Sunday, September 18, 2011

Government Intervention on College Football Economy

In a previous post a couple a weeks ago on The LongHorn network and the Big 12 Meltdown I mentioned how the college football economy is unique to any other economic system. In the college football economy the corporations (athletic programs) have more control than the government (NCAA) and the consumers(fans)... With the conference realignment getting national news the U.S. government looks for a reason to get involved. You see athletic conferences are actually tax free organizations that are banking billions yearly off of unpaid collegiate athletes.

After the announcement from the University of Pittsburgh and Syracuse that they would depart from the Big East and enter the ACC, an anonymous congressman from a state with a university that could be negatively impacted said
“I think the situation is rising to a level where getting Congress engaged may be unavoidable.”
This congressman believes that the government can intervene onconference realignment because of administrative issues regarding antitrust laws, taxes, and potentially Title IX. The problem with conference realignment is there will be athletic programs who will get left out and will be forced to play in a conference that doesn't receive an automatic BCS bowl bid for winning the conference championship. He also said
“If my school is somehow left out, my constituents are going to demand I do everything in my power to stop that.”

After hearing those comments we now know that the only fans with power are the same ones who almost caused our country to lose our AAA credit rating. Hooray... You now can expect a full blast of apocalyptic conference destruction on the east coast with the Big East unfolding. Meanwhile the soon to be former Big 12(10) has a political cat fight developing over Texas A&M's departure to the S.E.C. causing worry for Baylor's future as well as 8 other teams trying to figure out where they will be playing next year.

Now is the government involvement over conference realignment warranted... My answer is no because the government will make things seem "fair" but in reality a conference should only have to accept a team that earn the right to be in there conference like Texas A&M did.


Upper School Government and Economics said...

I completely agree with your point of view towards the football conferences and realignment. Honestly, I don't see what was wrong with the alighnment before...why change a good thing? I believe the problem is that unlike a normal economic system the consumers(fans0 don't have a say because they can't do anything about it because they aren't going to go to a different game because to watch a school that isn't thiers, but I think that the consumers will eventually get the say in the long run when people start to not apply to the schools that are messing up the system.
-- Jack L

Smith said...

I honestly did not know they were tax free organizations. Do you think or foresee the government trying to tax them? How do you think America would react to such a tax?

Taylor Epperson said...

Here is the reason why the NCAA should step in and stop conference realignment: the only sport that has been mentioned in the reasoning for moving conferences is football. The athletic programs, or corporations as earlier paralleled, do have more control than the NCAA, paralleled as the government, which is the problem. If this means that Congress needs to intervene, they should; rather than Congress intervening to impose their power on the conference situations, they should grant the NCAA more power by taking the authority from the individual universities and putting it in the hands of the NCAA. By doing this, the NCAA along with the individual universities can make the best decision for the future of the athletic program of all sports, not just football. As an economic system, college athletics should be an inverse mixed economy, where the NCAA has most of the power but with the universities having an influence on situations. They should be able to freely move conferences but only with the NCAA’s approval.

On another note, opportunity cost plays an important role in the changing of conferences. For universities like Texas A&M, they will be moving into a more competitive conference (when I say competitive, I am talking about football only) with the chance to make more money, but they will be losing traditions of the Big 12 and might be losing rivalries such as Texas and Texas Tech.

- Taylor E.