TV Networks for College Sports: Implications for Institutional Subsidies

Abstract

University athletics because of its reporting structure, regulation by the NCAA, and relationship to the academic enterprise of institutions, provides a unique look into postsecondary institutional behavior. Using a difference-in-difference design, this study tests the introduction of new television networks dedicated to college sports on institutional subsidy levels for athletics. Overall, our findings show that institutions are responsive to the introduction of new college-sports-dedicated television networks. When considering institutions in the Power Five athletic conferences, we find an average decline in subsidy levels of approximately $1.2 million. When considering different types of subsidies, we find significant declines in direct subsidies and student fees, but no significant change for indirect subsidies.