An Empirical Analysis of the NCAA’s Competitive Behavior

Abstract

While the NCAA contends that its rules and regulations are necessary to ensure competitive balance on the playing fields, there is a rich theoretical literature examining why the NCAA should be considered a cartel. This study examines the issue of competitive behavior from an empirical perspective. Prior studies that have empirically examined collegiate competitive balance have focused on winning percentages and have limited their analysis to football and, to a lesser extent, basketball. This study extends the playing field by considering competitive balance as measured by both financial and playing field metrics and by examining the most commonly offered NCAA sports. It also emphasizes differences across groups of conferences. The results indicate that the Power 5 conferences differ dramatically from all other conferences, while the differences between other conference groupings appear relatively minor. Profits are limited to a subset of the Power 5 members, there is virtually no movement in or out of the Power 5, and higher costs may lead to increase wins and increased wins lead to increased revenue only for Power 5 schools and not for other schools.