Category Archives: economics

Book Review: Big-Time Sports in American Universities by Charles T. Clotfelter

In his Big-Time Sports in American University, Charles Clotfelter aims to do several things: first, demonstrate that commercial sport is one of the core functions of American universities. Second, explore how big-time college sport figures in the outcomes of the university (both of the negative and positive variety). Third, make use of recent data and statistical studies to support the previous two points. Lastly, Clotfelter makes some recommendations for reforms.

The book starts with an examination of how sports fit into the university. The American system of commercial sport within universities is unique and part of what Clotfelter wants to do is sort out why and how we end up with the system we have. This helps set up some of his main questions: why, given the many problems that seem to come with commercialized college sport, do universities keep these programs and seek to grow them? Where do (and do) these programs fit into the mission of the university? His conclusion is that commercial sport play important and crucial roles in the modern American university and these shouldn’t be ignored or downplayed. Part of his diagnosis for some of the problems of big-time sports is precisely because the centrality of college sports has not been fully and honestly acknowledged.

Clotfelter then turns to teasing out the consequences for the university of having college sports. He explores, using some clever statistical studies, the impact that college sports have on the academic outcomes, social and community outcomes, and financial outcomes of the university. Some of these are concerning (the negative impact on academic standards and progress) and some of these are positive (the entertainment and happiness produced for the broad community of fans). But in the end, not much of what he finds is all that surprising but seeing it connected to data helps sort out the various ways high-level commercialized sport can impact the university and what it does.
Lastly, he looks at some possible reforms. Some of these are likely to happen soon(ish) though with unknown consequences (such a name, likeness, and image reform). Others are more radical and unlikely to move beyond the pages of academic works.

One of the more interesting conclusions Clotfelter suggests is that while money drives a lot of what goes on in college sport, it doesn’t seem to be the ultimate end or purpose. That is, what he finds is that university leaders and stakeholders that support big-time college sports are ultimately doing it because they want to win. Money is essential to building successful programs, but the end goal is not profit, it is wins: “Despite the palpable commercial value of college athletics, however, it bears repeating that the primary objective of athletic departments is not to make for its own sake. Rather, it is to produce winning teams, for which money is virtually an ironclad necessity” (153).

I appreciate that Clotfelter walks a balanced line. He is quite critical of many aspects of big-time college sports, but also notes the value it brings to the university and society more generally. He brings forward data to help figure out both the harm and the value so that we can better evaluate college sport, but also to more helpfully target criticism and reform. Those looking for either a morbid focus on salacious scandals or enthusiastic cheerleading of the wonders of college sport will need to look elsewhere.

This is an important and helpful work for those interested in understanding the context of big-time college sports. It is not overly technical or mathematical, but it does rely on statistics and other tools of the social scientist. It’s not a casual, beach read, but it’s not a difficult read either. I could also see pulling specific chapters out for assignment in a course. With a little context, many of them can stand alone. In the final analysis, I do not think one walks away with a clear path to realistic reform or even definitive answers to the main questions about college sports, but the book, just as the title indicates, provides a solid foundation for understanding the relationship of big-time college sports to American universities.

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Filed under College, economics, Reviews, Sports Studies

Paying College Athletes

The Wallethub.com blog asked a panel of academics, industry experts, and lawyers: “Should College Athletes Be Paid?

In short, my answer was “college athletes should not be prevented from being paid,” but I also suggest that this is the wrong question to be asking. It is too broad and ignores several other important issues. You can read my full response here.

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Filed under College, economics, NCAA

Teaching Economics of Sports: The Big Leagues

From time to time I invite colleagues to write a guest post for The Sports Ethicist. In this post, I asked my ASU colleauge, Brian Goegan, to write about a model he uses for teaching “Economics of Sports”. Brian is a Clinical Assistant Professor in the 
Department of Economics here at ASU and uses this fantasy-like game to teach the his students about the economics of sports. If you are an ASU student and interested in sports, you should look into taking this course (as well as my Sports Ethics course).

The Big Leagues

Sports provide an endless number of great examples that can be used in the economics classroom, and countless teachers have drawn on them for a wide range of courses and topics. But for a class on the Economics of Sports, I thought I’d try making the example the lesson. In fact, I have built a syllabus which revolves almost entirely around an elaborate simulation of the sporting world which I call The Big Leagues.

In my section of 68 students, we have organized into 30 teams, each owned by a group of two of three students. In their groups, students must manage their franchise, making decisions about where to locate, how big and how nice their stadium should to be, what strategy to take to win games, what prices to set, and what coach to hire. As a league, students must also grapple with a Players Association and vote on the rules which will govern their league. All the while, they need to manage their books, and make sure they end the game with enough profit to buy their grade for this portion of the class.

By acting as the owners, students end up experiencing the lessons they’d learn from a Sports Economics class first hand. Leagues collude to keep player salaries down, and are combated by the players’ union that threatens to strike. When the league is dominated by one or two teams, and matches are no longer competitive, fan interest (and TV revenue) declines. My game also allows owners to dope their players in secret, boosting their performance at the risk of being found out, and each semester I get to see an institution deal with the fan and media wrath after a huge swath of players get caught, voting to impose fines and punishments on each other. They also have to work through complicated formulas and gut instinct to figure out what the profit maximizing prices for their tickets and luxury boxes are, the bread and butter of any good economics class.

The list of complexities goes on and on. Stadiums degrade, players develop across seasons, owners choose actions which influence both of those things, players have ‘suits’ which have combination effects when put on a team with other players, teams can field substitute players, different general managers and different coaches enhance different strategies both for profits and for wins, and contracts with players can include different clauses that give the teams different options down the road. The rulebook for The Big Leagues is 21 pages long, but as one of my students put it recently, “the more you play the smaller the game gets.” In other words, it is a lot easier to understand that it sounds. To make sure they get all the lessons the game has to teach, I devote about 50% of my class time to it. The other 50% is devoted to linking up their choices and outcomes in the game to the real world.

Given its complexity and startup costs, I wouldn’t expect a lot of instructors to adopt the game. And that isn’t even mentioning all of the spreadsheet maintenance and troubleshooting needed to keep the game running from season to season. What I can report though is its effectiveness. Like the proverbial frog in boiling water, little economic lessons are incrementally imparted with every decision the students make in the game, and they barely realize how much they’ve learned until I point it out to them. And given my discipline’s disinterest in finding alternatives to the lecture-based format, they also find it to be a refreshing change of pace.

If you would like to learn more about The Big Leagues, please feel free to contact me at brian.goegan@asu.edu.

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Filed under Arizona State, economics, Fantasy, games, Sports Studies