The NCAA (NationalCollegiatee Athletic Association) is very complicated right now. We are only really referring to big-time college football, men’s football, and men’s basketball. Issues are revolving around the black market and the Adidas case where guys were arrested for handing money over. These things wouldn’t exist if there wasn’t pressure around young athletes on national television. Tons of money around them and they aren’t seeing any of it. These are enormous businesses, and these issues defy common sense.
One fundamental question asks if there is something to look at here or not. In 1984, a class-action suit was brought by the major football schools against the NCAA and Walter Byers negotiating to make their own television deals. This case, known as the Oklahoma Board of Regents V NCAA was a supreme court case where Notre Dame at the University of Texas thought that they should be able to make their own deals instead of going through the NCAA.
The NCAA responded to this by explaining that their actions were a restraint of trade and antitrust. They went to the Supreme Court and the court favored the NCAA, confirming that it was a restraint of trade and antitrust. The Athletic Director of the University of Texas, Frank Broyles, says, “These schools can now kill what they eat.” This began the proliferation of conference and school deals for the selling of television rights.
March Madness Keeps Schools Connected to the NCAA
Here’s the curious thing though. Around that same time, another significant college sports phenomenon started becoming extremely popular with the advent of cable television and ESPN. This is known as March Madness with college basketball. Many of the schools with excellent football programs also have excellent basketball programs. However, strangely, the now one billion contract for March Madness is still retained and controlled by the NCAA instead of the schools.
Why would these schools insist on having football rights but not basketball rights? The answer is that if they take basketball rights too, then they wouldn’t need the NCAA anymore. Without the NCAA and the student-athlete, their economic model falls apart. This beautiful thing that rakes in tons of money without paying anyone for it would be gone and there’s no justification for that.
Global Sports: The International Olympic Committee’s Rule 40
People who have no ethical or moral center are aggressively challenging sports business today. They don’t understand, and they don’t care. They don’t care if student-athletes are illegal or if closed professional leagues are illegal. They don’t care that the IOC (International Olympic Committee) has something called Rule 40, which doesn’t allow Olympic athletes to promote their sponsors while competing during the Olympics. The IOC controls all of the sponsorships for the Olympics, so they control the exclusive rights and make all the money.
These strict policies may be completely unfair, but they are what make them so brutally efficient and economically advantageous. They dispassionately, coldly, and clinically understand the models of profit.
Sports Management Education
Until you understand these types of sports business models, then you are just another guy calling up sports talk radio to give your opinion. You need to grow up. Do you want to run this thing? Do you want to own this thing? Do you understand what it means? Do you want to change this thing? If you think it’s a lousy system and want to change it, then maybe you need to join them to beat them because you have to understand it before you begin.
