Power 5 Autonomy and Student Apps

Major Credit Rating Agency says Power 5 Autonomy Could Depress Applications for Others

Power 5 Autonomy and Student AppsCould autonomy for the Power 5 mean fewer applications to universities in other conferences? Fitch Ratings, a global agency which issues credit ratings to companies (similar to the way Equifax issues you a credit score), indicated in its latest release today that it expects schools with major sports programs who fall outside of the Power 5 to experience a decrease in applications.

Fresno State in the Mountain West is called out specifically as a likely victim. From the Fitch Ratings release:

There is much anecdotal evidence to suggest that success in sports has a positive impact on the number of applications received by colleges and universities. Most schools that enjoy unpredictable success in basketball or football often see a one-year bump up in their applications. In our view, the proposed changes are unlikely to have any effect on the number of applications received by the “Big Five,” as the recognition their sports teams already provide would not change significantly. If these rules were adopted, we would also expect few changes to schools with smaller or less successful sports programs, as they make smaller contributions to their schools’ brands.

However, there could be some modestly negative effect on the number of applications to schools that have successful sports teams but are not included in the “Big Five.” As an example noted in a recent New York Times story, Fresno State is one institution that has invested in and expanded its athletic successes. But it is in the Mountain West Conference and, if the proposal is approved, could lose the publicity it gains from performing well against the best teams.

Indeed, numerous studies have found a correlation between success in football or men’s basketball and new student applications. Most studies focus on the impact of winning a national title or a BCS bowl game, but one study I detailed in my book Saturday Millionaires found mere membership in Division I increased out-of-state applications at a university by 2-4 percent. It wouldn’t be surprising then that membership in the Power 5 might also have an impact.

Here’s an excerpt from Saturday Millionaires on some of the studies that have found a positive correlation between football or men’s basketball success and new student applications:

On average, the most recent study by the Popes shows winning the national championship in football results in a 7-8 percent increase in applications. Finishing the season in the top 20 in the AP poll results in a 2.5 percent increase in applications the following year and a 3 percent increase if the team is ranked in the top ten.

As was stated previously in the chapter, the Popes study found that in order to achieve the same results, a 2-24 percent adjustment would have to be made to tuition/financial aid.

At an even more basic level, increasing the team’s winning percentage from one season to the next has been shown to increase application rates. A 1998 study found teams whose winning percentage increased by .250 over the previous season saw an average 1.3 percent increase in applications. A more recent study in 2005 found that number to be larger when in-conference winning percentage increased. A .250 increase in conference winning percentage was associated with a 6.1 percent gain in applications the following year. A decrease in winning percentage was found to produce a 0.4 percent decrease in applications.

A new study, released in mid-2012, found a large increase in wins, such as three wins to eight, was followed by a 5 percent increase in applications.

Some of the largest impacts found by many researchers were in relation to out-of-state students. The Popes 2012 study concludes, “While a sports victory for a given school may not change the awareness of in-state students regarding its existence, the sports victory may present a significant shock in attention/awareness for out-of-state students.”

One study showed mere membership in NCAA’s Division I increased the number of out-of-state students at a university by 2-4 percentage points.

[Footnotes have been removed for this blog post]

Check out Saturday Millionaires for an entire chapter on the intersection of athletics and academics, which details other areas of a university that have been shown to benefit from athletic success.

Saturday Millionaires CTA (1)

EA Sports NCAA Football 2014 (1)

Are College Football Video Games Coming Back?

I EA Sports NCAA Football 2014spoke with a licensing director at a Power 5 school yesterday about the possibility of college football video games coming back after the O’Bannon ruling. You can see his answer in my latest piece for Outkick the Coverage. Or, if you prefer a podcast, you can check out my latest podcast for a full discussion.

Thus far, EA Sports has not replied to my request for comment.

O'Bannon Does Not Mean

Three Things the O’Bannon Ruling Does Not Mean

O'Bannon Does Not MeanIf you’re not inclined to read my full report on the ruling in the O’Bannon case that came down on Friday, you can probably get away with simply knowing what it does not mean.

