March 13, 2017

NCAA money spurs annual academic debate

WEST LAFAYETTE, Ind. — The upcoming NCAA men’s basketball tournament creates office pools, excitement and a lot of cash for participating schools.

Benjamin Van Kammen, a lecturer in Purdue University’s Krannert School of Management, said the cash influx is largely dissipated because it instigates an intercollegiate arms race that fuels almost as much discussion as the final scores.

Forbes magazine estimates around $30 million in revenue for the major conferences after each basketball season and as much as $8 million for individual universities advancing to the Final Four, and Van Kammen noted university applications increase with athletic success as well.

“Being ranked in the Top 20 in football, making the Sweet 16 in basketball, however you want to measure success, does seem to have a real effect on the academic side of things,” Van Kammen said. “You see this real increase in applications from incoming high school students, and that enables a university to be a little bit more selective. It’s tempting to conclude that this is good academically for the university because you can get good academic students coming in.

“But my contention, and one other economists make, is we would have that exact same freshmen apply to college, and same level of competitiveness athletically, without spending so much in an arms race for athletic talent.”

Van Kammen said the tournament will be played regardless, with one winner and plenty of losers. “The winner always gains at the expense of the loser, so why do we have to spend so much figuring out who the winner will be?  That’s the thing about the arms race:  your chances of winning depend on outspending your opponents, so a unilateral arms reduction is not rational. It’s only rational if we all coordinate to reduce spending. I don’t see how the popularity of college sports would be harmed if we all lavished less money on coaches, facilities, etc.”

Van Kammen admitted such disarmament is unlikely. “Universities do these things at a much larger cost than is necessary. It’s an academic argument but it is a problem. It’s something that we could be doing better.” 

Writer: Howard Hewitt, 765-494-9451, hhewitt@purdue.edu 

Source: Benjamin Van Kammen, 7650496-1590, bvankamm@purdue.edu

Note to Journalists: Van Kammen is available for interviews.

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