The College Football Industry
Rodney Fortand James Quirk
The analysis of college sports has proceeded without any comprehensive, rigorous theoretical foundation. Seeking a remedy, we derive many well-known, but heretofore casual, observations about the players' and coaches' markets, examine the effects of play-for-pay on profits and competitive balance, and profile cheating by coaches and athletic departments. The analysis sheds light on arguments that paying college players will only benefit large-revenue colleges. No new empirical investigation is undertaken, but our results are related to past findings by other researchers. The conclusion lists further testable implications of the model for future reference.
Major college football production is comprised of three components. Players choose between different scholarship offers. The level of coaching talent chosen is based upon its contribution to winning programs. Player and coaching talent markets also are distinguished by their relative level of competitiveness, in the economic sense of that word.
We model college football programs as profit-maximizers. There are two reasons why this is justified. The first argument follows the same logic that Fleisher, Goff, and Tollison ( 1992, p. 21) offer concerning the NCAA:
The fact that the NCAA is a nonprofit organization simply changes the balance sheet item which is maximized. Instead of "profits" or returns to shareholders, it may be implicit subsidies to the university general operating expenses, coaches' salaries, office facilities, and so on which are maximized. The accounting practices of colleges and universities merely mask the recipients of cartel rents.