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Friday, February 07, 2014
 
Supply and Demand on National Signing Day

Wednesday was "National Signing Day" -- a day that has become an unofficial holiday of sorts for college football and its consumers.  The media coverage of the signings of Four and Five-Star recruits on this day just becomes more intensified each year.  Indeed, National Signing Day has all the resemblances of Draft Day in professional sports: The "war rooms," the depth charts, the last minute decisions, the last minute faxes, the high stress, the high fives, and all the uncertainty of which teams are going to get the top players available in the class.


But what I see on this particular day each year is a huge demand for a very small supply of people who possess unique and extraordinary skills and whose performances are necessary for the product of major college football to exist.  Unlike the rest of us in this world, these elite athletes are not fungible (replaceable) and, thus, their market value is increasing each year along with the exponentially increasing revenues generated by the industry.


The current conversation surrounding the threat to "amateurism" is fixated on the legality of NCAA rules and whether the NCAA and its members can prevail in court and, as of two weeks ago, in front of labor relations boards.  But perhaps we are grossly underestimating the leverage possessed by these elite athletes as well as the practicality of their ability to collectively demand and obtain, outside of the boundaries of the legal system, more rights and benefits from their universities in exchange for their willingness to show up and perform for us on Saturdays.  In other words, the biggest threat to "amateurism" is likely going to be basic economic principles of supply and demand.

In conjunction with a symposium last fall at the University of Mississippi School of Law, I wrote a paper discussing these issues and it will be published soon in the Mississippi Sports Law Review.  The paper is titled, "The Battle Outside of the Courtroom: Principles of "Amateurism" vs. Principles of Supply and Demand," and can now be downloaded from the SSRN link
here.





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