12.1 NCAA Sports Flashcards
On what grounds do sports economists argue the NCAA is not a single sports league or a production joint venture?
They contend that the NCAA is an association of independent institutions that coordinates rules and wage restrictions for players, rather than a single-entity league or true joint venture producing a single product.
Why do sports economists claim the NCAA functions as a cartel over college athletes?
Because it collectively sets limits on athlete compensation and benefits, effectively fixing wages and restricting the market for collegiate athletic labor.
What economic perspective might sports economists apply to the NCAA transfer portal?
They view it as a labor market mechanism, assessing how increased player mobility affects competitive balance, athlete welfare, and market efficiency.
Why do some observers consider the transfer portal an ‘unhealthy free-for-all’?
Critics argue that it leads to high roster turnover and potential ‘poaching’ of players, undermining team stability—even though economists often see it as a freer market for athletes’ services.
Name one distinct labor market characteristic in NCAA/collegiate sports.
Athletes operate under amateurism rules, which cap or limit compensation and benefits, unlike in professional leagues where players have more direct bargaining power.
How does the recruitment process in NCAA sports differ from professional labor markets?
It’s governed by stringent eligibility rules, scholarship limitations, and recruiting calendars, creating a tightly regulated market with less freedom of movement for athletes.
Which two sports typically generate the majority of athletic department revenue at FBS schools?
Men’s football and men’s basketball, which together account for about 58% of total athletic department revenue.
What is the significance of the distinction between ‘revenue sports’ and ‘non-revenue sports’ in NCAA economics?
Revenue sports generate the bulk of athletic income (often funding facilities, salaries, etc.), while non-revenue sports rely on these funds for support and are usually not self-sustaining.
Why do caps on player compensation lead to cross-subsidization in NCAA sports?
Because athlete wages are restricted, excess revenues from football and basketball flow to other sports programs, coaches’ salaries, facilities, and administrative costs.
According to the research by Garthwaite et al., how is each additional dollar of football/basketball revenue allocated?
$0.31 reinvested in football & basketball
$0.11 to other sports
$0.07 to women’s sports
$0.03 to football coaches
$0.03 to non-football coaches
$0.09 to administrators
$0.20 to facilities
Does higher football/basketball revenue increase overall university funding for athletics?
No. Studies show it does not change the amount of university funding for athletics; it merely reallocates existing athletic revenues.
