That new tax bill? It's going to hit college athletics — hard

Sporting News
The bill requires that universities, as non-profit organizations, pay a 21 percent excise tax on coaches' big-dollar deals.
The bill requires that universities, as non-profit organizations, pay a 21 percent excise tax on coaches' big-dollar deals.

The high-dollar world of big-time college football and basketball is going to get even pricier because of the new tax bill that cleared Congress on Friday and will be sent on to be signed by President Donald Trump.

Case in point: The 21 percent excise tax, mandated by the bill, means, for example, that new Texas A&M football coach Jimbo Fisher's $75 million contract actually will cost the university $90.75 million, The Athletic reported.

The bill requires that non-profit organizations, such as universities, pay the excise tax on any employee who makes above $1 million or the top five highest-paid employees, even if their compensation doesn't exceed six figures.

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Because college football and basketball coaches typically are among the highest-paid employees at NCAA Division I schools, this will have a widespread impact on universities.

As another example, expect Alabama to have to pay an extra $1.2 million per year on top of football coach Nick Saban's $7.125 million annual income, USA Today reported.

The impact doesn't stop there, however. The new bill also changes the past tax code that made donors' financial gifts to athletic departments, tied to purchasing season tickets, tax deductible.

Tom McMillen, president and CEO of the LEAD1 Association, told USA Today that the monetary impact of the new bill is astronomical.

MORE: Jimbo Fisher leaving Florida State for Texas A&M

“This is going to cost hundreds of millions of dollars a year,” McMillen said. “It’s literally half a College Football Playoff (in terms of money worth). When you put it at that kind of magnitude, it wakes you up a little bit.”

USA Today reported that 90 head or assistant coaches in just football made more than $1 million. While not all of those coaches are the top-five highest-paid employees at their universities, the mass effect that programs will face paying out these taxes for football alone will be huge.

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