Here is some more bye-week homework. This journal article is home grown.
Update: I've been reminded of the need of permissions before reprinting articles such as this. As such I'll limit the content to the conclusions and references.
NCAA Scholarship Limits and Competitive Balance in College Football
Journal of Sports Economics - February 2003
DANIEL SUTTER - University of Oklahoma
STEPHEN WINKLER - The Oklahoma Publishing Company
Conventional wisdom holds that parity is greater in college football today than ever before and that scholarship limits have fostered today’s competitive balance. A variety of measures indicate that the stylized fact is false; indeed, several measures indicate that college football has been less balanced since the imposition of scholarship limits. Regression analysis of time series measures indicates that the relationship between scholarship limits and parity is complicated. Scholarship limits seem to have reduced within-year parity while increasing parity as measured with the AP Top 20. Only 4 out of 16 scholarship-limit coefficients were significantly consistent with greater parity, so again the conventional wisdom is without support. The effect of scholarship limits suggests they serve to limit resources spent on football. An examination of the NCAA vote reducing the scholarship limit to 85 finds that recent success on the field made schools more likely to vote for the lower limit, but success over the entire postwar period did not affect voting. These results support the interpretations that the limits were to protect incumbent football powers or perhaps to protect rents generated by amateur status; the interpretation that weaker schools voted to level the playing field is rejected.
Our results raise the question, Why do scholarship limits not produce greater parity? Three explanations seem possible: (a) Scholarship limits have not been enforced or have been evaded, (b) the current limit of 85 scholarships is too high for limits to weaken strong programs, or (c) limits negatively impact both strong and weak programs, leaving competitive balance unchanged. The NCAA can easily measure the number of scholarships awarded, and athletes with scholarships for other sports cannot play football, so lack of enforcement of the current limit seems inadequate. Our research does not allow us to discriminate between the other two explanations. Future research on this question might focus on the relative impact of nonscholarship, walk-on players. If traditional powers attract more and better walk ons than also-rans, this would suggest that marginally lower scholarship limits will not increase parity and may even entrench incumbents.
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Daniel Sutter earned his Ph.D. from George Mason University and is currently associate professor of economics at the University of Oklahoma. His research interests include sports economics, constitutional economics, the urban land assembly problem, the economics of the news media, and the economic impact of weather and natural hazards.
Stephen Winkler holds an MBA in finance from the University of Oklahoma. He is currently a financial analyst with the Oklahoma Publishing Company.