Who Profits from Amateurism? Rent-Sharing in Modern College Sports

63 Pages Posted: 31 Aug 2020 Last revised: 13 Apr 2023

See all articles by Craig Garthwaite

Craig Garthwaite

Northwestern University; National Bureau of Economic Research (NBER)

Jordan Keener

Northwestern University - Kellogg School of Management

noto@northwestern.edu Notowidigdo

Northwestern University

Nicole Ozminkowski

Northwestern University

Multiple version iconThere are 2 versions of this paper

Date Written: August 2020

Abstract

Intercollegiate amateur athletics in the US largely bars student-athletes from sharing in any of the profits generated by their participation, which creates substantial economic rents for universities. These rents are primarily generated by men’s football and men’s basketball programs. We characterize these economic rents using comprehensive revenue and expenses data for college athletic departments between 2006 and 2019, and we estimate rent-sharing elasticities to measure how rents flow to women’s sports and other men’s sports and lead to increased spending on facilities, coaches’ salaries, and other athletic department personnel. Using complete roster data for every student-athlete playing sports at these schools in 2018, we find that the rent-sharing effectively transfers resources away from students who are more likely to be black and more likely to come from poor neighborhoods towards students who are more likely to be white and come from higher-income neighborhoods. To understand the magnitude of the available rents, we calculate a wage structure for college athletes using the collective bargaining agreements in professional sports leagues as a benchmark. We also discuss how our results help understand how universities have responded to recent threats to these rents arising from litigation, legislation, and the global coronavirus pandemic.

Suggested Citation

Garthwaite, Craig and Keener, Jordan and Notowidigdo, noto@northwestern.edu and Ozminkowski, Nicole, Who Profits from Amateurism? Rent-Sharing in Modern College Sports (August 2020). NBER Working Paper No. w27734, Available at SSRN: https://ssrn.com/abstract=3683610

Craig Garthwaite (Contact Author)

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jordan Keener

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Noto@northwestern.edu Notowidigdo

Northwestern University

Nicole Ozminkowski

Northwestern University

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