NCAA Sanctions and Economic Impact

Posted over at The Sports Economist:

TSE readers know that we here at TSE roll our eyes at economic impact claims regarding sports and economic development. So when I saw that the governor of Pennsylvania was filing suit against the NCAA regarding the sanctions handed down on Penn State, I raised an eyebrow Spock-wise.

The projected loss to the state’s economy combined with the hit to Penn State’s prestige are the basis for Gov. Tom Corbett’s lawsuit to have the sanctions, including a $60 million fine and a four-year ban from lucrative postseason bowl games, thrown out.

Legal and strategic questions notwithstanding, we’re talking about an entire state here. I imagine that the vast majority of people who go to Penn State football games live in the state of Pennsylvania, meaning that the vast majority of dollars spent on Penn State football would have been spent elsewhere in the state if Penn State didn’t have a football program. If the Penn State football program didn’t exist, how much smaller would the Pennsylvania economy be? Not much if any.
The impact of the sanctions is even smaller because the sanctions won’t cause the football program to go completely belly up. There are lots of dents in the NCAA’s armor that we can point to, but sanctions harming a state economy is not one of them.