The NCAA and College Sports

The NCAA and College Sports Tim Paluf Topics • • • • • • • Overview History Structure Behavior Performance Policy Issues Recent News Overview What is the NCAA? • The National Collegiate Athletic Association (NCAA) is a voluntary association devoted to the sound administration of intercollegiate athletics. • 1,200 colleges and universities, athletic conferences and sports organizations • Split into 3 divisions: I, II, III • Executive Director Miles Brand Main Functions Govern • • • • To formulate rules of play To supervise the conduct of intercollegiate events To establish eligibility standards To legislate any concern Main Functions Promote • To initiate, stimulate and improve intercollegiate athletics programs • Student Athletes and College Sports Protect • Athletes • Coaches • Amateurism History 1905 • Athletic Association of the United States (IAAUS) 1910 • Officially became the NCAA 1921 • First National Championships held History 1948 • Introduction of the Sanity Code 1951 • Walter Byers named Executive Director 1952 • Began Nationally Televising College Football Games History 1972 • Title IX 1973 • 3 Divisions 1984 • Supreme Court Strikes down TV Plan History 1988 • Civil Rights Restoration Act 1999 • CBS paid record $6 billion for TV rights of March Madness 2003 • Miles Brand Takes over as head of the NCAA Structure Divisions: I, I-AA, II, III • Determined by size of school • football attendance • sports offered Entry • Minimum requirements Cartel Monopsony Structure Cartel NCAA as a Cartel • • An Association of firms that explicitly agrees to coordinate activities Earliest form: TV Enforcement of rules • • • Strict enforcement and severe punishment for cheaters Use of probable evidence Sanctions to punish cheaters Structure Monopsony NCAA as a monopsony • Single buyer in a market • Collective Monopsony power • Increases profits by collectively reducing the price paid for input Behavior Output Control TV Revenue • • • • $400 million 88% of Revenue Redistributes to member institutions Billion Dollar Basketball extension Behavior The College Television Plan • • • • • • Began broadcasting football in 1952 Complete Monopolistic control over TV rights Restrict Output: Limited Appearances, broadcasts Raised Price Split revenue evenly amongst members 1984 Supreme Court Decision Behavior Input Controls Controlling the cost of inputs: Athletes • Limited compensation • Recruitment rules • Scholarship limits Coaches: • Competitive • Professional leagues • Freedom of movement Performance Big Programs: Profit-Makers • Men’s Football and Basketball • Few Women’s Basketball Revenue Growth 1989-1997 • • • • Football 76% Basketball 74% Expenses growing half the rate of revenue From TV Contracts Sponsorships • Notre Dame/Adidas Policy Issues Title IX of the Education Amendment 1972 • “No person in the US shall on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal funds.” Civil Rights Restoration Act 1988 • Barred institutions that violate civil rights laws from receiving any federal money in any area of their entire operations • Proportionality Test Policy Issues Increased participation in Women’s Sports • • • • 1:27 in 1972 to 1:3 1998 Number of Women’s sports offered skyrocketed Cost increases Many Men’s sports cut Policy Issues Antitrust Law Suits 1982 • • • • • Big Schools unhappy about sharing TV revenue with small schools Previously limited to amount of TV appearances NCAA vs. the Board of Regents of the University of Oklahoma “Competitive balance” “Restraint of trade” Policy Issues Supreme Court ruled in favor of the schools in 1984 • Individual Colleges owned there own TV rights • Could seek local, regional, national, or cable contracts • Conferences and Schools can deal directly with Networks: ND/NBC Recent News Threat to input Control • Increased pressure to compensate athletes Potential loss of talent • Maurice Clarett • Lebron James Further Information and Questions • www.ncaa.org • www.ncaasports.com • Questions?