quo vadis
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I Root For: USF/Georgetown
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RE: NCAA FBS Division Athletic Department Revenues
(11-15-2019 09:00 AM)mturn017 Wrote: (11-14-2019 07:31 PM)quo vadis Wrote: (11-14-2019 02:45 PM)mturn017 Wrote: (11-14-2019 02:17 PM)quo vadis Wrote: (11-14-2019 02:02 PM)mturn017 Wrote: Not my opinion, by definition. You are trying to think of these entities as operating on a for profit basis and they are not. If you look at the audited financial statements required by the NCAA, the only way USF has a deficit is if the expenses exceed the revenues (including student fee allocations). This is the way it is and you can write it off as accounting semantics but the accounting is different from for profit entities because the purpose is different.
Who says USF is not trying to make a profit?
I do write counting student fees as book-cooking accounting because that is the fairest way to describe it. Soaking your own students with fees is IMO robbing your left hand to pay your right hand. One group of students forced to fund another. Wrong morally too. Saying it is OK by the NCAA is meaningless because the NCAA benefits from the robbery accounting.
Hey, if you prefer your opinion, more power to you.
There’s no such thing as profit for nonprofit colleges. It’s literally in the name. I’m not making this up and it’s not my opinion. What about FASB? Is their opinion meaningless too?
You're kidding, right? It's certainly possible for a non-profit entity to have revenues exceed expenses, which in parlance is a "profit". There's even a body of law dedicated to handling these situations:
"Despite how the name sounds, nonprofits can and do sometimes make a profit. Nonprofit corporations, unlike other forms of business, are not designed to make money for owners or shareholders. Instead, nonprofits are formed to serve a government-approved purpose, and are accorded special tax treatment as a result. Whether or not the profit a nonprofit makes is taxed is based on whether the profit was generated from activities that are "related" or "unrelated" to the nonprofit's purpose."
https://smallbusiness.findlaw.com/incorp...rofit.html
Even had you been correct, it would have been an exercise in pedantry. For some reason, you seem to just want to help schools that are soaking their own students to pay for "scholarships" for other students, the athletes, and salaries for coaches cloak that in the false language of not running deficits.
Oh it's very much an exercise in pedantry but as I said earlier the semantics are for a reason which is demonstrated in the bolded part above. But in accounting parlance "profit" implies a net revenues over expenses that is paid to an owner of a company. In the nonprofit and governmental world of fund accounting "surplus" is probably a better word. Regardless what you call it you're absolutely right that it is possible and the goal of all organizations to have revenues exceed expenses. Otherwise you're not going to be solvent for very long and the lights get turned off. But where you're wrong is that there's no capital or equity structure for nonprofits so all sources of money received is considered revenue. A restaurant owner that has to put his own money into his business to keep it afloat either made a loan or a capital contribution. A charitable foundation grantor that puts his money into the organization has made a gift. That gift is revenue to the organization. Athletic departments are not stand alone entities but arms of their colleges. Most, if not all are allocated some money from either the colleges general fund or fees collected for that purpose. This is included in the revenues of the department's fund ledger. I'm not talking about this from a moral point of view. My personal opinion is that it's college athletics, not professional. It's unreasonable to think that field hockey or tennis or track and field should be self sustaining the same as a colleges drama or robotics teams should not have that expectation. If they do, great. The fact that football and basketball have become big money makers doesn't change this situation. Is there a point that too much is allocated to these endeavors? Sure, absolutely. That's a decision for the presidents and board of directors of each university or college to make. But you said that it was my opinion that the money transfered to athletics is not "revenue" and that to include it is "cooking the books" (your words). It's not just me telling you you're wrong. The NCAA, Dept of Education, Financial Accounting Standards Board and the IRS all disagree with you too.
You failed even at a pedantic level, as clearly, non-profit colleges can earn a profit. The link I provided shows that. It's funny that you now want to resort to being willing to use other language, like 'surplus', once that pedantry backfired. As for your example of a non-profit board member who makes a donation to his charity is making a gift, which should properly be called revenue for the charity- I agree, that is correct. But also not relevant, because that board member voluntarily made the gift. I've agreed all along that when students choose to buy tickets to athletics, that is valid revenue too, because it is voluntary. Mandatory fees, no, for the same reason. Not voluntary.
As for your claim that I'm just fundamentally wrong in saying mandatory student fees are not revenue, it makes no sense, because I'm well aware that the NCAA, Department of Education, FASB, and IRS all consider the money sucked out of students in mandatory fees to be athletic revenue.
My claim is just that they are wrong to do so. They aid and abet the covering up of athletic deficits by calling mandatory fees compelled from members of the university community as athletic revenue.
So I am fully aware of how things *are*, my point is that they should *change* because how things are isn't right.
And I disagree with your comparison of college athletics teams to robotics or drama productions, because the latter are academic activities, hence central to the mission of the university, while athletic activities are not. And even if we agreed that they all should be regarded as the same, wake me up when the hockey and softball players are assessed a special $1000 a year mandatory fee to pay for scholarships for the robotics and drama club members.
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