How it started
As conferences and even how we view NCAA sports change, Humphreys’ research into those critical numbers gives insight into why universities have large athletic departments and the NCAA’s role in the economics of it all, particularly where and with who those schools play ball.
West Virginia University is a case in point. Around 2003, TV contracts for football became one of, if not the biggest money-maker for conferences and universities. At the time, WVU remained in the Big East when the ACC poached the likes of Miami, Virginia Tech and Boston College in the mid-2000s, and then Pitt and Syracuse in 2011. It wasn’t the miles traveled between conference teams or the numbers on a scoreboard or even the ones in the W/L columns that made those schools bounce to another conference, Humphreys said.
“Every one of these episodes of conference realignment has happened around when these broadcast rights contracts are set to expire,” said Humphreys, economics professor and associate dean for academic affairs and research in the John Chambers College of Business and Economics.
Prior to the mid-1980s, the NCAA allowed only one or two games to be aired per week across all of college football. A lawsuit from the universities of Oklahoma and Georgia, citing anti-trust laws, claimed schools could go on their own to networks, have all games televised and make more money. Following a Supreme Court decision in 1984, all the negotiating power went to the conferences.
Humphreys’ research, “Opportunistic Behavior in a Cartel Setting: Effects of the 1984 Supreme Court Decision on College Football Television Broadcasts,” published in the “Journal of Sports Economics [SM1],” found that the NCAA central organization “may have behaved opportunistically by overregulating television broadcasts relative to what would maximize cartel – economic organizations decide to collude on some economic decision — net benefits.”
“You can draw a straight line from that decision to conferences negotiating with ESPN or whoever for broadcast rights and conference realignment,” Humphreys said. “Then, conferences want their games on basic cable for the most eyeballs as possible to maximize the value of those broadcast rights and broadcast right fees. And they do keep going up.”
The strongest driving force in realignment are football broadcast rights revenue through CBS, ESPN and FOX, which send millions of dollars to universities and essentially fund athletic departments. The other big money-maker is the men’s basketball NCAA tournament in March.
“Conferences are the organizations that negotiate those contracts,” Humphreys said. “The NCAA used to make those rules. Pre-1984 Board of Regents the broadcast contracts were not important. The NCAA restricted football broadcasts to one or two games on Saturday afternoons. That was it. The NCAA also restricted the number of times each team could appear on television each season to two or three times. It is only in the post-Board of Regents era that the contracts between conferences and networks became important.”
How it’s going
Narrowing the scope for WVU, following Oklahoma’s and Texas’ departure to the SEC from the Big 12, the Big 12 recently agreed to a new media rights deal, worth nearly $2.3 billion with ESPN and FOX beginning in June 2025 through 2030-31.
The current deal, which is media-only, pays out $220 million to the conference – $22 million per school with 10 schools – while the new deal will be worth $380 million – $31.7 million per school with 12 teams following the exit of Texas and Oklahoma and additions of Houston, Central Florida, Cincinnati and Brigham Young University.
Technology continues to evolve, as well, making streaming services and cord-cutting an important player in the continued shuffle from teams to different conferences.
“Cord-cutting means cancelling your cable or satellite TV contract and going all streaming,” Humphreys said. “The streaming services (ESPN+, Peacock, etc.) decide which games are on cable and which games get streamed. Also, there are no limits to the number of games that can be streamed at one time. ESPN has a limited number of channels where it can broadcast games.”
To the pros
Humphreys found his niche in sports economics after studying business inventory during recessions at the University of Maryland, Baltimore County, where he served as assistant professor. But the timing wasn’t friendly with the 1990s being one of the longest periods of prosperity in U.S. history.
“It was pretty clear I needed to find another line of research because I wasn’t going to publish enough to get tenured if I kept with macro,” he said. “At UMBC living in Baltimore, it was when Baltimore stole the Browns from Cleveland and became the Ravens. Part of the publicity campaign was to build a new stadium and that was financed entirely by taxpayer money. The Ravens didn’t pay a cent for that.
“The state of Maryland came out with an economic impact study, stating the Ravens were going to generate 4,000 new jobs, was going to raise income in the city by $200-300 million a year and increase tax revenues.”
Humphreys has appeared in many national publications discussing the ramifications of publicly funded stadiums, including the potential for the new Oakland Athletics and Tennessee Titans stadiums.
Much of Humphreys’ research over the years disputes what pro sports franchises and government officials might sell to the public, particularly when it comes to tourism. A 2019 study revealed that pro sports do not translate to increased tourism dollars in terms of hotel demand after analyzing hotel data near Los Angeles’ Staples Center, home to the NBA’s Lakers and Clippers and the NHL’s Kings.
And while extravaganzas like the Super Bowl may generate tens of thousands of spectators and millions of television viewers, they have little, if any, tangible impact on the economy, Humphreys’ research has shown.
“The key takeaway is there’s no evidence supporting the idea that pro sports attract a substantial amount of tourists on a sustained basis,” Humphreys said. “People always claim that pro sports generate important economic benefits to tourism. But those are just claims. There’s no evidence.”
Read more about Humphreys’ research