College Football's Big-Money, Big-Risk Business Model

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The conclusions in this WSJ article drawn corroborate what Cornell economist Robert Frank has been saying for years – that big-time college sports is a winner-takes-all game, and that it is a losing proposition for the vast majority (apparently > 80%) of colleges and universities that participate in this competition.

I thought Stanford economist Roger Noll’s comment was interesting – that “It’s obvious that intercollegiate sports are less popular in the rest of the country than they are in the Midwest and in the South.”  Having taught for five years at Penn State, Noll’s point was not at all obvious to me – I guess it all depends upon how you define “Midwest”.

I also found the following statement interesting: “The success of this marriage between broadcasters and college football will depend on a set of assumptions—one of them being that the current structure of the cable television business won’t change.”  The article goes on to point out an important demographic trend which suggests otherwise – people (especially younger people) are cutting the cord in droves.  No wonder this is happening, considering how expensive cable is (the article lists an average price of $135 per month).

So in a nutshell, it seems like the business model that “Big Football” is based upon is pretty much doomed; that is, unless Big Football figures out a way to monetize itself in a cord-cutting world…


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