ABSTRACT

This chapter analyzes collegiate sports. While athletes are not paid, college coaches and athletic directors are very well paid, earning more - relative to the revenue stream - than their professional counterparts. Whether a college profits from athletics depends on how one defines revenues and costs. Even if a college does not profit financially, sports may increase the number and quality of applications to a school or the level of alumni donations.

The NCAA is a monopsony in its dealings with the athletes. Like other cartels, the NCAA has been attacked by its own members, an example of the Prisoner’s Dilemma. Antitrust lawsuits have also challenged the NCAA’s restrictions, particularly on payments to athletes.

Recent court rulings have chipped away at the NCAA’s restrictions on athletic compensation and have given them the chance to capitalize on their names, images, and likenesses. This has had a profound impact on some athletes’ incomes.

As in professional leagues, discrimination based on race and gender has long been a part of college sports. For many years, African American athletes had limited access to schools other than Historically Black Colleges and Universities. Today, Title IX has increased opportunities for women, though its impact on men’s sports remains controversial.