Special Report

If this year's March Madness follows the recent pattern, the NCAA will splash basketball arenas and television broadcasts with reminders that the tournament features “student-athletes,” most of whom will turn pro in just about everything but sports.

Just before the November elections, the outgoing 109th Congress asked the NCAA to defend its role in higher education, and thus its tax-exempt status.

But some experts in nonprofit tax law doubt the inquiry will continue.

College sports have been tax-exempt throughout their history; the NCAA earned tax-exempt status in 1956. That means:

• 80 percent of financial gifts required for the right to purchase tickets are tax-deductible.

• 100 percent of donations that receive no benefits are tax-deductible.

• Athletics departments receive tax-exempt bonds to build stadiums.

• None of the income for television rights is taxed.

In October, Rep. Bill Thomas, R-Calif., then-chairman of the House Ways and Means Committee, sent a letter to NCAA President Myles Brand asking why those tax benefits should remain.

“How does the NCAA accomplish its purpose of maintaining the athlete as an integral part of the student body?” he asked.

“Corporate sponsorships, multimillion-dollar television deals, highly paid coaches with no academic duties and the dedication of inordinate amounts of time by athletes to training lead many to believe that major college football and men's basketball more closely resemble professional sports than amateur sports.”

In a 25-page response, Brand said the scope of college athletics doesn't detract from its core educational mission for 380,000 student-athletes.

“The scale of the sport does not alter the fundamental purpose,” he wrote. “The lessons learned on the football field or men's basketball court are no less valuable … than those on the hockey rink or softball diamond, nor, for that matter, those learned in theater, dance, music, journalism or other non-classroom environments.”

Brand warned against demonizing college sports because of their popularity.

“If the American public had the same popular interest in French lectures or accounting classes as they do in athletics, television would be just as eager to telecast those events and to sell commercial time to pay the rights fees,” he wrote. “Transforming those academic offerings into commercialized events would not undermine the educational purpose for which the offerings are made.”

Brand also noted that athletic programs at Division I and II schools provide $1.5 billion in scholarships for their student-athletes.

Thomas retired at the end of his term, and the new Democratic majority in the House and Senate has not indicated it will continue investigating the NCAA's tax-exempt status.

A spokesman for the Ways and Means Committee said the first priority for the new chairman, Rep. Charles Rangel, D-N.Y., would be President Bush's proposed budget. Any other matters would be secondary.

Kansas City attorney Bruce Hopkins, who specializes in nonprofit tax law, said Thomas' retirement may have given him courage to question the NCAA.

“It's obviously a fairly sensitive area,” Hopkins said. “I'm not quite sure why a member of Congress would stand up and take on college athletics. I have not seen or heard of any interest from any other member in continuing this.”

Sheldon Steinbach, former vice president of the American Council on Education, said he doubts the investigation renders any real impact.

“This money is all recycled back to the colleges,” he said. “The NCAA and the institutions themselves would have diminished economic support, which is hardly what anybody in Congress would embrace.”