Intercollegiate sports - Business in United States of America

Definition: Sports played at the amateur level, between colleges
Significance: Intercollegiate sports competitions generate considerable revenue in the United States, particularly through television revenue for basketball and football, as well as through the licensing of clothing and other promotional items. However, the businesslike aspects of college sports are at odds with their amateur status, and critics point to the costs of running these popular programs in the face of declining college budgets.
During the nineteenth century, college sports were generally informal in nature, with the students themselves organizing and running the teams. The first major scandal reported in college sports occurred in 1904, when McClure’s Magazine printed an exposé on Yale football captain James Hogan’s arrangement with the university, in which he was given free meals, a percentage of the profits from the sale of game programs, all profits from American Tobacco Company products sold on campus, and a trip to Cuba.

The NCAA

After a series of college football deaths during the early twentieth century, President Theodore Roosevelt created the Intercollegiate Athletic Association to discuss safety in college sports. This commission grew and became the National Collegiate Athletic Association (NCAA) in 1910.
By the 1920’s, college sports had increased in popularity and commercialism. They became even more of a business in the postwar era, when, thanks to the G.I. Bill, colleges had more students (and therefore more fans for their alma mater) than ever before. In response to this trend toward commercialization, the NCAA gradually shifted its focus from safety to maintaining the amateur status of college athletes by keeping college sports part of the education program and college athletes part of the student body. In 1948, the National Collegiate Athletic Association created the short-lived Sanity Code, which set academic standards for athletes and created guidelines for recruitment and compensation given to athletes. It was repealed in 1951.
With the advent of television during the 1950’s, the first contracts for broadcasting games were drawn up with the NCAA. Money from early television broadcasts of games allowed the NCAA to create a headquarters and hire a full-time director. The extra revenue also allowed the National Collegiate Athletic Association to begin enforcing rules and investigating violators more easily. In the first few decades of televised college sports, the NCAA had sole authority over how many times a particular college could be showcased on television broadcasts, how much of the revenue the college would receive, and how it would be received.
During the 1970’s, individual colleges and conferences wanted to begin negotiating their own television deals to make more money for themselves. In NCAA v. Board of Regents of the University of Oklahoma et al. (1984), the U.S. Supreme Court ruled that the National Collegiate Athletic Association had violated antitrust laws by not allowing its members to negotiate their own television contracts. With this ruling, schools and conferences began negotiating their own television deals, although the NCAA still received some of the revenue.
In 1972, Title IX required that universities receiving federal funding equally support men and women athletes. Before Title IX, few colleges had women’s sports programs, but the number of female college athletes has grown steadily since its implementation. A 2007 study by the Women’s Sports Foundation noted that the amount of operating expenses devoted to women’s sports and the number of scholarships awarded to female athletes was not equivalent to the money and scholarships received by men’s sports and male athletes at the college level. Opponents to Title IX argue that women’s collegiate sports do not generate as much television revenue as men’s collegiate sports do, and this inequity is justified as it support the financial health of the college. However, this argument directly conflicts with the National Collegiate Athletic Association’s stated mission of stressing the amateur and educational benefit of sports for college students.

Scandals and Penalties

After a number of scandals, including the revelations during the 1980’s that Southern Methodist University was paying its players through their football boosters, the NCAA first used the Death Penalty, cancelling Southern Methodist University’s entire 1987 football season. It also began setting down academic standards for student athletes, as it had with the earlier Sanity Code. These new standards required student athletes to maintain a 2.0 grade point average.
Despite the use of the Death Penalty and the setting of academic standards, schools continued to violate National Collegiate Athletic Association rules by making payments to athletes and letting them play even if their grade-point averages were too low. It was discovered in 2002 that University of Michigan booster Ed Martin had given college basketball star (and future National Basketball Association player) Chris Webber thousands of dollars in 1994. In 1998, the Texas Tech football team was penalized for allowing a player who had a 0.0 grade-point average to remain on the team.
As college sports programs grew, so did the cost of maintaining them. Despite the money made from television and licensing, most college sports programs do not make enough from these revenues to support their programs and draw additional money from the college, including money from student fees. Smaller conferences in the NCAA, which has 1,250 member colleges, are particularly hit hard because they cannot negotiate as profitable television deals as those drawn by the larger, more high-profile conferences. This problem has continued to grow throughout the 1990’s and into the early twenty-first century.