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Abstract: 

Developments possibly affecting whether some college athletic teams will be subject to the unrelated business income tax (UBIT) continue and may be accelerating. This article describes the relevant events over the past decade or so, and focuses on new rules generally permitting college athletes to benefit financially from marketing their names, images, and likenesses (NILs), and on the Supreme Court’s 2021 decision in National Collegiate Athletic Association v. Alston. Alston wasn’t a tax case, but what the Court said about the application of the Sherman Antitrust Act to the NCAA’s limitations on providing college athletes with education-related benefits seems to call into question any NCAA-mandated limitations on compensation for college athletes. If that’s so, and if straightforward compensation becomes the norm for athletes in big-time athletic programs—that is, if it no longer makes sense to consider the players to be student-athletes—it’s almost certain that some college athletic teams will become subject to the UBIT, unless Congress changes the rules. (It should go without saying, but won’t, that such compensation will be taxable to the athletes.)

Keywords: unrelated business income tax (UBIT); education-related benefits; student-athlete; Sherman Antitrust Act; NCAA; NCAA v. Alston; O’Bannon v. NCAA; name, image, and likeness (NIL)

Affiliations:  1: Case Western Reserve University School of Law.