A Note to Editors:  A Notre Dame professor, a national expert on the economics of sports, offers a deeper perspective on the Penn State scandal than typically can be found on the sports pages. His column is written amidst concern that the core problem for the nation’s colleges was left unaddressed by the NCAA ruling. The corruption only touched the famed football program because that’s where the accused was employed; it could have happened anywhere in a rich and powerful university. Nor are the financial penalties impressive: The $12-million annual penalty levied against Penn State is less than one percent of its general fund and the football program there has generated a net profit per year of about $60 million. That is not likely to change much even if on-the-field performance suffers, and similar numbers could be applied to any of the nation’s large programs and colleges.

by RICHARD SHEEHAN, Ph.D.

The National Collegiate Athletic Association (NCAA) recently imposed sanctions widely labeled “unprecedented” on Penn State for their apparent longstanding cover up of Jerry Sandusky’s child abuse. What is certainly unprecedented in the collegiate world is the magnitude of the scandal at Penn State. Less clear is whether the NCAA’s actions are warranted, appropriate or a signal of future NCAA actions.

Much of the debate focuses the harshness of the penalties, the appropriateness of the punishment and the implications for the future of Penn State football. While those discussions are of interest, what is missing is a perspective on the role of the NCAA and the very ethos of college football at the big-time programs.

Historically, NCAA punishments have been aimed at programs explicitly breaking NCAA rules, in particular engaging in activities like paying players (e.g. SMU) or allowing boosters to provide inducements to players (e.g. Ohio State and USC) or violating rules that limit practice time (e.g. Michigan). In those cases, the NCAA sanctions were based on the institutions involved gaining a competitive advantage, with the NCAA’s objective to provide a level playing field for all institutions.

The Jerry Sandusky affair and Penn State’s current sanctions appear to be of a different nature. Had the Penn State administration addressed the Sandusky affair when it first came to their attention in 1998, there may have been some negative publicity and minor fallout for the football program. The publicity, however, likely would have rapidly dissipated and may even have been turned into a positive. Had Penn State addressed the issue immediately, their reputation and the football program’s reputation for doing the right thing could have been enhanced. While one can argue that Penn State sweeping the Sandusky matter under the rug gave it a competitive advantage at least in the short term, the evidence for that perspective is at best mixed.

So why did the NCAA impose such harsh sanctions and what does it imply going forward? The Sandusky case was the highest-profile example of grossly inappropriate behavior associated with a football program. The football culture at Penn State, a lack of accountability, and an ethos built on the desires of the head coach combined to create an environment where abuses could occur. Similar cultures prevail in many but not all major college football programs. The potential for serious problems exist, problems that often relate to issues of competitive advantage but may be far afield.

When an institution’s athletic program violates rules that promote competitive balance, the NCAA has a strong justification for intervention. If an institution’s athletic program violates other rules, however, as with Penn State, there is a question of whether the NCAA has a justification for involvement. The simple answer is affirmative. The NCAA’s stated core purpose is “to govern competition in a fair, safe, equitable and sportsmanlike manner,” hence its emphasis on a level playing field.  But its mission statement also states its core values: “The Association . . . shares a belief in and commitment to . . . the highest levels of integrity and sportsmanship.”

Is the NCAA’s action more appropriate than Penn State taking action on its own or some other oversight body taking action? Penn State could have and perhaps should have instituted the steps required by the NCAA before any NCAA action.  Alternately, the Pennsylvania Legislature could have taken remedial action or even associations that accredit Penn State could have taken action. In the latter two cases, such actions likely would be done at a much more deliberate pace.  Nevertheless, it is not clear that the NCAA was the most appropriate cop on the beat.

You can look at the NCAA sanctions from alternate perspectives. The NCAA could have acted because it believed that Penn State derived a competitive advantage from not reporting. In that case, given the small magnitude of the competitive advantage and even given the huge magnitude of the “lack of institutional control,” the punishment appears harsh and inconsistent with other recently imposed penalties. You could instead argue that the NCAA reacted from a political perspective, a case made recently by Sports Illustrated. That is, the Sandusky scandal was so damaging not just to Penn State but to college football and even the NCAA in general, that they felt obliged to do something even if the case for doing so was weak. Alternately, the NCAA may have felt that the Sandusky scandal provided an opportunity for changing the culture of big-time college football. That is, perhaps the college presidents gave approval to unload on Penn State to signal that it was time to change the ethos associated with major college football. Football coaches and the money associated with major football programs were no longer going to effectively create their own fiefdoms within a university.

One might be tempted to dismiss the reason why the NCAA acted and focus on the result. That would be a major mistake. If the NCAA acted simply because they were taking steps to ensure a level playing field or they were acting for political reasons and using lack of institutional control as cover, then the actions taken against Penn State will likely have limited effect 10 years from now.  Penn State’s football program will suffer somewhat; there will be a fund for abuse victims; and 10 years from now we will see other examples of exactly the same type of institutional lack of ethics and lack of control that allowed the Sandusky affair to metastasize. If instead the NCAA is serious about changing the culture and ethos of college sports, football in particular, then maybe we will have an enforcement mechanism that creates a collegiate sports culture where money and power does not trump ethics and fair play.

Richard G. Sheehan, Ph.D., a professor in the Mendoza College of Business at Notre Dame, conducts research on the economics of sports. He wrote this for the Indiana Policy Review Foundation.