Art Carden  

College Football Season is Here: How does the NCAA Stay Afloat?

Daniel Kuehn on Immigration... Ronald Coase, 1910-2013...

College football season has started. I plan to go to a few Samford games and I'll keep up with my beloved Alabama Crimson Tide, but this is yet another year when I'm going to try to dial back my enthusiasm for my favorite spectator sport.

Now here's a question that causes me to lose sleep and to question my conviction that labor markets are generally efficient: what keeps the NCAA from falling apart? It's a cartel that is very successful at keeping its members from paying players their market prices. What keeps the cartel from dissolving?

Note: I was going to offer a hypothesis about revenue and non-revenue sports, but Stanford University Press was kind enough to send me an unsolicited review copy of Rodney Fort and Jason Winfree's 15 Sports Myths and Why They're Wrong, and chapter 1--the first myth--is "Revenue Sports Pay for Nonrevenue Sports."

If you're interested in a decent read, here's an article on redistribution in college sports I wrote for Forbes early last year.

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COMMENTS (2 to date)
john hare writes:

The illusion they are selling is powerful enough to attract a continuous supply of sacrificial bodies. For many of the players, it is the illusion of a real shot at the pros, somewhat like the lottery illusion that "Somebody has to win it." It is unlikely that any reasonable percentage of the players have any realistic idea of the odds they are facing for pro stardom against injury and wasted youth. There is also the illusion in many 18 year olds that sports leads to the glamour life with almost unlimited access to alcohol and women.

The heady thrill of hundreds of people cheering in high school becomes anticipation of tens of thousands cheering at college. The addictive attention seeking is part of the motivation for youngsters just leaving home for the first time.

The low or no cost education is wasted on many of them except for some signaling. Stories are legion of players too dense or unmotivated to actually learn.

As for the spectators, I have no idea how so many people can get so exited about watching something they are not a part of. I want my marker to say "participant", not "spectator".

BC writes:

I don't think that athletic programs are properly characterized as revenue-generating businesses of which players are labor. Historically, at least, athletic programs were extracurricular enhancements of the student-athletes' college experience, so the student-athletes were the beneficiaries, rather than employees, of the programs. I would claim that's still the case today, even if many athletes view the programs as their main curricular activity rather than an extracurricular. Granted, some student-athletes may be motivated in part to play a sport for the scholarship to pay for their education. However, most athletes derive at least some recreational value from participation. After all, millions of amateur athletes participate in sports at recreational levels not only without pay but often incurring out-of-pocket expenses as well.

At lower levels, athletes sometimes raise funds to pay these expenses through fund raisers like candy bar sales and car washes. We would not characterize those athletes as unpaid labor in a candy business or car wash. At the major college level, such funds can be raised through ticket sales and television contracts. All of these funds are poured back into the athletic programs for the benefit of the athletes: top-notch facilities, training and weight rooms, special meals, charter flights and buses, hotel stays (even for home games), etc. Even the high salaries paid to coaches benefit the athletes by allowing them to play under professional-caliber coaches. (Consider that many amateur athletes would actually pay money out-of-pocket to attend camps taught by these coaches.) Athletic department revenues are better thought of as really successful fund raisers and, unlike car washes and candy sales, the athletes don't even need to do extra work beyond playing the sport.

From that perspective, there is little incentive for a university or conference to bust the "cartel". Any additional "profits" would just be spent on more lavish athletic resources rather than going to the rest of the university. Athletic Directors and coaches might benefit since larger athletic budgets might result in larger salaries. However, the ADs and the coaches don't determine the universities' policies on paying players or staying in the NCAA; the university presidents and boards of regents set those policies.

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