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Agency Behavior in a Nonprofit Setting: Effects of the 1984 Supreme Court NCAA Decision

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  • Kathleen A. Carroll
  • Brad R. Humphreys

Abstract

The NCAA is commonly viewed as a cartel. We model the cartel relationship between the member teams and the NCAA central organization as a principal-agent relationship. Our model predicts imperfect agency behavior on the part of the NCAA with corresponding overregulation relative to the level preferred by the member teams. We empirically test the model by examining the impact of the 1984 Supreme Court decision that reassigned the telecast rights for intercollegiate football from the NCAA to the individual member teams. Our empirical estimates of telecasts, attendance, and competitive balance support the prediction of imperfect agency behavior by the NCAA.

Suggested Citation

  • Kathleen A. Carroll & Brad R. Humphreys, 2003. "Agency Behavior in a Nonprofit Setting: Effects of the 1984 Supreme Court NCAA Decision," UMBC Economics Department Working Papers 03-106, UMBC Department of Economics.
    • Handle: RePEc:umb:econwp:03106
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    File URL: http://www.umbc.edu/economics/wpapers/wp_03_106.pdf
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    References listed on IDEAS

    as
    1. Martin B. Schmidt & David J. Berri, 2001. "Competitive Balance and Attendance," Journal of Sports Economics, , vol. 2(2), pages 145-167, May.
    2. repec:ucp:bkecon:9780226253268 is not listed on IDEAS
    3. E. Eckard, 1998. "The NCAA Cartel and Competitive Balance in College Football," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 347-369, June.
    4. Patricia L. Pacey, 1985. "The Courts and College Football: New Playing Rules Off the Field?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 44(2), pages 145-154, April.
    5. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
    6. Randall W. Bennett & John L. Fizel, 1995. "Telecast Deregulation and Competitive Balance," American Journal of Economics and Sociology, Wiley Blackwell, vol. 54(2), pages 183-199, April.
    7. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    NCAA; Intercollegiate Football; Broadcast Regulation; Antitrust Policy;
    All these keywords.

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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