Few organizational acronyms are more familiar to Americans than those of the National Collegiate Athletic Association (“NCAA”) and the Internal Revenue Service (“IRS”). Although neither organization is particularly popular,1 both loom large in American life and popular culture. Because there is a tax aspect to just about everything, it should come as no surprise that the domains of the NCAA and the IRS overlap in a number of ways. For many decades, college athletics have enjoyed unreasonably generous tax treatment—sometimes because of the failure of the IRS to enforce the tax laws enacted by Congress, and sometimes because Congress itself has conferred dubious tax benefits on college sports. Very recently, however, there have been signs of what may be a major attitudinal shift on the part of Congress—although, so far, there have been no signs of a corresponding change at the IRS.
This Article offers an in-depth look at the history and current status of four areas of intersection between the federal tax laws and college sports. Part I considers the possible application of the tax on unrelated business income to big-time college sports. It concludes that, even in the absence of any change in the unrelated business income statute, there is a strong argument that revenues from the televising of college sports should be subject to the unrelated business income tax. Part II examines the tax status of athletic scholarships. It explains that athletic scholarships, as currently structured, are taxable under the terms of the Internal Revenue Code but that the IRS seems to have made a conscious decision not to enforce the law.
While the first two Parts of this Article address areas in which the traditional sweetheart arrangement between the IRS and the NCAA remains in effect, the final two Parts of this Article consider areas in which Congress has—very recently—intervened to increase the tax burden on college athletics. Part III describes how Congress, three decades ago, explicitly permitted taxpayers to claim charitable deductions for most of the cost of season tickets to college football and basketball games and how Congress in 2017—to the surprise of many observers, including the authors of this article—repealed this special tax benefit. Finally, Part IV addresses issues of both statutory interpretation and policy raised by Congress’s creation, in 2017, of a twenty-one percent excise tax on at least some universities that were paying seven-figure salaries to their football and basketball coaches. This Article’s conclusion suggests the IRS should follow the lead of Congress and reconsider the administrative favoritism toward college sports described in Parts I and II.
On March 10, 2015, the music world was stunned when a jury in Federal District Court in Los Angeles rendered a verdict in favor of the heirs of Marvin Gaye against Pharrell Williams and Robin Thicke, who, along with rapper Clifford Harris, Jr., professionally known as “T.I.,” wrote the 2013 mega-hit song entitled “Blurred Lines.” The eight-member jury unanimously found that Williams and Thicke had infringed the copyright to Marvin Gaye’s “Got To Give It Up.” On appeal, the Ninth Circuit Court of Appeals affirmed the verdict and recently rejected Williams and Thicke’s Petition for Rehearing en banc.
The case is significant for a number of reasons. In typical music copyright cases—at least successful ones—the two works share the same (or at least a similar) sequence of pitches, with the same (or at least similar) rhythms, set to the same chords. The Blurred Lines case was unique, in that the two works at issue did not have similar melodies; the two songs did not even share a single melodic phrase. In fact, the two works did not have a sequence of even two chords played in the same order, for the same duration. They had entirely different song structures (meaning how and where the verse, chorus, etc. are placed in the song) and did not share any lyrics whatsoever.
Imagine this: Elle, an attractive blonde, brown-eyed female in Boston becomes an overnight celebrity for her YouTube video series, “Chasing Rings,” in which she bemoans the modern dating world in the form of her self-produced rap songs. In each video, Elle wears a different pink shirt. As her video blog continues to gain popularity, a New York clothing company develops an online advertising campaign supporting the legalization of gay marriage. The campaign is displayed on online news and social networking sites. One of the men featured in the ad wears a long blonde wig, has large brown eyes, and wears a pink tank top; the other is dressed in traditional male garb. The ad states, “He liked it, but he couldn’t put a ring on it.” The phrase, closely paralleling a well-known pop lyric, is used with pop celebrity Beyoncé’s permission. Elle, a law student, decides that this ad appears to reference her and decides to sue under her state-law right of publicity. Since the ads were displayed nationally, she hires an attorney to sue under Indiana law because she thinks she has the best chance of winning her case in that state. After initial discovery, the gay rights campaign agrees to settle the case for five million dollars because it thinks that Elle is likely to prevail. The ad campaign is shut down and the company is forced to downsize.
