Graduation Year

2023

Graduation Month

December

Document Type

Thesis

Degree Name

Bachelor of Arts

School or Department

Economics

Major

Economics

Faculty Mentor Department

Economics

Faculty Mentor

Katrina Mullan

Subject Categories

Business Analytics | Econometrics | Industrial Organization | Labor Relations | Sports Management

Abstract

This paper examines the impact of Name, Image, and Likeness (NIL) laws on revenue for public Division I universities' athletic departments, challenging the long-standing debate within the National Collegiate Athletics Association (NCAA). Utilizing panel data from the Knight Commission on College Athletics, which encompasses over 350 public Division I universities from 2002 to 2021, this study employs a difference-in-differences model. The model investigates state-level changes in university athletic department revenue from sponsorships (sponsrev), with special focus on the post-NIL law era. The analysis is bolstered by controls for various factors including ESPN’s FPI data, coach and equipment expenditures, and COVID-19 mask mandates.

The study's findings indicate that the effect of NIL laws on sponsorship revenue is statistically insignificant, challenging the NCAA's argument against the legalization of NIL laws. This suggests that fears of NIL laws reducing athletic department revenues may be unfounded. The study also explores potential mechanisms, such as the attraction of superior athletes to states with NIL laws, which could have broader implications for the dynamics of college athletics.

However, the research acknowledges several limitations, including the short time frame of data collection and identification problems due to variations between colleges within states. Future research should consider incorporating controls for championships, star players, and conference realignment to address year-to-year variations in popularity, performance, and reputation.

In conclusion, the evidence presented in this paper contributes to a growing body of literature on the economic implications of NIL laws in college sports, providing new insights into the relationship between athlete compensation and athletic department revenues.

Honors College Research Project

Yes

GLI Capstone Project

no

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© Copyright 2023 Dylan C. Cherullo