Football Players Are University Moneymakers — Will Coronavirus Kill That Revenue Stream?

 In Land, COVID-19, Information

Colleges and uni­ver­si­ties are spend­ing more than ever to land the nation’s top foot­ball recruits, with some schools having boost­ed their recruit­ing bud­gets by more than 300% in the last five years.

These bud­gets can sur­pass US$2 million for schools like the University of Tennessee. Is it worth it?

I study economics. Research I recent­ly did shows just how big the payoff for spend­ing money to recruit the best play­ers can be.

Half a mil­lion dol­lars

The schools that secure five-star recruits – the 30 or so play­ers judged to be in the top one-hundreth of the top 1% of high school foot­ball play­ers – can increase total revenue by over $500,000 for a university’s ath­let­ic depart­ment. Most foot­ball teams never secure a five-star recruit. Others, such as the University of Alabama and Louisiana State University, recruit three or four every year.

My research team came to this $500,000 figure by link­ing 10 years’ worth of foot­ball recruit­ing infor­ma­tion from Rivals.com and Scout.com, two of the top recruit­ing ser­vices for prospec­tive col­lege foot­ball play­ers, with federal data on how much col­leges take in and spend on ath­let­ics, win-loss records for indi­vid­ual schools and post-season bowl appear­ances.

The data shows rev­enue and expen­di­tures for each sport sep­a­rate­ly, which made it pos­si­ble to deter­mine what a foot­ball recruit added to foot­ball rev­enue at each uni­ver­si­ty.

Schools like the University of Oklahoma, the University of Michigan and Notre Dame, which on aver­age bring in over a dozen four- or five-star recruits every year, bring in mil­lions of dol­lars more in rev­enue when they land more of the top recruits in a given year.

For instance, my esti­mates sug­gests that Clemson University’s five-star recruits, of which there were five, and 12 four-star recruits – also in top one-quar­ter of 1% of all play­ers – in the 2020 recruiting class will increase the school’s foot­ball rev­enue by well over $3 mil­lion, well above its $1.8 million recruiting budget.

The reason is simple: Top recruits help teams win.

Since a top recruit cor­re­lates strong­ly with increas­es in the number of vic­to­ries, they help deter­mine the type of post-season play. Five-star recruits are not the decid­ing factor in whetehr a school gets to a bowl game, the mark of a win­ning season – the big-time pro­grams will have win­ning records every year with­out fail.

But they do push them to the upper ech­e­lon of post-season play – the College Football Playoffs or its fore­run­ner, the Bowl Championship Series. Reaching the cham­pi­onship level in col­lege foot­ball contributes to lucrative broadcast contracts, corporate partnerships and even more suc­cess­ful recruit­ing.

Very few schools are con­sis­tent­ly suc­cess­ful in the race to recruit top foot­ball talent and win at the high­est levels. Just as nine schools have been respon­si­ble for 20% of all players drafted into the NFL over the past two decades, only six schools have made it to the College Football Playoff cham­pi­onship game.

Financing other sports

There is more than hoist­ing foot­ball tro­phies at stake.

College foot­ball is a key driver of ath­let­ic depart­ment rev­enue as well, help­ing to pay for other sports pro­grams. Athletic depart­ments that field more than 30 var­si­ty teams do so under­stand­ing that fewer than five var­si­ty teams gen­er­ate enough rev­enue to cover the entire ath­let­ics department’s expens­es.

In fact, some crit­ics argue that big-time col­lege sports, which fea­ture ros­ters made up primarily of black student-athletes, pay for the sports programs that include overwhelmingly white student-athletes, such as lacrosse and swim­ming, which receive far less media atten­tion but are the bulk of ath­letes in major col­le­giate sports pro­grams. Sixty-one percent of all stu­dent ath­letes are white.

Football rev­enue also helps finance ath­let­ic recruit­ing efforts and ameni­ties, such as state-of-the-art facilities. All of that takes money, which takes recruits, which takes money. Every recruit­ing video, campus visit and hosted meal is a line item on an ath­let­ic department’s budget.

COVID-19 reper­cus­sions

The pos­si­bil­i­ty of there being no col­lege foot­ball season in the fall of 2020 is making athletics departments fear big budget cuts.

Already, some schools are drop­ping sports that were sub­si­dized by col­lege foot­ball rev­enues, like men’s soccer and wrestling. Smaller schools that depend on a few $1 mil­lion pay­days in September from the major pro­grams, may be left with gaping holes in their ath­let­ic bud­gets, threat­en­ing all sports.

There is little doubt that changes are coming to the cur­rent model of ath­let­ic depart­ment oper­a­tions through a vari­ety of con­verg­ing forces. COVID-19 is unleash­ing widespread job losses, business closures and declining consumer spending that will limit what fans and adver­tis­ers can spend on foot­ball.

Another factor could be a change by the National Collegiate Athletic Association – which gov­erns col­lege ath­let­ics – that could allow stu­dent-ath­letes to get paid from their name, image and likeness.

While schools rich with talent may con­tin­ue to get richer, those schools fur­ther down the recruit­ing peck­ing order will be left to wonder how they can sur­vive at all.

This arti­cle by Trevon Logan first appeared in The Conversation on April 29, 2020.

Image: California Memorial Stadium in Berkeley, California. 17 January 2008. Wikimedia/Roman Fuchs.

National Interest source|articles

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