If You\u27re Not Cheating, You\u27re Not Trying: An Economic Analysis of the Financial Futility of NCAA Sanctions

The front page of sports news for the past few years has been filled with a cycle of recruiting and academic scandals from universities all over the country. Despite the repercussions that schools face from the NCAA for cheating, they continue to break the rules to obtain the top high school recruits in men’s basketball and football. Why has this become the common culture across college sports? In this study, we used data from a variety of sources, including the NCAA Legislative Database and the US Department of Education, to estimate the relationship between a university’s athletics revenue and the major NCAA violations for which the school received penalties. We used the fixed effects model format in a multiple linear regression to estimate a general model, as well as models which controlled for sport, conference, and school size as measured by endowment. We found that the number of years of probation that a school received was the only statistically significant violations-related variable that negatively affected a school’s revenue. In contrast, recruiting restrictions provided a significant boost to athletics revenue. Overall, we found that the effect of getting caught by the NCAA and receiving a penalty is minimal, and when it does have an effect, it is generally a positive effect on revenue. This aligns with earlier research that NCAA sanctions largely fail to regulate universities and even provide an incentive to cheat when recruiting and retaining top student-athletes in men’s basketball and football