Telecast deregulation and competitive balance: regarding NCAA Division I football

American Journal of Economics and Sociology, The,  April, 1995  by Randall W. Bennett,  John L. Fizel

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However, the dissent in the Supreme Court case said that the purpose of NCAA regulations is to prevent successful programs from "taking advantage of their success by expanding their programs, improving the quality of the product that they offer, and increasing their sports revenue" (Stelzer, 1986: 177). The dissenters continue by stating that "limiting the number of television appearances by any college is an essential attribute of a balanced amateur athletic system. Even with shared revenues, unlimited appearances by a few schools would inevitably give them an insuperable advantage over all others and in the end defeat any efforts to maintain a system of athletic competition . . ."

Echoing these sentiments, John Toner, the President of the NCAA, argued that unrestricted television would leave weaker football programs at a large competitive disadvantage. He said the primary problem of unregulated television would be the harm to recruiting at the weaker schools, since "television exposure is worth more than money in terms of competitive recruiting and selections of schools by individual student athletes" (Hearings: 84). Eddie Robinson, the coach of Grambling University an NCAA Division I-AA school, testified that television is the lifeblood of his program and is critical for the recruitment of athletes. He felt that the loss of television exposure would hurt his program's ability to "recruit the same kind of football players or athletes that we have been within the last decade" (Hearings: 93). James E. Delany, the commissioner of the Ohio Valley Conference, stated that the loss of NCAA controls would reduce competitive balance, "and be particularly harmful to all but a minority of the Division I-A membership," the traditional football powers (Hearings: 109).

Resolution of this debate has implications that extend beyond determining which football programs will flourish or fail. Football success or failure can also affect the academic mission of an institution. Tucker and Amato (1993) and McCormick and Tinsley (1987) show that success in football advertises the school and increases the number of student applications which, in turn, results in higher average SAT scores of the incoming freshman class. This means that a distribution of high-quality students shift over time in favor of universities with successful big-time football programs. The record of the football team also affects financial contributions to the university as a whole. Brooker and Klastorin (1981) find a positive relationship between football success and contributions to universities which in turn increases the funds available for academic programs. McCormick and Tinsley (1990) find a positive relationship between the football record and contributions to academic programs at Clemson University. Finally, in the case of public institutions, football success has the potential to result in increased support from state legislatures (Lederman 1988).

The success of NCAA Division I football teams also impacts the financial condition of a school's entire athletic program. Raiborn (1990) illustrates the primary role that football plays in the finances of Division I intercollegiate athletics. Football is the largest source of revenue to these athletic programs, providing 43% of athletic revenues in 1989. By comparison, basketball provided 17%, and all other sports provided 4% of athletic revenues in 1989. The remaining 36% of athletic revenues came from sources of revenues not tied to a specific sport, such as contributions from supporters. As stated earlier, these contributions are influenced by the success of the football program. Football is also the most important sport in providing a surplus of revenues over expenses for NCAA Division I athletic programs. In 1989, the average Division I football program's revenues exceeded expenses by 1.2 million dollars. These funds are available to finance the so-called non-revenue sports.