College athletics can’t continue the way they’re currently constructed, so maybe it’s time we accept them for what they are.
With many states in budgetary crises, the funds allocated to public universities have come under heavy scrutiny. In considering how much public money should go toward higher education, most legislators have decided that tuition should cover more costs, while the state should cover less. Due to these fiscal questions, we should be paying more attention than ever before to how academic institutions are linked to their costly athletic endeavors.
At schools like Kansas, Louisiana State, Penn State and Virginia Tech—universities that have all debated or approved tuition increases well surpassing inflation for the 2011-2012 academic year—the athletic departments are big businesses. The NCAA and its affiliated conferences comprise a very effective cartel in every sense of the term. Cartels, economically speaking, are a group of firms that collectively restrict output to artificially raise prices. Most sports leagues can be accused of this, since they agree to play a limited number of games per year, which raises prices for the games they play and the TV contracts they sign.
The NCAA takes it one step further. They restrict input as well, because they only allow a certain number of athletic scholarships per team. The combination of these restrictions, plus the historical devotion of fans to very specific brands (Alabama football or Texas football, not just NCAA football in general) leads to a very profitable business model for many universities, including the ones mentioned above. And in comparison to the four major professional sports, where labor makes up more than half of expenditures, the NCAA has reduced player costs to roughly nothing,
In his recently published book Big-Time Sports in American Universities, Duke professor Charles T. Clotfelter considers how universities justify their exposure into the profitable entertainment business, which has seemingly little overlap with the academic pursuits mentioned in nearly every university mission statement. Only 9.6 percent of the mission statements reviewed by Clotfelter mentioned athletics, and if we are to take these statements seriously, universities refuse to acknowledge their most visible and public department as a major function of the institution.
If athletics are not explicitly part of a university’s mission, then how are athletics at least related to their purpose? One of the first responses you will usually hear is the “Flutie Effect”, which refers to the famous Hail Mary thrown by the Boston College quarterback in 1984. Following the heave, BC witnessed a 12 percent increase in applications the following fall. If anyone was seeking confirmation that athletic success could spill over into academics, Flutie’s pass was a godsend.
Northern Iowa has a similar story. After upsetting Kansas in the 2010 NCAA tournament, their applications reportedly increased by 30 percent. Professors and researchers have tried time and again to find a tangible explanation for why prospective students surge towards successful athletic programs. One of their explanations is quite simple, if unsatisfactory: high school students watch college kids having fun at their sporting events on TV and want to experience the same. Success only heightens the elation. It plays into a lot of high schoolers’ image of what college should be.
Even if the Flutie Effect is significant, it still seems insufficient as justification for universities spending millions on big-time sports every year. After all, most schools are experiencing a surplus of applications, not a deficit. But we can extrapolate the Flutie Effect from prospective students to the fan base as a whole.
As Clotfelter explains, there is an economic term called “consumer surplus” that is vital to understanding the business of sports. When a consumer agrees to a price on a good or service, they will often derive benefits of greater value to them than the price they paid. The difference between the benefits derived and price paid is the consumer surplus. Another way to think of it is: what is the difference between the price you paid and how much you would have to be paid to give up that good or service? How much would you have to be paid to not watch college football or basketball this year?
For college sports, the consumer surplus is tremendously high for many Americans, which provides insight into how important this entertainment is to a lot of people’s lives. Look no further than the packed stadiums on Saturdays every fall across the country. In several cases, entire towns shut down so people can watch the Bulldogs, or the Volunteers, or the Buckeyes play.
The value in these products to a lot of fans is tied to the university, because it is a method of showing support for the institution that is part of their identity. When the Cameron Crazies paint their faces in blue and white, are they rooting for Duke, or are they rooting for an institution they are contributing to, and thus partially rooting for a status symbol of themselves? Is this any different than professional sports, where at least for die-hard fans, the team you root for becomes entrenched in your identity? If the consumer surplus of collegiate sports truly is this high, then this could be a possible justification for big-time sports at universities, since taxpayers largely fund the athletic departments (whether we like to acknowledge this fact or not).
However, this doesn’t get us any closer to our original question: how are academic endeavors linked to big time athletics? It might just be a matter of branding.
The typical athletic department functions differently from its academic equivalents. Academic departments are decentralized to give more research and intellectual freedom to individual professors. Athletic departments are hierarchical, with coaches having complete control over athletes’ lives. Academic departments have many dispersed and muddled agendas—graduation rates, academic achievement, research goals, rankings, prestige, and so on. Athletic departments have an identifiable, solitary goal: win games. In short, athletic departments resemble businesses much more then they do schools.
Maybe athletic departments simply should be treated like businesses. This is heresy to many and would violate the “purity” of the college athlete’s motivation, but those still arguing that college athletes possess entirely pure motives must have their heads deep in the sand.
If athletic departments were treated like the businesses they are (at least big-time football and basketball), then this would solve the issue of paying players, since they could get paid in line with the revenues the department generates.
More importantly, donations to the athletic departments would no longer be tax-deductible, so if wealthy individuals were seeking a way to give back to their alma maters instead of to the state or federal government, they would be more likely to donate to the academic side of the institution. Likewise, athletic departments could become self-sufficient, alleviating tensions in funding between academics and athletics.
Such a move would probably not cure the fiscal issues afflicting many public universities today. (After all, there’s not much public universities can do when their states are many billions of dollars in debt.) But, privatizing athletic departments would allow lawmakers to focus on the academic side of universities without slighting the importance of athletics to their respective communities. Big-time college sports are self-sustaining precisely because few people want them to go away.
Universities encourage students to be intellectually honest with themselves as part of their education. Ironically, it’s the universities who aren’t being honest about the function of college athletics, clinging to antiquated notions of student-athletes that don’t reflect the profitability of their marquee teams. Once we can start being honest about the business of college athletics, it might do both the athletes and schools some good.
—Photo AP/Amy Sancetta