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Thursday, June 10, 2010

College Football Is All About Money...And It Should Be!

The person in this video complains that college football is all about money, with regards to the recent realignment activity. He thinks the college presidents are greedy and that it is hurting someone...although he doesn't really mention specifically who it hurts. This is typical someone who doesn't understand economics.

Here, we see a classic fallacy: that doing things "for the money" is necessarily a bad thing. Most of the good advancements and innovations that occur in society are done for the money. We often think of "money" as being this very shallow thing, and in a lot of ways it can be. However, money also represents value. It represents the value we recieve for the value we give. So, although money itself can be quite shallow, what it represents can be quite deep. One must always remeber, even that depth is not worth certain prices. But one could just as easily say, the football conferences are "doing it for the value" of it. An institution does not get more money by stealing it or simply printing it (except the U.S. federal government).

Institutions make money by exchanging something for it. In the case of college football, they exchange the product of football and all the products associated with it. People give money for it, because they want the product. In order to get more money, the schools have to offer more in exchange. The realignment activity is about each school putting themselves in a better position to offer more value, and to get more value. Although the direct motive, of say Texas moving to the Pac 10 Conference, is to make more money, the long term result is that the fans get a better product, and the school gets more exposure and opportunities. Its a win-win situation for everybody and that is why there is more money in it. Money merely represents the value added.

Doing things to make money is good when one gets money by offering a product that people need or want, and voluntarily exchanging it for money. The unintended results are beneficial for everyone. This is how virtually every advancement in society is made, including medicine, services and goods for the poor, and engineering. And this is how college sports are advancing currently.

This isn't necessarily "greed" until the institution is willing to hurt others in the process. When someone is willing to step over other people to make more money, then you have a problem. However, that problem is to be taken for granted in society. It always has existed, and always will. The question is to what rules will govern this behavior.

There is some greedy activity going on with the college football realignment, and this subject isn't getting much attention. The big conferences want to solidify their status, and not be challenged anymore by the small guys like the Boise States and Utahs of the world. They lost a lot of money to these small programs in recent years and have been embarrassed by them a few times. My critique is that this conference realignment isn't fair to the smaller conferences like the Mountain West and WAC, which have worked hard to grow.

When you make money within a fair playing field, there is no complaint. But when you make money in an unfair, monopolistic system, while elimminating competition, this is a problem. This is how self-interest is different from selfishness (i.e. greed). This is not only problem in college football, but in many aspects of society.

You'll notice the parts of college football that involve competition (i.e. the competition between the BCS conferences) tends to be extraordinary and tends to change for the better constantly. All the while, this element retains its traditions and history. However, the parts that destroy competition (i.e. the lack of competition between the BCS conferences and the non-BCS conferences) tends to be unfair and of low quality.

The big college football conferences have always competed on unfair terms. The fact that they have been getting beat occasionally anyway has been extremely fun to watch. But they are now realigning to eliminate that problem. Again, we see an example of what I stated: the competition between the big schools improves and the competition involving the bigs/smalls gets worse.

The fact that these colleges are pursuing greater profits is wonderful thing, because they will do so by providing a better product. However, the rules do need some tweaking, as to keep the schools in smaller conferences from being unfairly competed against.

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