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Frank examines the assumption, offered by some college officials, that winning teams will attract more applicants and, in turn, better students for two reasons: (1) many students are sports fans, and (2) “a big-time athletic program serves much like a national advertising campaign,” because the names of institutions with successful big-time athletic programs appear frequently in the news media. College officials often cite the 12-percent increase in applications that Boston College experienced after Doug Flutie’s miracle pass to win the 1984 Orange Bowl as proof of this phenomenon.

Frank looks at six studies of this proposition conducted by researchers between 1987 and 2003, which had the following findings:

• A 1987 study found “positive estimates of the effect of athletic success trends on change in SAT scores,” but the effects were “extremely small,” never statistically significantly different from zero.”
• A 1993 paper found no positive link between successful basketball teams and student applications and a “statistically significant” but “small” connection between football success and the quality of applicants a college received. “A school whose football program finished in the top twenty for each of the 10 years in the sample would expect to attract a freshman class with 3 percent higher SAT scores than a school whose program never finished in the top 20,” Frank writes. 
• A 1994 study concluded that improvements in a school’s conference won-lost percentages are tied to a “small” increase in the number of applications received. “For example, a school that posts a 50-percent increase in its percentage of games won (by moving from, say, winning half of its games to winning 75 percent of them) would on average see its number of applicants rise by only 1.3 percent.”
• A 1995 study revealed that the SAT scores of a college’s incoming students rose in a positive and statistically significant – but “very small” -- way depending on how far it advanced in the NCAA basketball tournament. The largest estimate in this study found that advancing an additional round “results in a 1.7 point increase in the entering class’s average SAT score.”
• A 1996 paper found that some Division I colleges experienced significant increases in applications after their teams won national football or basketball championships. But those increased applications did not result in any measurable improvement on the quality of admitted or entering students, suggesting that winning teams have “more impact on the search phase, and less on the choice phase, of student college choice.”
• The most comprehensive of the studies Frank examined, by the NCAA in 2003, found a positive association between football winning percentage and average incoming SAT scores. But it concluded that the effect was small and “not significantly different from zero at conventional confidence levels.”

Taking those studies together, Frank concludes that “vivid episodes” like the Flutie factor notwithstanding, “the existing empirical literature suggests that success in big-time athletics has little, if any, systematic effect on the quality of incoming freshmen an institution is able to attract (as measured by average SAT scores).” He adds: “If expanding its applicant pool is an institution’s goal, it faces many more attractive investment opportunities than those it confronts in the domain of big-time college athletics.”

Athletic Success and Donations

As with student applications, Frank explored a set of studies examining the link between teams’ performance and donations by alumni. College administrators commonly cite the flow of alumni donations as a reason for sustaining or expanding their sports programs (or they cite the fear of losing those donations as a reason not to curtail or shrink their programs). Frank assesses more than a dozen studies, including the following:

• A 1979 study found that the dollar value of alumni donations to various colleges was essentially independent of football success. 
• A 1981 response to that study discovered positive links between alumni giving and some measures of athletic success for some university groups and negative links for others.
• The authors of the 1979 paper examined two different kinds of giving: restricted gifts directly to athletic departments, and general gifts given to institutions at large. “They report that the two types of giving are essentially uncorrelated with each other, and that only direct gifts to the athletic department depend in any way on athletic success, and those only on football success, not basketball success.”
• A 1994 study focused on a single institution, Mississippi State University, found that winning percentage in football is negatively associated with alumni giving, although not statistically significantly so.  Basketball winning percentage has a positive effect, but also not a statistically significant one. (The authors also concluded that being placed on NCAA probation is a significant risk in terms of alumni donations for institutions seriously attempting to field winning programs, since these institutions are often forced by competition to operate close to the margins of allowable conduct.)
• A 1996 study concluded that although winning records do not translate into higher gifts at public and private universities, bowl game appearances do result in significantly higher gifts (an estimated average gift increment of $40 per year per alumnus at private universities, $6.50 per year per alumnus at public universities).   They also found that NCAA basketball tournament appearances result in higher gifts at public universities (an annual increment of $5.60 per alumnus).
• A 2003 NCAA study reports that both football winning percentage and football winning percentage are negatively linked with both total alumni giving and alumni donations to football programs.  But none of these estimates, Frank finds is statistically significant at conventional levels.
• Frank also mentions numerous other studies in brief, including some that find positive links, some that find negative links, and some that find no link at all.

He concludes: “The empirical literature seems to say that if the overall net effect of athletic success on alumni giving is positive, it is likely to be small.”

Implications

Frank’s conclusion that athletic success does not meaningfully increase either the amount of alumni donations nor the quality of a college’s student applicants leads him to policy considerations for both individual institutions and athletic alliances like the NCAA.

Institutions deciding whether, and, if so, how much, to invest in pursuit of big-time athletic success, should not bank on increasing alumni donations or the quality of their applicants. In a winner-take-all market like college sports, even if large gains in alumni donations were possible, “competition among institutions to capture those gains would have already eliminated any unexploited opportunities for gain that might initially have been available.”

When it comes to student applications, Frank writes, “a big-time athletic program might be a cost-effective means of expanding the applicant pool if a highly visible winning program could be launched at moderate expense. But as we have seen, even the cost of fielding a losing program is extremely high and growing rapidly.  If expanding its applicant pool is an institution’s goal, it faces many more attractive investment opportunities than those it confronts in the domain of big-time college athletics.”

Frank acknowledges that colleges’ decisions about how much to invest in their sports programs are driven in large part by their peers – that’s how the athletic arms race has developed. And from his standpoint, the ever-increasing spending on college sports makes less sense for the whole than it does for any individual college.

“If investment in big-time college athletics is unlikely to yield high returns from the perspective of any given institution, it is an even less attractive proposition from the perspective of institutions as a whole,” Frank writes, because it is a winner-take-all market in which success is defined by relative performance. “No matter how many hundreds of millions of dollars institutions spend, only 20 teams will finish in the AP’s top 20 in football each year, and only four teams will reach the final four in the NCAA basketball tournament.”

Therefore, a scenario in which a school’s teams move up in the sports polls in turn transforms another college into more of a loser, conceivably diminishing any indirect benefits it might receive from sports programs.

In Frank’s view, then, there will be winners and losers in college sports no matter how much the teams spend. No institution can cut back unilaterally without damaging its teams’ competitive abilities, but “if all institutions cut back in tandem, competitive balance would be maintained.” He advocates greater “arms control” in college sports, in which governing bodies such as the NCAA (if permitted by the antitrust authorities) would create incentives for each program to limit its expenditures.

Doing so would allow colleges to divert resources to meet other pressing ends “without sacrificing any of the real benefits that college athletic programs generate,” and as his paper concludes, with no sacrifice to the mostly mythical indirect benefits, like alumni donations or stronger applicants, that supporters of college sports sometimes subscribe to athletic success.

As he concludes: “The empirical literature provides not a shred of evidence to suggest that an across-the-board cutback in spending on athletics would reduce either donations by alumni or applications by prospective students.”

Filed Under: knight commission on intercollegiate athletics