Here at the Wages of Wins we are lucky enough to have a resident Sports Economist on staff. When we have crazy questions about things like the cost of beer and its effects on ticket prices we need only e-mail Dr. David Berri to get the lowdown. This week Mosi Platt (@MIA_Heat_Index) of the Miami Heat Index was interested in the NFL and college football on TV and the good doctor was kind enough to chime in. Here are Mosi’s questions and Dave’ answers.
Why do the BCS & NFL handle TV so differently?
The BCS is every school/conference for itself, but the NFL negotiates as one entity. Why is that?
The NFL under Pete Rozelle got a law passed through Congress in the 1960s that allowed the NFL to violate anti-trust laws. The NCAA, though, was found guilty of violating anti-trust laws in 1984 (in a case brought by Oklahoma). Since then, conferences and schools were able to cut their own deals.
Right, but why hasn’t an NFL owner bucked the system to forge their own TV deal? Couldn’t Jerry Jones make more money with his own deal for the Cowboys?
Maybe. But Jones might have a hard time finding anyone to play if he tried to forge his own national deal. The NFL has immunity to anti-trust laws on this issue. So they can stop Jones from doing this.
So, as an economist, which organization is better at maximizing its TV revenue in you’re opinion – the BCS or NFL?
The difficulty with the BCS is that they have oversupplied the market, and that has reduced the price of each game. But I am not sure of the actual prices. So I am not sure how the revenue numbers compare (although I am sure someone knows).
Until next time
Hope you enjoyed a brief refresher on football on television. The next time we have a question for Dave we’ll make sure to post it.