Market Power

Musings by an academic economist on the power of markets and the power over markets.

Tuesday, November 09, 2004

The Cost of Amateurism

The stuff that got the University of Missouri basketball program put on probation has nothing on these allegations made by Maurice Clarett, formerly of the Ohio State University.

What’s worse for Buckeye fans is that his claims are being corroborated by others – but not everybody. See here. We’ll have to see how this shakes out.

None of this is surprising to those who follow the economics of college sports. The amount of money generated by NCAA Division 1 college football and men’s basketball teams dwarfs what players can receive. Unfortunately, some of the things that they can receive are things they don’t care about.

When players can’t be compensated by legal pecuniary means and if they don’t care about their education, they will seek alternative forms of compensation. Cars, under-the-table cash, and easy classes are some ways schools and boosters compensate players. Nice playing and training facilities are other ways to compensate players. Players may also seek out other forms of compensation from people other than boosters (for example, shaving points for gamblers).

To battle this stuff, the NCAA has rules upon rules upon rules about what can and cannot be done and millions of dollars are spent by the NCAA in enforcing its rules and millions of dollars are spent by member schools in an effort to either play by the rules or, in the jaded person’s view, not get caught.

As I ponder these questions, I am frequently left with this thought: “What’s the cost of amateurism?”