Revenue Shares and Monopsonistic Behavior in Intercollegiate Athletics
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Intercollegiate athletics in the United States operates as a monopsonistic cartel under the umbrella of the National Collegiate Athletics Association. This paper examines the degree to which it is able to exploit this position by restricting the level of compensation that goes directly to the athletes in the form of athletic scholarships. The major professional sports leagues in the United States (baseball, basketball, football, and hockey) all have negotiated aggregate salaries that represent over fifty percent of league-wide revenues. In comparison, analyzing data from The Office of Postsecondary Education (OPE) of the Department of Education on 2,068 institutions of higher education reveals that intercollegiate athletes receive payments-in-kind, via athletic scholarships, that constitute less than 22 percent of total athletic department revenues. Clearly the monopsonistic practices of the NCAA are effective in restricting the compensation of athletes.
cartel; monopsony; intercollegiate athletics
Required Publisher Statement: Published by the Cornell Higher Education Research Institute, ILR School, Cornell University.