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Financing Intercollegiate Athletics: The Role of Monitoring and Enforcing NCAA Recruiting Regulations

Author

Listed:
  • Brad R. Humphreys

    (University of Illinois)

  • Jane E. Ruseski

    (University of Illinois)

Abstract

Many economists view the NCAA as a cartel in the market for college athletes. Financially, this cartel allows NCAA members to attract and retain college athletes for the price of a “grant-in-aid” without competitively bidding for the labor services of student-athletes, greatly reducing operating costs relative to a competitive market for athletes. A functioning cartel must have both monitoring of the members and an enforcement mechanism to punish violators. We investigate the factors that explain observed periods of probation in NCAA Division I-A football over the period 1978-2005. From 1978-1993, but not after, lagged winning percentage, unfilled stadium seats, and years of head coaching experience explain probation. The NCAA changed its enforcement policy in 1993, and football conference stability decreased as well during this period. These changes may explain the reduction in predictability of probation.

Suggested Citation

  • Brad R. Humphreys & Jane E. Ruseski, 2006. "Financing Intercollegiate Athletics: The Role of Monitoring and Enforcing NCAA Recruiting Regulations," International Journal of Sport Finance, Fitness Information Technology, vol. 1(3), pages 151-161, August.
    • Handle: RePEc:jsf:intjsf:v:1:y:2006:i:3:p:151-161
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    More about this item

    Keywords

    NCAA; cartel; rule violations; monitoring;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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