How Name, Image, and Likeness Reforms are Eroding Amateurism in the NCAA and How that Will Affect the NCAA’s Tax-Exempt Status
Courtney Seams*
ABSTRACT
On June 30, 2021, just before numerous state laws regarding name, image, and likeness (“NIL”) went into effect, the National Collegiate Athletic Association (“NCAA”) enacted a temporary policy allowing college athletes to monetize their NIL.1 By allowing its college athletes to capitalize off of their NIL, the NCAA risks losing its status as an amateur athletics organization, which could result in the NCAA losing its ability to remain tax-exempt under § 501(c) of the Internal Revenue Code. The NCAA, with this new NIL allowance, is disputably a pseudo-professional organization, and, if so, it could arguably no longer stipulate that it is promoting the tax-exempt purpose of amateur athletics. Instead, the NCAA is promoting what is essentially professional athletics and, consequently, could risk losing its status as a tax-free nonprofit. This would subject the organization to federal income taxes and force it to forfeit millions of dollars to the federal government annually. To fix this, the NCAA may lobby Congress for a solution or could restructure itself, with the former presenting as the best solution for the NCAA. This Note is a novel look at how NIL monetization for college athletes affects the tax-exempt status of the NCAA and how the NCAA can respond.
* J.D. Candidate, The George Washington University Law School, 2022; B.S. in Biomedical Engineering and Sport Administration, University of Miami, 2019. I would like to thank my friends and family for their support throughout this writing process. Further, I would like to thank Professor Sasha Leonhardt, my journal adjunct, and the members of the Business and Finance Law Review for their guidance and assistance with editing. Lastly, I would like to thank Professor Ellen Zavian for helping me develop my paper topic and for providing advice throughout the writing process.
1See Michelle B. Hosick, NCAA adopts interim name, image and likeness policy, NCAA (June 30, 2021), https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy.