What Is FSU's National Championship Really Worth?
Monday night, Florida State hoisted the crystal football in the middle of the Rose Bowl, and it was just the beginning of the good times for the new national champions. There is no direct financial gain from winning a national title in college football - the winner makes no more than the loser since BCS money is largely based on conference affiliation - but studies and experience tell us there will be much indirect gain for Florida State in the coming months and years.
The 'advertising effect'
First, there's the "advertising effect." Take the 2012 BCS National Championship Game, for example. There were 36 hours of programming logged by ESPN alone on sets around New Orleans, and that's not counting the pre-game show, post-game show, and the game itself. Combine that with coverage from other networks and it's a huge national advertising campaign no school could afford to mount on its own. Malcolm Turner of Wasserman Media Group estimated it to be in the "tens of millions of dollars" in my book, Saturday Millionaires: How Winning Football Builds Winning Colleges.
Why is that advertising so important to a school? A recent study by economists (and brothers) Jaren and Devin Pope concluded in part, "...the results we present suggest that students can be affected by events that do not change the quality or cost of a school but that capture a student's attention."
An older study by the Carnegie Foundation also found this to be true. Students enrolling in Division I schools were asked: "When applying to colleges for admissions, how well informed were you about the intercollegiate football and/or men's basketball teams of the schools to which you applied?" Eighty-eight percent of males and 51% of females answered either "very well informed" or "moderately well informed."
In contrast, when asked, "When applying to colleges for admission, how well informed were you about the undergraduate education programs of the school to which you applied?" Only 39% of males and 42% of females chose either of the affirmative answers.
And that was in the late 1980s! Imagine what the results would be now with college football taking over our televisions all fall. I've asked the Carnegie Foundation if they've updated the study, and they indicated they had no plans to do so. It's not hard to imagine why.
You've probably heard of the "Flutie Effect," whereby universities receive an increase in applications following a major sports victory. A recent study by the Pope brothers found that winning the national championship results in an average 7%-8% increase in applications. In order to achieve the same results by decreasing tuition or increasing financial aid, the Popes found you'd need anywhere from a 2%-24% adjustment.
Quite often those additional applications are from out-of-state students who've learned more about the school through the football program's exposure. Boise State, a program that rarely saw national television time, experienced this firsthand following appearances in the Fiesta Bowl in 2007 and 2010. Out-of-state enrollment increased from just 13.5% in 2006 to 34% in 2011 for freshman. By the fall of 2013, over 57% of applications to Boise State came from out of state. Why is this important? An out-of-state student at Boise State pays over three times as much in tuition ($18,892) as in-state student ($6,292).
Improved academic profile
Increased applications give universities the opportunity to either grow enrollment, by accepting more of the applications, or improve their academic profile by becoming more selective. The University of Florida was able to do the latter following its run of national championships in both football and basketball from 2006-2008, which saw two titles for each sport.
In the fall of 2006, before any of the national titles, there were 1,603 entering freshman whose high school GPA was below a 3.69, which amounted to 15.3% of the class. By 2011 there were only 396 freshman with high school GPAs below 3.69, accounting for just 3.4% of the class. From 2006 to 2010, Florida's acceptance rate decreased from 53% to 39%.
A university with a national title in football might also see its academic profile rise in the form of an increased US News and World Report ranking. A study in the Research in Higher Education Journal in 2010 examined the impact of a national championship in football on a school's US News and World Report ranking from 1992-2006. It found that on average a school's ranking increased by 6.87 from two years before the championship to two years after.
It seems the advertising effect might have an impact on the subjective peer assessment portion of a school's ranking, making a peer assessor think more fondly of a school because he's been inundated with news about the school, even if that news is in the sports world. In addition, the increased applications play a role. A championship was found to decrease acceptance rates by an average of 3.6% as schools received more applications and became more selective. Average SAT scores for the incoming class rose 26.5 points, retention rates improved by nearly 1%, and graduation rates improved by 3.42%.
FSU might also experience a windfall from licensing revenue. Prior to winning a national championship in 2003, LSU had never generated licensing revenue in excess of $1 million. However, just one year after winning the title, the Tigers experienced an increase of over 200% to nearly $3 million. When LSU brought home another title in 2007, the school was bringing in more than $5 million.
Donations and tickets
The big win might also allow Florida State to raise contribution levels for tickets and ticket prices in the coming years. In the early 2000s, Florida's ticket revenue was fairly stagnant around $10 million per year. By 2008, with a national championship in 2006 and Tim Tebow's Heisman in 2007 under their belts, the Gators were bringing in over $15 million annually. By 2010, following another national title in 2008, Florida's ticket revenue was at nearly $18 million.
Ticket-related contributions, the real cash cow in any athletic department, also stand to see a boost following a national title. In 2002, ticket-related contributions at Florida were just over $10 million. By 2008, after a stadium expansion and the two national titles, they passed the $20 million mark, and in 2012 that amount exceeded $35 million.
Schools have also reported seeing increased donations to the university as alumni swell with pride following a national title. Alumni also tend to get more involved with the alumni association, some coming around for the first time in years. Increased contact with alumni, and updated contact information for those who haven't been involved recently, is something a school like Florida State can really capitalize on if they're prepared.
However, most studies suggest the "halo effect" of a national title only lasts for approximately three years without additional success and titles, so the Seminoles will need to get in gear fast to make the most of their national championship.
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