In the past decade, the entertainment industry has waged a very successful legal campaign against online copyright infringements. In a series of high-profile decisions, content industries have persuaded courts to accept expansive interpretations of contributory enforcement, to create novel doctrines of copyright infringement, and to apply broad interpretations of statutory damage provisions. Many private file sharers, technology companies, university administrators, and Internet service providers have felt the reach of this litigation effort. Yet a significant empirical anomaly exists: even as the copyright industry has ramped up the level of deterrence, online copyright infringements continue unabated.
Why has the legal battle against file sharers been so ineffective? The most straightforward explanation is that infringers are not deterred, either because the probability of getting caught remains remote or because the sanctions are not sufficiently salient. If that is the case, the expansive statutory damage award remedies in decisions such as Capitol Records v. Thomas-Rasset and Sony BMG v. Tenenbaum carry renewed promise for the entertainment industry.
With our culture’s celebrity obsession intensifying each year, it is not surprising that recent media attention has concentrated on the children of these famous faces. Unfortunately, there are currently no adequate federal or state laws in place to protect these children from being hounded by paparazzi and exploited by entertainment magazines and Web sites worldwide. This Note examines the evolution of antipaparazzi legislation and analyzes the inadequacies of current and proposed legal protections. Further, it recommends strengthening existing safeguards by creating paparazzi-free buffer zones around family-oriented areas and following international approaches to maintaining an adequate level of privacy, and consequently safety, for celebrity children.
For several years, HD DVD and Blu-ray competed to replace DVD and become the next-generation movie disc format. The battle was not fought with technological superiority but instead with exclusivity contracts. This Note analyzes whether these contracts violated the Sherman Antitrust Act (“Sherman Act”).
Because Kid Nation was the first reality show to feature minors exclusively, it provides a fitting springboard from which to evaluate whether reality children in general are covered by the FLSA’s child labor provisions. Although FLSA coverage must be determined on a case-by- case basis, a discussion of Kid Nation, and of reality television in general, will illuminate relevant characteristics of the genre and help guide future analysis of this issue. Given the untempered success and growth of reality television, it is unlikely that Kid Nation will be the last program to utilize the services of children. Again, a determination of FLSA coverage will hinge on three questions: (1) Are the children performing work?; (2) Are the children employees?; and (3) Are the children exempt as actors or performers?
In June 2005, the Supreme Court held that the peer-to-peer (“P2P”) networks Grokster and Streamcast1 could be held liable for contributory copyright infringement upon a showing that network administrators clearly expressed support for or took other affirmative steps to encourage infringement. In the Supreme Court’s only prior holding on the issue of secondary liability, Sony Corp. of America v. Universal City Studios, Inc., the Court established that a manufacturer could not be held liable for contributory infringement if the device was “capable of substantial noninfringing uses.” In Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., the Court focused on the networks’ culpable conduct-relying on an inducement theory-and came to a conclusion that would allow the lower court to find Grokster liable on remand without resolving the current circuit split on the issue4 or rethinking or reinterpreting its prior holding in Sony. This ruling essentially overturned the Ninth Circuit’s holding that Grokster was not liable for its users’ infringement merely by virtue of the fact that the system also had substantial noninfringing uses. The Grokster Court instead held that the Sony doctrine did not foreclose the possibility that an actor could be liable for contributory infringement, even if the device is capable of substantial noninfringing uses, when there is evidence the actor encouraged and induced illegal use of the product.
America’s fascination with fame and celebrities is self-evident. In our culture, fame is used effectively to persuade, inspire, and inform the public in almost every aspect of our lives. Thus, for celebrities, fame has an inherent economic value, which they endeavor to enhance and protect through the relatively recent legal doctrine of the right of publicity. Broadly defined, the right of publicity is the “inherent right of every human being to control the commercial use of his or her identity.” Celebrities invoke this right to prevent the unauthorized commercial use of their names, likenesses, or other aspects of their identities in order to protect and control their valuable personas.
Celebrities were recently deprived of a valuable asset. This time, however, the perpetrator was not an Internet hacker, a supermarket tabloid, or an unscrupulous business manager. It was the United States Supreme Court. Although State Farm Mutual Automobile Insurance Co. v. Campbell concerns the constitutionality of punitive damages, it may have the unintended effect of limiting celebrities’ nationwide rights of publicity.