A for-profit university, Grand Canyon University, is transitioning to Division I athletics. The presidents of the Pac-12 don't like it. The president of Arizona State University said, "A university using intercollegiate athletics to drive up its stock value — that’s not what we’re about."
So, what are you all about? Tyler Cowen once said in class, "It's a little unclear what a university is trying to maximize. Do any of you have any idea what George Mason University is trying to maximize? I've been here for 15 years and I still don't know." But whatever a university is trying to accomplish, it certainly seems to involve athletics. Nearly every major university in the nation runs its own multi-million- (sometimes billion-) dollar corporation using indentured servants. Because most athletic departments are separate entities, their success does not necessarily advance the academic missions of their universities. That might be ancillary, but it's definitely not primary.
Universities are using intercollegiate athletics to drive up the wealth/power/prestige of the university president and athletic director. That's what ASU, every other school in the Pac-12, and nearly every other school in Division I is about. And it's unclear to me that this is so morally superior to driving up stock value. Stock is more-diversely held than the wealth/power/prestige combination ASU is maximizing, so benefits more people when its value increases. The Pac-12 continues to schedule contests against NCAA-rules-violating schools like USC (a Pac-12 member), but helping grow grandma's retirement portfolio is beyond the pale!
I think what's really happening here is top-tier schools fighting second-tier schools' attempts to blur the remaining distinctions between them. When Americans think about "going to college," they imagine the ASU experience much more than they imagine the GCU experience. Schools like Grand Canyon, University of Phoenix, Strayer University, and their for-profit ilk are seen as a tangible step down from the nation's non-profit colleges and universities. Billions of dollars are made at the top of that pyramid. The more second-tier schools provide top-tier experiences, the less money comes to top-tier schools. The Pac-12's behavior is nothing more than ordinary rent-seeking behavior.
Hey, I've finally answered Tyler Cowen's question.