I guess the real question is whether those services, etc. are being charged to the AD at fair value, but I'd have to think at least some reasonable attempt has been made to allocate accordingly. In other words, I don't look at this as a "cash-grab" by the University in the same way you seem to look at it. Maybe some other schools comp this to the AD (probably some do and some don't, I dunno), but it certainly isn't a Mafia-style "protection fee" where the school is just robbing them without the AD getting any real value.
Of course, the "tax" is an overhead allocation for "services." And, of course, the real question is whether it's "reasonable," whatever that means? My question is why would you start an argument about how you "look" at this versus how I look at it when you also make it clear you know nothing about it?!
Cordova changed the basis for the Athletic Department's overhead allocation to square footage of facilities, which clearly was to the disadvantage of the Athletic Department. This resulted in an increase in the AD's internal tax from about $0.6M (in 2006) to $3.5M last year, which put Purdue -- one of the smallest AD's in the B1G -- near the top of B1G in terms of $ transferred from the AD to the university! And you're naive if you think this was intended by Cordova and the BOT to be "reasonable" -- it was a pure "cash grab" -- meanwhile, all us dumb Purdue alums/fans proceeded to blame DH1 and Painter for our troubles, just as Cordova and the BOT figured we would. Please see article below from this past spring:
Agreement keeps more money inside Purdue athletics
Purdue athletic director Morgan Burke called it a substantial action by university president Mitch Daniels and the board of trustees.
During the next three years, the administrative charge to the athletic department will be reduced by $2 million, giving Burke funds to pay for the upcoming full cost of attendance scholarships and offset ticket income with the reduction of student prices.
"In many respects, the board and the president — at least out in the blogs — there's been this criticism that there isn't a support of intercollegiate athletics," Burke said. "A lot of people give you rhetoric but this is a very substantial action that will allow us to take care of cost of attendance, allow us to buy down the student rates so we could offer a very attractive package," Burke said.
The athletic department will now pay $1.5 million to the university for internal services compared to nearly $3.5 million during the last fiscal year.
"I made it clear from Day 1 that we expect to pay for the services we receive, but could we look at other allocation methods," Burke said. "I don't want the faculty and the campus to say — Mitch is subsiding athletics. The university still feels it appropriately represents the services that we consume internally."
The previous charge to the athletic department was based on square footage. Burke spoke to Daniels and the board last fall about exploring a different option.
"It's hard to value what a payroll system costs. We don't meter our facilities, so we don't know what our utility bill is," he said. "I suggested we look at a percentage of gross revenue, which is a metric used by many other Big Ten schools. I suggested we be placed about in the medium of the Big Ten in terms of the payout."
Before the Big Ten signed its 10-year television deal and the debut of the Big Ten Network in 2006, Purdue's athletic department was charged approximately $600,000 for services. However, the yearly increase in television revenue also increased the amount the athletic department was charged by the university.
The next three years coincides with the end of the current TV deal. The Big Ten will have a new television contract starting in 2017-18.
Burke estimated cost of attendance scholarships, which cover expenses that fall outside athletic scholarships, will be about $1 million to Purdue. In January, the Power Five conferences — Big Ten, Atlantic Coast, Southeastern, Pac-12 and Big 12 — approved providing cost of attendance scholarships beginning Aug. 1.
About $500,000 will be used as replacement revenue because of the new student ticket pricing structure. Students can purchase a $99 boarding pass, guaranteeing a ticket to all seven home football games and an opportunity to purchase tickets to men's and women's basketball and volleyball games. In 2014-15, a student VIP Card was $250.
Burke said the remaining $500,000 will be used for other areas in the athletic department.