The Regulation Option—College

From Fair Pay, Fair Play pages 125-131

Our society’s preferred option to assure businesses serve us with the right product at the right price is free market competition. When that option isn’t available, we have to look at the other options–to regulate or to own and operate.

In the 1990s, the federal government regulated cable TV rates. Congress passed the law, because, it said, the great majority of cable TV customers nationwide didn’t have a choice of an alternative cable TV provider. This gave those cable operators “undue market power” and they used that power to raise rates at more than three times the rate of inflation. Pursuant to the law, regulators enacted a cable rate freeze and two rate reductions totaling 17%. The rate reductions were upheld by the US Court of Appeals. The court agreed that the comparative yardstick method—using rates from those few communities where there was actual competition—was appropriate.

Because we have no choice of another My Team, pro-team sports leagues and teams have “undue market power” and they use that power to raise ticket prices to unaffordable levels, force football season-ticket holders to buy preseason tickets, require the payment of seat license fees, and on and on. The same is true for major college sports because the college team is My College Team.

The book suggests a comparative yardstick to use with pro-team sports—the price of movie tickets—and notes that because we have so many choices when we want to watch a movie, the inflation-adjusted price of a movie ticket actually declined from 1977 to 2017. Using this yardstick, the book then describes how the regulation of pro-team sports could eliminate all of these excessive costs, and reduce cable TV bills and TV timeouts. The regulation of major college sports could achieve the same results.

It’s time for you to join the team and get into the game. What do you think about this way of eliminating the abuses of college sports? Below the comment box you can see what the team is saying on this issue.