Essentially the same story was told in men’s basketball, where 45% of all Final Four spots from 1950 to 2005 again went to just ten schools. The same pattern held true in baseball, men’s volleyball, women’s basketball, women’s volleyball, and softball. Competition is unbalanced because the poorest schools are not competing, and if we apply some basic economics, we can see that the NCAA’s prohibition on paying players is part of the problem.
A competitive market uses prices to allocate resources. But if price increases are not allowed, then non-price issues will dictate the allocation of resources. To see which non-price issue matters in college sports, consider the 2013 recruiting class of the men’s basketball team at the University of Kentucky. ESPN.com reports that of the top nine high school recruits, five signed with Kentucky. And Kentucky also added another player ranked in the top 25.
Kentucky’s recruiting class in 2013 suggest that high school stars are looking at whether or not their college team will win in choosing which school to attend. This choice doesn’t simply reflect a preference for winning over losing. In the NBA Draft, academic research shows that players from Final Four teams are chosen about 10 choices higher than players who did not advance to the Final Four. How does a player increase the odds he can get to the Final Four? Go to teams that recruit other top talents. And who recruits top talents? Teams that historically went to the Final Four. It’s a vicious cycle that helps the top schools remain on top year after year.