Finance Uncategorized

College football and university branding

Universities allow its overall brand to be defined by its athletic programs, but most revenue is generated elsewhere.

(AP Photo/Jay LaPrete, File)
(AP Photo/Jay LaPrete, File)

Big time college sports has often been described as the “front porch” of universities. Because athletic program are the first touch point for many people, schools routinely utilize them to attract students and solicit donors, as well as to engage alumni and the community.

According to the NCAA, total home attendance for Division 1-FBS football games in 2013 was 35 million, with an average per game attendance of approximately 45,000. Serving as an extraordinary backdrop for university relations — notably to include business development — Saturday afternoons in the fall serve as 3D brochures for schools from coast to coast.

Add to this that perennial athletic powers leverage their national TV exposure by running public service announcements and other advertorials about the merits of the schools during the broadcasts. Again, it is an effort to favorably position themselves and attract a variety of business.

Universities consciously allow a large portion of their overall brand to be defined, reinforced and extended by their athletic programs, particularly by the brand of their football teams. This proves to be a strategy carrying great risk because the tail (reckless student-athletes) far too often wags the dog (senior athletic and university administrators).

Consider the following five major public universities with historically competitive football programs:

University Athletic Department Revenue* University Operating Revenue** % of University Revenue
Texas A&M 93,957,906 1,228,207,275 7.65
Florida State 91,382,441 1,088,337,558 8.39
Texas 165,691,486 1,430,216,358 11.59
Ohio State 139,639,307 1,044,950,000 13.36
Oregon 115,241,070 808,447,035 14.25

While perhaps not a perfect way to correlate the impact of athletics on a university brand, the chart is an interesting place to begin the dialogue. None of the five athletic departments generates more than 15 percent of its respective university operating revenue, yet there is little doubt that, as a percentage, these athletic departments’ contribution to their overall university brands is greater than their financial impact — far greater.

Given its national notoriety in football alone, is Florida State athletics merely 8.39 percent of the university’s overall brand? Maybe triple that at 25 percent? Or even higher? Can the same be said about Ohio State and the others, for that matter? Whatever the percentage, the gap between economic contribution and overall university brand impact is substantial.

(AP Photo/Tallahassee Democrat,  Bill Cotterell)
(AP Photo/Tallahassee Democrat, Bill Cotterell)

So every time a student-athlete shoplifts crab legs or trades jerseys for tattoos, the branding consequences are substantial. This has resulted in university administrators and athletic department personnel paying keen attention to any and all student-athlete indiscretions because the damage done in terms of public relations is enormous. The ability to get out from behind controversy can be time-consuming and costly, let alone distract from the attributes and accomplishments of the university; attributes and accomplishments that support a school’s core mission.

For example, we’re well aware of the ongoing off-the-field issues faced by Florida State’s Heisman Trophy winning quarterback, Jameis Winston. These challenges seem to be trumping the opportunities the university has to reinforce the contribution and success of the school’s nationally acclaimed programs in real estate, interior design, performing arts and, perhaps ironically, criminal justice.

Many know that Florida State is the top-ranked football team in the country. Some believe the university has become a caricature of itself given its recent, national news-making scandals. Too few may be aware of just how compelling the university is on numerous and diverse academic fronts.

From this comes a cautionary branding tale: When a high-profile business unit (athletics) outflanks the broader organization (university), the results can be costly. At major universities boasting strong sports programs, this can result in the front porch becoming the back porch.

*Total athletic department revenue for 2013, not only football: http://www.usatoday.com/sports/college/schools/finances/

**University operating revenues FY 2012-2013 were used for the purpose of a consistent comparison. It is likely these universities have larger overall budgets year over year, due to capital improvements, investments, non-recurring revenue, and special circumstances. These numbers don’t reflect the total budget of the school, only the operating budget. The percentage of university revenue would actually decrease if non-recurring revenue and non-operating revenue were taken into account.

Sources

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David Carter is the Executive Director of the USC Sports Business Institute and is an associate professor of sports business at USC’s Marshall School of Business. Bio

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