Technology, Legal Decisions, and Superstar Teams Undermine NCAA Authority

In the first two chapters, we discussed ways in which members of major professional sports leagues and the NCAA govern themselves. Professional leagues place greater weight on creating close competitions that feature the best athletes in their respective sports compared to Division I basketball, which prefers to adopt policies that, above all, satisfy fans of resource-rich teams. In this chapter, we build on this discussion by exploring the effect of technological innovations on leagues’ governance decisions. We’ll use as a guide the prescient implications of Sherwin Rosen’s incredible article “The Economics of Superstars.1” In the article, Rosen shows that the spoils of supply innovations aren’t necessarily shared by all market participants, a fact that can cause superstars within a market to experience huge relative gains over their competitors. In the decentralized league of Division I basketball, the lion’s share of the benefits from broadcasting innovations have flowed to a select few members within the league, an effect that has virtually destroyed the NCAA’s ability to enforce cartel rules.