Americans certainly love college sports, particularly football and basketball. After all, what is better than cheering on student athletes competing for the love of the game? Unfortunately, behind this facade the National Collegiate Athletic Association and university athletic programs are simultaneously running two seemingly diametrically opposed rackets; one taking advantage of the players and the other ostensibly giving them unfair benefits.
The NCAA is a tax-exempt, non-profit association that oversees the athletics of just under 1,300 universities. While the NCAA is not technically a government organization, it might as well be. It’s a burdensome bureaucracy that regulates the athletics of public universities, which are substantially funded and strictly regulated by the government. And like any government, the NCAA regulates in an attempt to restrict competition. As Lawrence Kahn noted, ‘Most economists who have studied the NCAA view it as a cartel that attempts to produce rents by restricting output and limiting payments for inputs such as player compensation.’[1] And don’t let the term ‘non-profit’ fool you. Some non-profits can be quite profitable. Indeed, the NCAA recently agreed to a $10.8 billion, fourteen-year contract with CBS and Turner Broadcasting to televise games. NCAA chairman Mark Emmert was rewarded for his efforts with a cool $1.7 million last year.
This post was published at Ludwig von Mises Institute on Tuesday, September 16, 2014.
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