It’s March Madness Time – And Duke’s Cost to Keep Coach K Just Went Up!

As a life-long fan, alumnus, and football season ticket holder of Louisiana State University, I closely followed the 2017 tax act’s addition of the new excise tax on excess executive compensation for tax-exempt organizations. Basically, there is a new 21% excise tax on salaries in excess of $1 million for tax-exempt executives, including certain college coaches. 

I’ve been following the ever-increasing salaries of university coaches since LSU was excoriated for giving new head football coach Nick Saban the unheard of yearly salary of $1.2 million back in 2000. At the time, only three coaches were making over $1 million -- Bobby Bowden of Florida State University, Steve Spurrier of the University of Florida and Phillip Fulmer of the University of Tennessee – all of whom had won national championships.

Since that time, coaching salaries have skyrocketed.  Nick Saban is now making over $11 million per year at the University of Alabama.  A coach does not even crack the Top 25 highest paid coaches unless they are making in the neighborhood of $4 million.  In the vast majority of states, the highest paid state employee is a college athletic coach.  In 2017, there were 78 head college football coaches making at least $1 million.  There were 15 assistant college football coaches making at least $1 million. There were another 66 college basketball coaches making at least $1 million.

As the bill was winding its way through Congress, there was some controversy as to whether public universities would be subject to the 21% excise tax. That debate has been resolved – public universities will not be subject to the 21% excise tax for salaries in excess of $1 million.

The result will be an uneven playing field in college sports.  Notre Dame, Duke, Stanford, USC and other private universities who typically pay coaches well in excess of $1 million will be forced to pay the 21% excise tax, while Alabama, LSU, FSU, Clemson and other public universities will not.

As an LSU fan, I’m just glad that my Tiger Athletic Foundation (TAF) dues will not be going up another 21% to cover this tax.  Losing my 80% deduction for my TAF “contribution” (I always loved that description) for my seats was hard enough.  And, I’m also glad to know that when LSU is looking for its next head football coach (hint: it will be VERY soon), we will have a competitive advantage over the likes of Notre Dame (which again, could be VERY soon). However, this is clearly not fair.  Congress should either exempt private universities from the excise tax or specifically include public universities – for my sake, I hope it is the former.  Then again, as I am an original member of the “I HATE DUKE AND CHRISTIAN LAETTNER” fan club, I wonder if Congress knew exactly what it was doing!


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