Can We Measure the Effect of National Championships?
As some of you may know, I’m a graduate of University of Florida’s law school. I was fortunate enough to see Florida win three national titles while I was there: 2006 football, 2006 basketball, and 2007 basketball.
Since I study the business of college sports, I’ve often found myself curious about the effect of a national championship (or three, in this case). Obviously it’s good for the athletic department, but it is my belief that a successful athletic program can boost an entire university.
In reviewing budgets, audited financial statements and admissions profiles for the University of Florida over the past several years, I’ve found some interesting trends. While none of these is wholly attributable to the national championships, I certainly think they played a large role.
We’ll start in the athletic department. The most obvious impact is in game revenue and ticket-related contributions. From 1992 to 1996, football game revenue remained fairly stagnant around $7.5 million. Following Florida’s 1996 national title (and a stadium expansion), game revenue climbed to nearly $10 million by 2000. Then from 2000 to 2004, game revenue again leveled out at around $10 million. However, by 2008, following the Gator’s 2006 national title and Tim Tebow’s 2007 Heisman Trophy, game revenue had exceeded the $15 million mark. That number has continued to climb and is expected to reach $20 million by 2012.
Ticket-related contributions saw a jump from 2002 to 2004 when The Swamp expanded. They saw an even greater rise following the 2006 national championship. In 2002, ticket-related contributions were just over $10 million. By 2008, they passed the $20 million mark and in 2011 they have exceeded $30 million.
Much the same has happened with the basketball program. The years 2005 and 2006 saw basketball game revenue hover at $1.5 million. Following the 2006 national title, game revenue jumped to over $2.5 million. Add another championship in the 2007 season and 2008 game revenue jumped to an all-time high of $3 million.
Ticket-related contributions for basketball also saw significant increases. After remaining stagnant at just over $1 million per year since 2001, ticket-related contributions rose to nearly $1.5 million in 2007, $2 million in 2008, and a high of over $2.75 million in 2009 and 2010.
Another area the national titles impacted was revenues derived from licensing. The Gator logo is surely one of the most recognizable in college athletics today. Indeed, the athletic department expects to receive $4.8 million this year from licensing revenue. From 2004-2006 that number was just $2 million, having only seen modest increases from just over $1.5 million in 2001. National championships have certainly helped those licensing revenues more than double since 2006.
And it’s not just the athletic department who profits. Like most athletic departments, the University Athletic Association at University of Florida shares licensing revenue with the University. Assistant Athletic Director and Controller, Susan Parrish, tells me they used to share a percentage of licensing revenue with the University. However, the University requested a change in their agreement, as the percentage model caused a great deal of unpredictability. Today, the athletic department shares a set dollar amount with the University each year, as determined by an agreement of the parties.
The benefits to the University don’t stop there. Most of you have heard of the Flutie Effect, which is basically the idea that successful athletic programs can increase applications to universities by measurable percentages. This occurs because the school is televised nationally and becomes a recognizable brand.
Take University of Florida, for example. In 2006, University of Florida received 21,710 applications and both the football and basketball team won national championships. There were 24,040 applications for the fall 2007 class, an increase of 10.73 percent. Before you tell me that there are other reasons for increases, keep reading.
Following the 2007 basketball title and Tim Tebow’s Heisman Trophy, the University received 26,392 applications, an increase of 9.78% over the previous year.
Following the national championships applications rose by much higher percentages than in other years. And this isn’t an isolated phenomenon at Florida. It’s been documented at numerous other schools following athletic success. I have more thoughts on this, but you’ll have to wait for my upcoming book. (I know, I’m such a tease.)
A national championship can have a positive impact on any program, not just an already strong program like University of Florida. I’ve recently been speaking with an executive at a DII university who won a national championship in a sport other than football or basketball this year. This person tells me she’s already seeing the impact this national championship is having at her school. Watch for their story coming soon on BusinessofCollegeSports.com!