It pays to bend the rules: The consequences of NCAA athletic sanctions

Scandals in big-time college sports receive considerable attention in the media, scrutiny that can potentially damage the reputation of host institutions. The National Collegiate Athletic Association (NCAA) monitors any rule-breaking behaviors of members and sanctions the most egregious offenders. I use panel data for colleges and universities fielding Division I football or basketball teams to seek effects of those sanctions that could produce general deterrence. The literature on organizational and white-collar crime is used to identify control variables for models of deterrent effects. Most penalties for major violations do not affect the outcomes investigated. Recently instituted sanctions for poor academic performance are slightly more effective, resulting in a small change in the football winning percentage especially when scholarships are taken away. Overall, the results suggest that colleges and universities suffer little economic or reputational damage when their athletic programs are penalized for violating Association rules.