division I public schools' finances by collecting their NCAA reports through individual open-records requests.

Asked about private schools' ability to shield these data, Price said: "That needs to change. I think these NCAA requirements, with a couple of exceptions, are quite comprehensive – and they should be accessible, and that's true for publics and privates. I certainly don't feel any hesitancy about requiring that."

Price also expressed no reservation about making a requirement that could impact his home state's flagship school, the University of North Carolina at Chapel Hill, which is in his district. UNC allows its coaches to have private deals outside of their employment contracts with, among others, shoe-and-apparel companies and local broadcasters. Citing state open-records laws, it declines to make public these arrangements or the amounts involved — which may appear as third-party compensation on the school's reports to the NCAA.

"Our intention is to give a full account of the compensation these coaches and other athletic personnel are getting," Price said, "and I think we've got it covered."

The Education Department annually collects and makes public a variety of school-by-school athletics data for public schools and private schools under the Equity in Athletics Disclosure Act (EADA), but those figures are not as detailed as those collected by the NCAA. They do not include total compensation figures for individual coaches or for athletic-facility debt payments and they do not allow schools to report an annual expense total that exceeds its annual revenue, so no schools are shown with annual operating deficits.

The EADA data are not available in a way that "permits very good analysis," Price said.

Price's bill also creates a new set of annual revenue-and-expense disclosures for the NCAA, conferences, bowl games and the College Football Playoff by saying no school receiving federal funding can "be a member of any intercollegiate athletic association or participate in an national intercollegiate athletics competition organized by any person, unless such association or person" meets a series of reporting requirements on a sport-by-sport, event-by-event or – as applicable – a contract-by-contract basis.

These various entities would have to provide the Education Department "executive compensation schedules" and make reports involving at least 13 revenue categories, including broadcast and media rights revenue, and at least 13 expense categories. Many of these entities are organized as non-profit organizations, which results in disclosure of some of these figures on federal tax return forms. But the bill's requirements are more detailed and could result in more up-to-date reporting. Current IRS rules allow non-profits to routinely extend their filing deadlines until 10½ months after the end of the applicable fiscal year. The IRS also requires that compensation figures cover an organization's most recently completed calendar year, often resulting in those figures being 18 months old – or older -- by the time they are reported.

The two bills concerning college athletics and the treatment of college athletes that have been introduced by members of the House were referred to the Education and Workforce Committee.
Last August, Rep. Charles Dent (R-Penn.) and Rep. Joyce Beatty (D-Ohio) introduced a bill with provisions that include increased due process for NCAA athletic programs accused of misconduct, and making four-year scholarships mandatory for athletes participating in contact/collision sports.

In November, Rep. Tony Cárdenas (D-Calif.) introduced legislation that would require colleges with high-revenue sports programs to provide their athletes with a package of benefits, including financial aid when an athletic scholarship is lifted for reasons other than misconduct or academic failure.