About a year and a half ago, the NCAA – by order of the Supreme Court – began allowing players to take advantage of their so-called name, image and likeness.
The decision inspired a near-endless barrage of “the sky is falling” proclamations, as a few ultra-wealthy schools would now sign all the top recruits and there would be no competitive balance in college football.
Even the assurances of real economists couldn’t stop paranoid coaches, short-sighted administrators, and the fearmongering media from declaring that college football is all but dead.
Well, Wednesday was the first National Signing Day where the whole recruiting cycle went on with legal NIL and the demise of the sport, or the extravagant hoarding of recruits…didn’t materialize.
And it won’t be anytime soon, no matter what you hear.
From 2017 to 2021, an average of 45.4 of the top 100 recruits signed with the top five teams in the recruiting rankings. If you add 2022, a sort of hybrid NIL, non-NIL recruiting year, the six-year average jumps to 47.0. If you go back a decade, it’s 43.7.
Having nearly half of the country’s elite talent sign with so few programs isn’t ideal. Alabama, Georgia, Ohio State, Clemson and LSU were in the top five multiple times, if not every year. Not surprisingly, these are the only programs to have won national titles during the playoff era.
For the Class of 2023, with NIL promises expected to sink, the top five teams in the recruiting rankings are Alabama, Georgia, Miami, Texas and Ohio State.
They have cumulatively signed… 41 of the top 100 players as of Wednesday. One or two more top 100 recruits can still go with these schools. We’ll see.
Whatever the final number – likely the low 40s – looks remarkably similar and statistically in line with, if not below, what recruiting looked like before NIL was supposed to make the rich rich by buying every player.
That’s right, not only top-rated schools didn’t sign Following of top talent, they actually signed less.
“Simon Rottenberg’s principle of invariance remains undefeated,” said Andy Schwarz, a sports economist who has predicted from the start that almost everyone was wrong.
Rottenberg was an economics professor who in 1956 proposed the principle of invariance while studying baseball’s opposition to free will. In 1960, it served as the basis for a Nobel Prize-winning paper by Ronald Coase.
The concept is rooted in the advanced economy and its definition is not conducive to a simple sports chronicle. Simply put, however, it shows that regulations designed to create a level playing field by limiting how talent moves around don’t actually have much, if any, real impact.
“The link between wage setting and competitive equilibrium is generally not supported by the field of economics,” Schwarz and two others wrote in an article on the concept.
“Rottenberg predicted that regardless of how you pay athletes, what drives talent on any given team is the total revenue pool that talent will generate,” Schwarz said. “So it was easy to say that NIL will only move money to the workforce, but not change the overall distribution of talent.”
Few college sportsmen have listened to Schwarz and probably fewer have heard of Rottenberg.
Instead, the sport has been plagued by hysteria over players supposedly being offered huge NIL deals, even though the numbers far outweigh the reality. Money can certainly be a factor, but it is rarely the only factor. Training, geography, playing time, NFL development, personal relationships, lore, style of play, academics, etc. are also important.
Furthermore, the best schools were already using money to attract the best talent by hiring the best coaches or building the most opulent facilities.
Yet, even assuming that some players may choose a school solely on the basis of a direct NIL promise, the invariable principle shows that “the distribution of talent in these markets will not change substantially.”
On the contrary, Schwarz and other economists note that by eliminating cost controls on talent – that is, limiting compensation to scholarships only – the possibility of a slight to moderate dispersion of talent exists. For example, a less wealthy program might prioritize and overvalue an individual’s talent and thus choose to spend more than a wealthier school would. This is a more effective way to entice the player than trying to build an even bigger weight room.
“If you undervalue something, it’s easy to hoard it because it’s cheaper,” Schwarz said.
And so, “as expected, we’re not seeing the top teams getting much less talent, and certainly not seeing them getting more,” he continued. “These are small improvements in competitive balance, not doomsday predictions that Alabama will somehow get all five stars.”
Which isn’t to say Alabama doesn’t get a lot of five stars. Once again, the Crimson Tide won the scouts title and landed 14 top-100 recruits. But it’s been happening ever since Nick Saban arrived in Tuscaloosa. He’s signed 10 or more top 100 rookies in eight of the past 10 years.
“It was impossible for the competitive balance to deteriorate,” Schwarz noted. “The model of amateurism in no way induces competitive equilibrium and it certainly does not encourage it.”
In short, not much has changed this year. Some schools rose up – Texas landed six top-100 rookies, but was it because of NIL money or top-ranked quarterback Arch Manning serving as a pied piper of some sort ?
Others were thought to be using NIL for recruiting, but even then Miami could lose its top rookie to Colorado and new coach Deion Sanders, and although Oregon had a few setbacks on signing day , he also lost his top rookie to UCLA.
It’s only been a year, but all the cries of concern have turned out to be unsuccessful or even slightly opposed to what really happened.
As expected.
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