Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2010

Capstone Advisor

Professor Chris Rohlfs

Honors Reader

Professor William Horrace

Capstone Major

Economics

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Social Sciences

Subject Categories

Economics | Finance | Growth and Development | Other Economics

Abstract

Collegiate sports attract a lot of attention and money. Many universities are sponsored by high powered sportswear and equipment companies including Nike and Adidas. Furthermore, CBS, Fox, and Disney participate in multimillion dollar media deals to exclusively cover a variety of sporting events featuring mainly collegiate basketball and football.

This is best demonstrated by the television coverage that respective sports receive. For example, CBS is in the midst of an 11 year, $6 billion contract that will pay the National Collegiate Athletic Association approximately $545 million per year to carry the NCAA basketball tournament. The NCAA basketball tournament is held annually and decides the collegiate basketball national champion through a 65 team, single elimination tournament. The tournament is also known as March Madness and has a widespread age following. Many companies have office pools where participants fill out a bracket with their winning picks for each and every game. However, the participation in pools is not exclusive to workers. Many students in high school and college participate in pools as well. On ESPN.com alone, there are over 5 million people who filled out brackets. In addition, other websites offer similar opportunities to fill out brackets including Sports Illustrated’s website, CBS’s website, and Yahoo.com to mention a few. Many participants also print out brackets. The participation in pools increases sustained interest in the tournament because people are invested in their brackets and wish to follow how their picks fair.

In addition to college basketball, college football also possesses a very large following. To reach that audience, Disney acquired the rights to air the Bowl Championship Series in 2011 at the cost of $125 million a year. The Bowl Championship Series is currently made up of the Orange Bowl, Rose Bowl, Fiesta Bowl, Sugar Bowl and the BCS National Championship Game. Previously, there was no specific BCS Championship game. Rather, the championship rotated between one of the four aforementioned bowls. The 2006 season was the first to institute the additional championship game.

Despite the widespread attention that collegiate sports receive and the apparent money derived from athletic programs, athletic programs are a losing proposition for most schools. In addition, many universities use lax admission standards on athletes and shower them with full scholarships and other benefits that a normal qualified applicant would never receive. Nevertheless, athletic programs have a long standing tradition as being part of a successful university.

The immaterial monetary significance of athletic programs questions the merits of maintaining athletic programs. Some schools have even cut losing and expensive programs to refocus their efforts and capital on academic pursuits. On the other hand, many universities accept losses to maintain their athletic programs. While a financially independent and profitable athletic program may be one of the goals of maintaining a program, another prominent goal is to have a successful program.

A successful team acts as marketing for the university, especially if it is in a major sport (basketball and football) where there is a lot of national exposure. Intuitively, a large amount of exposure would increase the interest in the university, which would encourage more students to apply. This phenomenon is known as the “Flutie effect” which refers to Boston College’s Doug Flutie whose miraculous Hail Mary pass in the closing seconds of a 1984 game against the University of Miami secured the victory for Boston College. The following two years saw application increases of 16% and 12% respectively for Boston College. Long term impacts of the “Flutie effect” are not conclusively known or agreed upon.

One of the first studies to compare collegiate athletic success and undergraduate admissions was Toma and Cross (1998). The study focused on football and men’s basketball national champions between 1979 and 1992 and the effects that the championship had on applications. The study compared the university that won the championship to four or five peer institutions—schools that the universities themselves thought as their main competitors. The study found that a championship in either men’s basketball or football translated into sometimes dramatic increase in the number of application received in absolute terms and when compared to peer institutions.

Other studies examine similar topics. Irvin Tucker (2004) found that a successful big-time football team contributes to academics through attracting a higher quality incoming freshman class, improved graduation rates, and alumni giving. Conversely, a later paper by Tucker and Ted Amato (2006) finds that successful basketball team does not affect average SAT scores for applicants.

Another study by Litan, Orszag, and Orszag (2003), which was commissioned by the National Collegiate Athletic Association (NCAA) found that the “Flutie effect” has no foundational empirical support. In addition, it found that expanded athletic programs do not contribute to substantial financial losses.

As seen in Litan, Orszag, and Orszag’s study as well as other academic articles have found no empirical evidence of the “Flutie effect.” However, there has been increased interest in collegiate sports, especially basketball and football. This is evident by the expanded television coverage of major conferences, extra season games, new bowl games for football, conference playoff games, and the BCS series. These new additions to the collegiate athletic landscape would not have been taken into account in older studies that focused on decades old data. Revisiting these studies with more recent data will alleviate that weakness and return results that more reflect the current environment of collegiate sports and admissions.

This study will examine the effects of winning a national championship in football and men’s basketball on admission factors including applications, enrollment, SAT scores, and a variety of other factors. Data from 2001 through 2007 will be used to study the effects, a time range where most of the changes in the collegiate sports landscape had been put into place. This will address an important weakness in past studies.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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