The Football Dividend
One much-discussed claim about big-time college athletics is that successful programs attract a range of things that universities want: alumni donations, applications, prestige, students and so forth.
The scholarship is mixed on whether such payoffs occur, but a new study (abstract available here) finds that there are measurable benefits for athletic success by universities in the Football Bowl Subdivision of the National Collegiate Athletic Association, in particular for athletics-related donations. The new study focuses on the impact of winning each game in the football season, and in particular on the role of winning unexpectedly (for which there appears to be greater payoffs).
The analysis – by Michael L. Anderson, assistant professor of agriculture and resource economics at the University of California at Berkeley – was released Friday by the National Bureau of Economic Research. He tracked wins, and compared various data sources on universities (using U.S. News & World Report reputation rankings for academic prestige and using bookmakers’ odds to measure whether wins were expected.)
Anderson found that a one-win increase during a season is associated with:
- $74,000 in increased giving to athletic programs, but no statistically significant increase in non-athletic donations.
- Modest increases in academic reputation (as measured by surveys by U.S. News).
- 104 additional applications for admission.
- A drop in the acceptance rate of applications of 0.2 percentage points.
- An in-state enrollment increase of 17 students (with no statistically significant increase in out-of-state enrollments).
The impact appears to be greater for universities in the Bowl Championship Series athletic conferences, and when the wins are unexpected.
Anderson writes that his findings may not suggest earth-shattering impacts for a team that has a so-so won-loss record and goes up by one win. But the link between number of wins and impact suggests that “large increases in team performance can have economically significant effects, particularly in the area of alumni donations.”
And he notes that approximately 8 percent of the time, universities experience gains of five wins from one season to the next (13 percent of the time over two years). So such gains are indeed possible.
At the same time, Anderson cautions that his findings can’t be applied in a vacuum. He notes that improved athletic performance frequently is associated with increased financial investment by universities in athletics. So the gains he projects for more football wins need to be balanced against whatever increases in university spending would be needed to produce such victories.