They understand the 'modern world' perfectly well. They also understand things like 'exclusive contracts' and 'source of income'.
What the 'modern world' needs to learn is that just because you have the ability to do something doesn't mean it is right to do that thing, or that doing that thing has no long-term negative effects. Yes, some idiot can tweet the entire play-by-play. But what do you think will happen to UW's basketball program when it no longer is a source of revenue (or loses even more money than it does now, if that is the case)?
Maybe if their basketball and other sports programs are no longer a source of revenue, the university will go back to focusing on education.
The decision doesn't have to be logical; it was unanimous.