  • It does not mean all student athletes are getting cost-of-attendance stipends. In fact, it doesn’t even mean all football and men’s basketball student athletes are getting cost-of-attendance stipends. What the ruling said was that the NCAA cannot set a rule limiting stipends to anything less than cost-of-attendance for football and men’s basketball student athletes. If I were a betting woman, I’d say the NCAA sets the limit for stipends at cost of attendance and allows all student athletes to receive that stipend. Some schools will be able to afford to implement the stipend, some will not. There is no requirement in the ruling that schools must starting funding cost of attendance stipends, merely that the NCAA cannot legislate against it.
  • You’ve probably heard about the $5,000 tied to the trust fund idea. It does not mean every football and men’s basketball student athlete is automatically accruing $5,000 per year in a trust fund to access after graduation or exhaustion of eligibility. What the judge said was that the NCAA cannot prevent schools from offering at least $5,000 per year to football and men’s basketball student athletes (to be placed in a trust for disbursement upon graduation or exhaustion of eligibility). The NCAA will likely set the cap at the minimum $5,000/student athlete/year. Each individual school can then decide if they want to participate, but they are not required to do so. One school might decide on the $5,000 number, another might only be able to do $2,500, and yet another might decide they cannot afford to do anything. Whatever the schools choose, they must implement it equally across a recruiting class. You can’t offer higher-profile recruits more than other recruits. You can, however, change the amount with each new recruiting class.
  • Sadly, it does not mean the NCAA Football video game is coming back. The judge did not rule that football and men’s basketball players could pursue individual commercial sponsorship or endorsement deals. In other words, they can’t sign on their own with EA Sports or Nike or Gatorade or anyone else. The ruling simply forces the NCAA to allow schools to share some licensing revenue with student athletes under the two very limited circumstances explained above. Is still means schools will have to decide to license with EA Sports or other video game producers in order for the games to come back. Student athletes cannot join together and go license their name, image and likeness to create video games, at least not under this ruling.

Saturday Millionaires CTA (1)

O'Bannon vs. Title IX

Are O’Bannon Ruling and Title IX at Odds?

O'Bannon vs. Title IXOne of the most complicated parts of the O’Bannon ruling against the NCAA stems from the fact that Judge Wilken did not have to take Title IX into account when she ordered stipends and trust funds for football and men’s basketball student athletes.

I am not a Title IX scholar or expert, but I did interview about a half dozen of them when I was writing Saturday Millionaires for the chapter on pay-for-play. One big misconception I’m seeing from fans on Twitter this morning is that Title IX only covers equal opportunities for female student athletes. That is not the entire story. Most of you are familiar with what we call the “three-prong test” for Title IX, which does focus on opportunities. However, the three-prong test is just one of three parts of a full Title IX analysis.

The issues I see with the O’Bannon ruling and Title IX come in the second part about athletically-related financial aid and in the third part (the laundry list) where publicity and recruitment are factors.

Would a court consider the new stipend and trust fund for football and men’s basketball players “athletically-related financial aid”? Does it matter that football and men’s basketball players are publicized in more high-profile ways than female student athletes? What about the fact that the new trust fund will be associated with recruitment? Those are questions that will have to be answered.

I want to give you some excerpts from Saturday Millionaires where I explained the three parts of Title IX analysis to highlight where the O’Bannon ruling might be at odds with Title IX. Continue reading

NCAA Loses O'Bannon

What the O’Bannon Ruling Means for the NCAA and College Sports

NCAA Loses O'BannonA federal judge ruled against the NCAA on Friday on the O’Bannon case, which deal with student athletes’ inability to be compensated for use of their names, images and likenesses.

Although the judge dealt the NCAA a blow, and certainly gave student athletes a landmark victory, her ruling was very narrowly tailored. I have a detailed breakdown of the case and the ruling on Outkick the Coverage on FoxSports.com.

Autonomy for Power 5

Unintended Consequences of New NCAA Governance

As expected, the NCAA Division I Board of Directors approved a new governance model today that will give the Power 5 autonomy (only altered from the last publicized model by allowing proposals to be introduced by just one conference in the Power 5 instead of three). What does it really mean for college football? Although I was in favor of this model due to the increased benefits it will allow some schools to offer student athletes, I’m not sure everything that flows from it will be positive.

Want a little dose of reality? Click here to read my piece on Outkick the Coverage.

The latest news and original analysis on the business of college sports…