Opinion Graphic
As the one-year anniversary of the signing of House Bill 2 approaches, the economic fallout from the legislation is continuing to be felt across North Carolina. In response to the bill, many companies, recording artists and athletics associations have cancelled expansion plans and events in the state, including PayPal, Bruce Springsteen and the NCAA. Following the passage of the bill, the NCAA removed seven championship events from North Carolina, along with 10 neutral-site championships.
This is a significant shift from previous years, where North Carolina held several high-profile NCAA events, including hosting the NCAA Tournament, some of which was hosted in PNC Arena. The bill, commonly referred to as the “bathroom bill,” prohibits transgender individuals from using the restroom that coincides with their gender identity, as well as prohibiting local ordinances protecting members of the LGBT community and expanding discrimination laws. However, North Carolina Representative Mark Brody has singled out the NCAA and plans to propose legislation to investigate whether the organization violated its tax-exemption status by relocating several championship sporting events from the state. Brody views this action as a breach of the IRS’ rule prohibiting “excessive lobbying.”
This will be an uphill battle.
According to the IRS, amateur sports organizations can participate in “limited forms of lobbying,” although whether the removal of the events are considered lobbying is debatable. The IRS website describes lobbying as “contacting or urging constituents to contact employees or members of the legislative body for supporting or opposing legislation or advocating for the adoption or rejection of legislation,” and while we can infer the NCAA’s opinion on the adoption of HB2, all official statements neither deny or confirm their support of the bill.
In fact, most of the official statements focus on reaffirming the organization’s commitment to “provide a fair and inclusive environment for athletes and spectators at their sporting events.” HB2 is mentioned, but they are hardly forcing the legislature’s hands to repeal the law. They are not encouraging constituents to take up arms or contact their representatives and while the economic blow of not having the events in North Carolina may upset Brody, it is hardly a crime to take your business elsewhere.
Choosing not to host several sporting events is a smart business move brought about by poorly constructed and rushed legislation. In response to the bill several states have barred travel for state employees, including New York, Washington and Connecticut. A move that has the potential to affect student-athletes’ ability to participate in events held in North Carolina, and not to mention, the negative press that has the potential to impact the number of people willing to travel to our state to attend these events.
While Brody sees “excessive lobbying,” I see an opportunity for the NCAA increase their bottom line elsewhere. Although the NCAA is classified as a nonprofit, it still pulls in a large amount of revenue, around $912.3 million in 2015. This revenue keeps the association and its events running. The more revenue they take in, the more they will be able to spend in the next year. If North Carolina is no longer the best option to maximize revenue, should the organization be punished? And if so, should they be the only organization at risk of losing their tax-exempt status? After all they are not the only organization to pull events from the state and they surely won’t be the last.