Rules Gone Wild: The Case of the NCAA (by Dwayne Barney and Paul Cleveland)

Throughout time empires, nations, communities,football player institutions, and associations have come and gone. Some last for long periods of time while others flourish for a brief period before withering away. There are perhaps many reasons for the success and failure of human organizations, but one stands out to us as being crucially relevant:  Laws, rules, and regulations tend to multiply over time resulting in top heavy organizations that eventually become detested by those living in subjection to them.  Over the next several weeks we will explore this process by looking at the NCAA as an illustration of this tendency. 

The NCAA provides an interesting case study to analyze the growth of a bureaucracy.  Membership in the Association is voluntary, and the Association’s members are responsible for proposing and voting on any new rules.  A new bylaw becomes binding only after it has been approved by the membership through its established legislative process.  However, even though member institutions are allowed to participate in the development of new bylaws, a large and ever-growing number of malcontents are finding the NCAA and its rules and regulations to be overly burdensome. 

The NCAA routinely investigates universities for violations of its rules governing the member schools’ athletic programs. Within the past several years it has investigated several high-profile football programs to see whether an “extra benefit” was received by either a student-athlete or prospective student-athlete. An NCAA investigation can result in violations and subsequent penalties placed upon the guilty institution if it is determined that extra benefits were provided to athletes. In the past few years the NCAA has investigated Auburn University, The Ohio State University, Boise State University, and the University of Miami to name a few.

On page 1 of its burgeoning manual (2013-2014), the NCAA states that its purpose for existence is the maintenance of a “clear line of demarcation between intercollegiate athletics and professional sports.” On page 4, it asserts that “student-athletes should be protected from exploitation by professional and commercial enterprises.” In its attempt to “protect” student-athletes from receiving any extra benefits, the NCAA increasingly attempts to micro-manage the lives of all athletes falling under its rule. Like the federal tax code, as time has gone by rules have expanded to the point of absurdity. For example, a particularly laughable NCAA bylaw (#16.5.2 (h)) asserts that “[a]n institution may provide fruit, nuts and bagels to a student-athlete at any time.”  Following the passing of this bylaw, the question of whether or not cream cheese can accompany the allowed bagel was hotly contested in athletics’ compliance circles.

Today’s blog is the first of a series that will examine NCAA regulation from an economics perspective. The next one will examine the NCAA’s amateurism principle through the lens of public choice theory and rent-seeking. It will be argued that despite the lofty language found in the NCAA Manual, a primary goal of its legislation is to establish a cartel arrangement to insure that economic rents accrue to the university, coaches, and athletics administrators, rather than to the student-athletes who are doing the heavy lifting on the field. We will then look at the ever-growing list of rules and regulations promulgated by the NCAA in its attempt to insure economic profits (i.e., extra benefits) are not accruing to student-athletes. To accomplish this objective the NCAA endeavors to monitor and control an ever greater part of a student-athlete’s life; a task that is ultimately impossible.  Due to the inability of any institution or athlete to fully comply with all the NCAA’s rules and regulations, every institution has violations—some discovered but many more undiscovered—on what is most assuredly a daily basis. Thus, when everyone is guilty, the decision to investigate and penalize any particular institution can appear to be arbitrary and capricious.  The parallels between this and our bigger “prohibited everything” economy are obvious.   

The growth of the NCAA into a bulky, overbearing establishment that is insufferable to many of its own members is not a new or an isolated phenomenon.  There is and always has been a disturbing deep-seated human tendency for groups to evolve from simple associations into large and oppressive establishments, a trend which will be explored in this series of blogs.  We may be our own worst enemies. 

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