Wednesday, March 23, 2011

Inefficient Markets

Via Matt Yglesias, a poignant article on the NFL's ownership rules and the fleecing of taxpayers in the cities the NFL plays in. Warning, you may find it harder to spend money on NFL merchandise or watch the games after reading the article.

PBS' Frontline will be airing a documentary titled Money and March Madness next Tuesday. A lot of juicy tidbits on this page, including:

Despite these income streams, the average Division I athletic program in 2009 ended up more than $10 million in the hole. 2005 was the last year any Division I program without a football team turned a profit.

What flows into a high profile athletic department quickly flows out through facilities' maintenance, travel, training, tutors, and coaches' salaries.

In 2009, athletic departments in NCAA-member schools spent an average $98 million. By 2020, average spending by college athletics departments is forecast to top $250 million a year, according to the Knight Commission on Intercollegiate Athletics, using NCAA data submitted by member schools over the past five years.


A Congressional Budget Office (CBO) report released in 2009 warned that the NCAA was endangering its tax-exempt status as a voluntary educational organization because of the exploding commercialization of NCAA Division I college sports. The CBO estimated that 60 to 80 percent of the money made through NCAA Division I football teams came from just commercial deals and crossed an educational line.

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