ECOOMICS IN NCAA

The Economics of Amateurism and College Sports

The Economics of Amateurism and College Sports

Introduction

Over the decades, college sports in the United States have become increasingly popular with a record number of viewers tuning in every year. Every year in March, an increasing number of audience watches a game of football or basketball between two competing colleges. This transmission is famous by the name of “March Madness” which sees approximately 60 college level teams compete for the national championship trophy. The level of interest is comparable between college football and basketball, drawing millions of viewers and soaring television rating points.

Football and basketball is a beacon of hope college level students. Every year, National Football League and National Basketball Association conduct draft picks, in which professional teams select the best players. During the introduction phase prior to a game, the newly selected college graduates are introduced by identifying their colleges.

The NCAA or the National Collegiate Athletic Association is the most respected competition that pits colleges together for the national trophy. The NCAA holds competitions for basketball and football every year. The NCAA events match the professional basketball and football leagues in terms of popularity. According to statistics from 2006, NCAA member colleges made a staggering $4.2 billion from the basketball event. This amount was $1 billion more than what professional basketball teams earned in the NBA in the season of 2004-2005 (Fizel & Fort, 2004).

In addition to the earnings that colleges made from advertizing and ticket sales, the NCAA holds contracts with approximately 30 organizations. These companies produce official merchandise such as official game videos and team apparel. These contracts earn approximately $4 billion through licensing fees every year.

There are some experts that consider NCAA is becoming a monopoly by accumulating all the earning. Critics believe NCAA is an amateur organization; it does not compensate young college athletes with their due share depending on the effort they put in. This holds true in case of video games that have players based on these college athletes. College athletes do not receive any royalty from the NCAA for being in the video games like professional players do.

Over this matter, the NCAA maintains it stance of amateurism and its commitment toward it. In June of 2010, NCAA handed out severe penalties on the University of Southern California, when one of its athletes and current NFL player, Reggie Bush, purchased a lavish residence in collaboration with a local businessman. NCAA claims that the businessman was in contract with the athlete over his footballing career. This claim by the Association shows its commitment toward keeping the athletes away from money at a young age.

According to the NCAA, a professional team is an organization that provides its player with compensation that caters to the necessary and actual expenses of the individual for participating in the team. The NCAA events have teams in three divisions; Division 1, Division 2 and Division 3. The team playing in Division 1 earns the most amount of revenue ...