The dubious nature of the NCAA’s regulation of big-time intercollegiate football and basketball has been a frequent topic on this blog (see here, here, here, here and here), and one of the best examples of the hyprocrisy of that regulation is the NCAA Men’s Basketball Tournament. As Peter Gordon notes, the tournament is hugely entertaining, but also hugely exploitive, and he passes along the following passage from Lawrence M. Kahn’s article Winter 2007 Journal of Economic Perspectives ($) entitled Cartel Behavior and Amateurism in College Sports to make his point:

Big-time college sports programs appear to extract rents from revenue-producing athletes by limiting their pay and requiring them to remain amateurs. These rents are spent on facilities, non-revenue sports, and possibly head coaches’ salaries. On average, the two big revenue sports of men’s basketball and football run a surplus; however, college sports as a whole — including the non-revenue sports — report operating losses. Some evidence suggests, although not unambiguously, that college sports have positive indirect effects on public and private contributions. Moreover, sports success appears to generate interest by students that may lead to a modestly stronger student body. In this consumer-oriented era for higher education, universities need to maintain their appeal to future applicants, many of whom are future alumni or future voters for state legislatures, and having successful sports programs may be one way to do this. The popularity of college sports events and of schools with big-time athletic programs suggests that the idea of amateurism may have some market value. Arms race considerations suggest that society may gain from some spending limits on college athletics. From an efficiency point of view, these societal gains would have to be weighed against the losses caused by movement down the supply curve of star athletes.

Professor Gordon boils it down:

Paradox resolved. Exploitation, inefficiency, politicized anti-trust status and “consumer-oriented … higher education.”