Markets strongCartelstrong Behavior and Amateurism in College Sports.pdfVIP

Journal of Economic Perspectives—Volume 21, Number 1—Winter 2007—Pages 209–226 Markets Cartel Behavior and Amateurism in College Sports Lawrence M. Kahn This feature explores the operation of individual markets. Patterns of behavior in markets for specific goods and services offer lessons about the determinants and effects of supply and demand, market structure, strategic behavior, and govern- ment regulation. Suggestions for future columns and comments on past ones should be sent to James R. Hines Jr., c/oJournal of Economic Perspectives , Department of Economics, University of Michigan, 611 Tappan Street, Ann Arbor, MI 48109- 1220. Introduction College football and college men’s basketball generate professional-level rev- enues. Total ticket revenues for football and men’s basketball were $757 million in 1999, which exceeded ticket sales for professional baseball, football, and hockey that year (Sandy and Sloane, 2004, p. 88). The broadcast revenue from the NCAA men’s basketball tournament alone was $564 million in 2005, which exceeded the broadcast revenues for Major League Baseball. Add in the broadcast revenues for regular-season college games, along with college football and its end-of-season bowl games, and the combined college basketball/football revenue exceeded the broad- cast revenues for professional basketball—although it would fall well short of the $2.2 billion in broadcast revenues earned by professional football in 2005 (Fort, 2006; Panaccio, 2005). y Lawrence M. Kahn is Professor of Labor Economics and Collective Bargaining, Cornell University, Ithaca, New York. He is also Research Fellow, Center for Economic Studies/Ifo Institute for Economic Research, Munich, Germany, and Research Fellow, IZA (Institute for the Study of Labor), Bonn, Germany. His e-mail address is lmk12@. 210 Journal of Economic Perspectives Both big-time college athletics and pr