Wednesday, September 27, 2017

a few thoughts on the latest NCAA cartel scandal

The NCAA is a classic example of a government-supported cartel. Market competition and greed prevent most voluntary cartels from being successful. But with help and enforcement from the government, much more is possible. Govt is famous for regulating monopoly power, but in reality, govt increases monopoly power 10K times more often. #WhoWillBuildTheRoads

The problem with voluntary cartels: the incentives to cheat (by insiders) and to enter (by outsiders). In the case of the NCAA, when you're exploiting athletes (compensating them at far less than market value), cheating is inevitable-- whether universities, shoe companies, boosters, hookers, etc. It'll be fascinating to watch how deep the investigation will go and what they will find. #SportsTakesAnotherKickToTheShorts

I suspect we'll see little gloating from rivals of the teams impacted so far. Most people fear karma. Beyond that, most people expect other shoes to drop-- and it could well be your favorite team. 
This is akin to steroids. In a time when many are doing it, how do you stay clean and be effective? Can you stay clean and win? 
One would expect this to be a much bigger problem in basketball than in football. Fewer, impact players generating big excess revenues for their schools. 
The NCAA and its shenanigans are allowed / propped up by the government. The next time someone tries to tell you that the government and the non-profit sector are less greedy, more benevolent, etc.-- e.g., in health care-- than the for-profit sector, just spell out the letters N C A A. The question/topic is not that easy.

You understand why men's basketball coaches are so well-paid, right? They are the point persons in the competitive labor market for coaches: who's best at scooping the excess revenues from the players?
Will this result in the sacking of the NCAA? Will the government take away its sanction, given its inability or unwillingness to enforce laws, integrity, etc.? Or will the scandal be so widespread that universities will leave the NCAA to avoid its sanctions?


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