The Power of Sports & the Financial Impact a Good Coach Can Have

For most that have worked at an academic institution and are part of an athletics department, the argument about the practicality of athletics is highly contested among some academia. The best analogy I have heard is that sport is the front porch for an academic institution. Pick up any newspaper and even above the name you can usually find scores and highlights. The most popular section of the newspaper is the sports section. A couple articles in the last few days demonstrate the transcendent significance of sports.

Saban Bringing Forbes to a SEC Homes Everywhere

First I read where Forbes magazine is printing 197,500 issues of their Nick Saban feature on September 1. Normally, they only produce 90,000 copies and have not had to do a second run in a decade! Certainly there will be a lot of people exposed to Forbes magazine that never would have imagined picking up the magazine if it were not for the drawing power of the Alabama head ball coach.
Forbes magazine has ordered a second printing of its Sept. 1 issue featuring University of Alabama head football coach Nick Saban on the cover, the first time in more than a decade that the magazine has ordered a second printing of an issue in anticipation of higher sales.

The issue hit newsstands last Friday and is selling out in many locations. The cover story profiles Saban as 'Sports' Most Powerful Coach.'

The articles also says:

'Demand for the issue has been so high that stores have sold out of Forbes magazines within minutes,' the magazine said in a news release. 'The company has received reports that customers have waited hours for stores to receive additional allotments, and copies of the issue are being auctioned on eBay.'

Each year when a school turns a program around or makes a run, like George Mason, similar articles referring to the Flutie Effect pop up in newspapers and magazines.

As I noted in my book notes of "Cinderella: Inside the Rise of Mid-Major College Basketball", Darren Rovell of ESPN.com said George Mason received between $5 million & $10 million in marketing value by their final four run.

From the CollegiateTimes.com, George Mason's press secretary had the following to say about the post final four run:

Don Walsch, George Mason University's press secretary, said that his school had an experience very similar to that shown in Pope's research.

"We experienced a number of visible results from our Final Four experience," Walsch said. "They were in admissions, alumni activities, people participating in events and a wide-range of other things."

Walsch added that he did not think there were any drawbacks to attention surrounding Mason's 2006 NCAA tournament run, noting that it made much of the country curious about where the college is located and what they are about.

"It increased our visibility nationwide enormously," Walsch said. "It puts a spotlight on us in a big way for people who didn't know who we were or what we were about. There was a genuine sense of pride in those affiliated with the university, either currently or in the past."

The article discussed a study done on admission applications and success in football and basketball:

"gathered information from approximately 330 colleges and universities nationwide between 1983 and 2002. This included every American institution that has an NCAA Division I football or basketball team with the ability to play for a national championship."

The study concluded that:

The team finishing first in either sport will likely experience the 8 percent applicant pool increase, whereas the schools finishing 16th or 20th will see the 2 percent rise.


In another college football centered article, NewsOk.com declares Bob Stoops the financial savior for Oklahoma University.
"We can tie everything back to Bob Stoops,” Castiglione said. "The success of our football program has been like the high tide in the harbor that has raised all of the boats.”

Take a look at the financial facts of the Oklahoma athletic department before and after Stoops started winning.


In 1998, the Sooner football team finished with a fifth consecutive non-winning season.

And the athletic department budget was in the dumps. Football was not generating enough revenue to cover the rest of the athletic department.

The result was a $15 million debt, which was substantial considering the overall operating budget hovered around $25 million.

People lost their jobs:

(The A.D.) cut 25 positions that had come open through retirement or departure, which put a strain on the other 85-plus employees in the department.

After Stoops:

Increased budget for the entire department and additional sports for other students.

And in just a decade, the OU athletic department's budget has ballooned from $26.5 million to $70.8 million and the school has added women's soccer and rowing.

None of that includes the more than $120 million that was raised to renovate Memorial Stadium, including construction of the east side's upper deck.

Additional revenues from outside sources and enhancing the brand.

Since Stoops' arrival, advertising and sponsorship revenues have increased from $700,000 to $7 million. Licensing and trademark revenues have gone from $300,000 to $3.2 million.

The athletic department has also been able to raise an additional $65 million in capital donations that has gone to other projects, like construction of indoor facilities for baseball and softball.

Just win = just money.

Months before the 2000 season, Sooner officials scheduled the public kickoff of a $100 million capital projects campaign for Oct. 27, the weekend of the Nebraska game.

The day after the campaign was announced, OU hammered Nebraska 31-14 to assume the No. 1 ranking on the way to the school's seventh national championship.

The campaign had a three-year goal, but raised the $100 million in less than two years.

In all, the campaign raised more than $120 million, which led to construction of the east side's upper deck and suites and building of an indoor practice facility, the Everest Indoor Training Center.

A good coach's salary...worth every penny.

Only $220,000 of Stoops' annual salary comes directly from the university. The rest Stoops makes from supplemental compensation coming from endorsements and appearances.

"The vast majority of his compensation package comes from sources we wouldn't have without the level of success of the football program,” Castiglione said. "The endorsements, the radio and television, the events that he attends. Those things are successful because the football program under his leadership continues to be successful.”

The Flutie Effect

This section of the article is good enough to cut and paste the whole thing.

Dan Fulks, an accounting professor at Transylvania (Ky.) University, was asked in 2004 by the NCAA to analyze the budgets of 313 athletic departments over a three-year span.

While interviewing for a dean's position at Boston College, Fulks asked the school's president how diverse the student body was on campus.

"That depends,” the president told Fulks.

Pre-Flutie, he said, 80 percent of the students were from the eastern seaboard. Post-Flutie, only 50 percent.

In 1984, Boston College quarterback Doug Flutie won the Heisman Trophy, which increased the university's visibility outside New England.

"The Flutie Effect is very real,” Fulks said. "The visibility of a football program has non-financial benefits.”

OU president David Boren said Stoops and his winning football teams have had profound effects on the university's academic side.

"The national attention given to our football program brings many outside visitors to our campus where they become much more aware of our academic strengths,” Boren said.

"During televised football games we are also given an opportunity to provide a message outlining the strengths of our university including our academic excellence.”

Other effects are more financially tangible.

Two dollars from every Sooner football ticket purchased go toward academic endeavors. The OU athletic department also contributes an annual $1 million endowment to the university library.

Boren also believes that the success of the football team has contributed to an uptick in admissions applications and alumni giving to the non-athletic sides of the university.

"It is very difficult to exactly quantify coach Stoops' financial impact,” said Boren, who estimates that Stoops has made at least a $40 million impact to the university's non-athletic side. "An outstanding athletics program does attract students and tends to increase applications for admissions. The pride generated by athletic success does encourage private giving to the university. Much of the additional private giving results from visiting other parts of the university when friends and graduates come back to attend football games.

"Bob Stoops has had a very healthy impact on the high standards of the university in all areas. There is no doubt that he has helped to create a very positive image for the University of Oklahoma all across the nation.”