Amateurism Hiding the NCAA Cartel
President Theodore Roosevelt in 1906 urged for the creation of an organization to help implement rule changes needed to increase safety for football players. The organization that was founded in response to Roosevelt’s urging was the Intercollegiate Athletic Association of the United States. Four years after its founding the organization changed its name to the National Collegiate Athletic Association (NCAA). The NCAA’s main focus in the years following its founding was player health. As time went on though, the commercialization of college athletics started to shift the focus towards the financial stability of the NCAA’s member institutions. As revenue skyrocketed for football, so did the costs. This caused …show more content…
This rule has handed the NCAA a monopsony when it comes to the market for football players coming out of high school. The NCAA’s member institutions are the only buyer in this market; this has created a labor market where the NCAA has the power to extract economic rent from player. The NCAA has exercised this power and set a limit to player compensation that under compensates the players for their labor (Fliesher et al 1988). The NCAA is different than most monopsonies though because it’s a cartel with many different institutions, and not just a single entity (Fliesher et al 1988). The NCAA is also set up so that if a cartel member doesn’t follow the monopsony wage set they face stiff penalties (Fliesher et al 1988). This makes the NCAA a well-funded cartel with the structure to enforce monopsony wages on football players which make it easy to see why players have developed a feeling that they are being exploited. While the prior actions of the NCAA and its current stances point to them undercompensating Football players there still is no empirical evidence that has proven it. The need for empirical evidence is immense, but gathering this needed empirical evidence will be tough to …show more content…
This is because football is unique in that each position is affected by another position in a significant way. This causes any regression model to exhibit multicollinearity. While there are ways to deal with multicollinearity, there appears to be a limited amount of research into football player valuations, leading to the conclusion that there might not be a solution currently available. If multicollinearity is overcame though, the problems of getting accurate data will still be a possible issue. The data concerning football expenditures by schools is difficult to ascertain because of the way college athletics are currently structured. The data available about the current expenditure on football by schools are tied to a larger athletic department. This means that some expenditure for things that are shared between sports (athletic trainers, tutors, etc.) but attributed to football could lead to an overestimation of expenditures and the reverse relationship could exist too. This reverse relationship could lead to an underestimation of football expenditures. While these things could significantly affect any research into if the NCAA is using its powers as a cartel, and monopsony, to undercompensate players, but it doesn’t make any less
President Theodore Roosevelt in 1906 urged for the creation of an organization to help implement rule changes needed to increase safety for football players. The organization that was founded in response to Roosevelt’s urging was the Intercollegiate Athletic Association of the United States. Four years after its founding the organization changed its name to the National Collegiate Athletic Association (NCAA). The NCAA’s main focus in the years following its founding was player health. As time went on though, the commercialization of college athletics started to shift the focus towards the financial stability of the NCAA’s member institutions. As revenue skyrocketed for football, so did the costs. This caused …show more content…
This rule has handed the NCAA a monopsony when it comes to the market for football players coming out of high school. The NCAA’s member institutions are the only buyer in this market; this has created a labor market where the NCAA has the power to extract economic rent from player. The NCAA has exercised this power and set a limit to player compensation that under compensates the players for their labor (Fliesher et al 1988). The NCAA is different than most monopsonies though because it’s a cartel with many different institutions, and not just a single entity (Fliesher et al 1988). The NCAA is also set up so that if a cartel member doesn’t follow the monopsony wage set they face stiff penalties (Fliesher et al 1988). This makes the NCAA a well-funded cartel with the structure to enforce monopsony wages on football players which make it easy to see why players have developed a feeling that they are being exploited. While the prior actions of the NCAA and its current stances point to them undercompensating Football players there still is no empirical evidence that has proven it. The need for empirical evidence is immense, but gathering this needed empirical evidence will be tough to …show more content…
This is because football is unique in that each position is affected by another position in a significant way. This causes any regression model to exhibit multicollinearity. While there are ways to deal with multicollinearity, there appears to be a limited amount of research into football player valuations, leading to the conclusion that there might not be a solution currently available. If multicollinearity is overcame though, the problems of getting accurate data will still be a possible issue. The data concerning football expenditures by schools is difficult to ascertain because of the way college athletics are currently structured. The data available about the current expenditure on football by schools are tied to a larger athletic department. This means that some expenditure for things that are shared between sports (athletic trainers, tutors, etc.) but attributed to football could lead to an overestimation of expenditures and the reverse relationship could exist too. This reverse relationship could lead to an underestimation of football expenditures. While these things could significantly affect any research into if the NCAA is using its powers as a cartel, and monopsony, to undercompensate players, but it doesn’t make any less