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Prominent football programs such as LSU and Miami have seen collective spending skyrocket, with reports indicating figures exceeding millions in sponsorship and advertising contracts with players. These deals often bear little relation to genuine market value, making many of them questionable in nature.
The IRS Intervention
As the situation grew murky, the IRS began to take notice of the collective structures that were forming. Many collectives were classified as 501(c)(3) charitable organizations, positioning themselves as non-profits. However, the low barrier to entry for what constitutes a charitable event raised eyebrows, particularly in light of massive payouts to college athletes.