BSLW6604 Lecture Notes - Lecture 17: 6 Years
8 Jun 2018
School
Department
Course
Professor
College Sports
1. Industry of College Sports
a. Definition of an industry
i. A collection of firms, each of which is supplying products that have some interest
and substitutability to some potential buyers
b. Economic Terms
i. Firms
1. Colleges & universities
a. 1060 schools in NCAA athletics
b. Only 340 Division 1 institutions
c. Only 64 institutions in the Power 5 conferences
ii. Product
1. Entertainment to potential fans and buyers
iii. Inputs
1. Capital: facilities
2. People: athletic directors, coaches, staff, athletes
c. Revenue Sharing via conferences
d. Cartel?
i. An organization of firms that agrees to pursue joint policies with respect to key
aspects of the environment in which the firms operate
2. Current Environment: The NCAA
a. General
i. An unincorporated, voluntary, private association, consisting of nearly 1000
members, divided into three levels
ii. All college teams, conferences, coaches, administrators, and athletes must abide
by its rules
iii. Purpose
1. “To maintain intercollegiate athletics as an integral part of the
educational program and the athlete as an integral part of the student
body and, by so doing, retain a clear line of demarcation between
intercollegiate athletics and professional sports”
b. Divisions
i. D1: divided into I-A, I-AA, I-AAA
1. Strive for national prominence
2. Sponsor at the highest feasible level, spectator-oriented, income-
producing sports of football and basketball
a. Further divided into BCS and FBS divisions
ii. D2
1. Broad participation
2. Serve the participants rather than the spectators or general public
iii. Membership in divisions is based on:
1. Sponsoring a minimum number of sports programs, restriction on athletic
scholarships
2. Football stadium size and attendance
c. Financial success
i. NCAA itself estimates that college athletics generates over $10 billion in revenue
annually
ii. Television contracts
1. NCAA men’s basketball - $771 million a year
a. 8 year extension for $8.8 billion (to 2032)
2. BCS football - $5.6 billion for 12 years
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