Some evidence...

In his forthcoming article E. Woodrow Eckard (University of Colorado, Denver) finds evidence that the Bowl Championship Series (BCS) in College Football is indeed a cartel. In my blog I discussed the matter as well.

Here is the link to the article (Journal of Sports Economics):
http://jse.sagepub.com/content/early/2011/07/15/1527002511414719.abstract

Setting new standards

This week Arizona Cardinals Widereceiver Larry Fitzgerald signed a contract extension of 8 years worth $ 120 million. It was also reported that the contract consists of about $ 50 milllion in guarantees. Fitzgerald is now tied for the 5th in the current year-average and the top 4 on this list are all Quarterbacks. His contract volume even ranks among the top five concerning the overall volume in NFL history. He has distanced himself from all other current NFL WRs in terms of year-average, as the second on the list (not counting Steve Smith, Carolina Panthers) is Brandon Marshall at $ 10 million.

Maybe the focus has shifted from Quarterbacks to other playmakers. However, the last team that has won the Super Bowl without a potential superstar Quarterback were the Tampa Bay Buccaneers in 2002.   Statistics show that the NFL is still a Quarterback-driven league. Maybe it is desperate spending by a single franchise in Arizona. Maybe it is a result from the new collective bargaining agreement and the ended lockout.

Whatever the reasons are it will certainly have the effect that Widereceivers, Runninbacks and other crucial positions will demand higher contracts relative to Quarterbacks. We already saw a long holdout from Vincent Jackson (San Diego Chargers) and Chris Johnson (Tennessee Titans) is currently holding out while demanding a huge contract. My guess is that at the end of the day it will become harder to sign highly productive skill-players in the future and the Larry Fitzgerald contract might have started this.

NCAA - again

Sorry for coming back to NCAA football yet again, but the latest headlines dealing with the University of Miami scandal really deserves to be mentioned here. The dust has not yet settled on the Miami case, but there seems to be a lot going on behind the shining surface of the NCAA. And it is all about the fact that collegiate players do not get what they deserve. They have value, they generate revenues for their colleges and they are not even allowed to sell their trophies from championships or other memorabilia (see Ohio State case).

So the NCAA does not only restrict all internal compensation to regulated scholarships, it also deprives players of their right to turn their value into money. In short the NCAA also prohibits all external compensation. While this is against all principles of economics, it is also highly questionable in terms of constitutional rights of the players. The NCAA uses its monopoly power to negotiate sponsorship contracts, TV contracts and media relations. Colleges make a lot of money selling TV rights for their games. Top NCAA coaches can easily match with NFL coaches in terms of salaries. At whose cost? Yes, the players'.

In a recent panel discussion presented on ESPN, dealing with possible changes of the current collegiate athletics system (Blueprint of Change), Alabama coach Nick Saban stated that the NCAA "was no business" and nobody "was making money" as "no revenues were generated". I never heard something more cynical and false. Saban himself makes $4.1 million this season and his 8-year contract is worth $32 million. The contract of another discussant in the penal, Bob Stoops, who does not hesitate to emphasize the "value of education" is in the same area (see ESPN). Non-monetary compensation and bonuses not mentioned.

Universities reinvest their revenues generated from athletic programs. They do not make money, but they seek to improve their reputation and attract more students. Sounds like a business to me. Coaches are making big time money while arguing in favor of a strict zero compensation policy for players. Maybe the current NCAA system is collapsing in the wake of all the scandals. Players should be given their fair share and a change is needed. 

Doping? A problem of the past?

In this year's edition of the Tour de France only one cyclist (Alexander Kolobnew, RUS) was tested positive for doping, or rather a substance often used to camouflage performance enhancing drugs. So can we conclude from this that professional cycling is a clean sport?

My answer would be NO. The average speed of the Tour peaked at 41.654 km/h in 2005, during the reign of Lance Armstrong , who won the world's most famous bicycle race 7 times. In the wake of the Floyd Landis case in 2007 the average speed dipped to 38.98 km/h, the lowest value since 1991. One could easily attribute this to a more cautious approach towards the usage of performance enhancing drugs due to an increased intensity of testing. In recent years, however, the average speed has returned to the level of 2002/2003 and my intuition is that it will climb again. The graph to the left presents all average speed values since 2000.

While this might not be ultimately convincing that doping is still big in cycling, it provides some initial evidence. Even if one does not correct for difficulty of stages, weather or other influences, one can ask the following question: Why should todays athletes be able to ride as fast as their colleges were in a period which was known for widespread usage of doping (f.e. Team Telekom/T-Mobile, US Postal)?

So why do athletes dope? The answer of an economist is simple: They incur the risk of being caught and penalized in order to gain an illegal advantage over competitors and win a prize. Three factors are critical: The risk of being caught, the penalty and, of course, what is at stake. In the presence of ever increasing prizes at the Tour de France the two other factors also have to adjust in order to reduce the incentives to cheat, or at least keep it constant. If we notice the fact that "doping-hunters" are probably always one step behind a cheater, the most obvious measure would be to increase the penalties. My impression, however, is that this is still not being done. As long as it is possible to participate in the Tour while having tested positive (Alberto Contador) for performance enhancing drugs, few cyclist who are willing to win at any prize will shy away from doping. Even well known dopers of the past are welcomed at the Tours despite a dubious "zero-tolerance" stance of the Tour organizers.

There is probably still to much to gain and too little to lose at the world's most prestigious bicycle race.