Thursday, March 15, 2012

March Happiness - financial benefits to universities from an NCAA tournament run

Academic weenies such as myself run around decrying educational institutions who allow their athletic departments to run the show, ignoring university/college presidents and those to whom they supposedly report.

But perhaps there's a method to, madness, if this article is to be believed. Granted, author Kristi Dosh is writing for ESPN, who certainly has a bias in the matter, but it's something to be considered.

Butler’s 2010 run to the national title game resulted in $639.3 million in publicity value, including $100 million from the CBS broadcast of the national title game. Last year’s appearance was valued at more than $512 million. Neither calculation included the publicity value of radio broadcasts or talk shows, but instead focused on television, print and online news coverage.

OK, those are admittedly vapory numbers. But what about this?

The exposure cascades off-court, as experts point to a positive correlation between athletic performance and application rates. They call it the “Flutie effect” after quarterback Doug Flutie, who was credited with a 30 percent increase in applications at Boston College the year after his Heisman Trophy win.

A 2009 study by brothers and economics professors Jaren and Devin Pope showed that just making it into the men’s NCAA tournament produces a 1 percent increase in applications the following year. Each round a team advances increases the percentage: 3 percent for Sweet 16 teams, 4 to 5 percent for Final Four teams and 7 to 8 percent for the winner.

The only way to achieve similar application increases would be to increase financial aid or reduce tuition by 2 to 24 percent, the study said.

Now you have to run a return on investment study on the numbers - how much does it actually COST to develop a basketball team that advances in the NCAA tournament? But since this is a basketball team, rather than a football team, the costs probably aren't all that great.

And, for small public schools who see an influx of out-of-state students, the payouts can be impressive:

The impact of admitting more out-of-state students can be profound. For example, George Mason’s in-state tuition rate is $9,066 per year, while out-of-state tuition is nearly three times as much at $26,544.

Perhaps this is a way for California to solve its budget crisis - have UCLA, Berkeley, and other public schools spend the money to attract the talent to make it to the Final Four.

P.S. Speaking of Dosh - if you want to look at the business aspect of sports, don't read this blog - read her site, The Business of College Sports.
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