Study estimates revenue produced by top college football players

April 16, 2020

COLUMBUS, Ohio - The most elite players in college football increase revenue for their school football programs by an average of $650,000 a year, a first-of-its-kind study suggests.

This is the money brought in by the highest-rated recruits coming out of high school - those given five stars by Rivals, a recruiting news service, according to researchers at The Ohio State University.

Four-star recruits generated about $350,000 a year and three-star recruits increased revenue by about $150,000, while two-star recruits actually reduced revenue by about $13,000 a year for college football programs, the study found.

Amid the continuing national debate about compensation for college athletes, this study offers the first solid numbers on the financial impact of players in the highest-revenue college sport, said Trevon Logan, co-author of the study and professor of economics at Ohio State.

"There have been a lot of numbers put out there about how much college athletes should get under various compensation proposals," Logan said.

"But it's hard to do that when you don't know how players affect the bottom line. That's what we're trying to do here."

Logan conducted the study with Stephen Bergman, a former undergraduate student at Ohio State. The study has been accepted for publication in the Journal of Sports Economics.

For the study, the researchers collected a unique dataset from the federal Office of Postsecondary Education that included annual football-specific revenue and expenses from 2002 to 2012 for all college football bowl subdivision (FBS) schools - the top level in the sport.

To evaluate the quality of football players, the researchers used the high-school rankings of the players from Rivals. Using these rankings are the best way to rate college players for several reasons, Logan said.

One of the most important is that the service rates both defensive and offensive players the same way. Without access to this type of ranking, it would be nearly impossible for researchers to develop their own method to rate the impact of a defensive player's impact on the field on a similar scale to an offensive player, he said.

The researchers then calculated the effect of recruit quality on team performance, including wins and college bowl appearances. They then estimated the effects of team performance on total revenue.

The calculations were completed just before the current college football playoff system was introduced in 2014.

Results showed that five-star recruits had no statistically significant effect on the likelihood of their team getting to a bowl game. This was probably because teams didn't need the best players to get to just any bowl, Logan said.

But a five-star recruit increased the probability of appearing in a Bowl Championship Series (BCS) game - the elite bowls that helped determine a national championship - by more than 4 percent if they played for one of the top schools.

"The best recruits had a significant impact on team performance and their ability to appear in the most lucrative postseason bowls," Logan said.

The study estimated that $650,000 was generated by five-star recruits because of the wins, bowl appearances, BCS bowl appearances and premier bowls that they helped their schools achieve - all of which bring additional revenue to their schools.

For some analyses, the researchers controlled for the fact that football powerhouses like Alabama or Ohio State tend to attract more of the highest-rated players than other schools.

That means that the revenue value of any individual elite player at a top school wouldn't be as high as it would be at other schools.

But the value would still be high, Logan said. When the school effects were taken into account, each five-star recruit still increased revenue by nearly $200,000 a year, while four-star recruits were responsible for nearly $90,000 a year.

The conferences that schools participated in also affected revenue, because many conferences share money earned with all their members, regardless of performance. The researchers also took this into account in their analyses.

Logan said it isn't possible to come up with clear compensation policy recommendations based just on the results of this paper.

One important issue is that the revenue from football supports many other college sports that don't make money, he said.

"If you pay players, especially based on how much they generate, you will also have to reduce the number of other sports available," Logan said.

"What our study can do is bring some hard data to the discussions about compensation."
-end-
Contact: Trevon Logan, Logan.155@osu.edu

Written by Jeff Grabmeier, 614-292-8457; Grabmeier.1@osu.edu

Ohio State University

Related Performance Articles from Brightsurf:

Guiding the way to improved solar cell performance
Small molecules could hold the key to enhancing the efficiency of organic solar cells.

Performance test for neural interfaces
Freiburg researchers develop guidelines to standardize analysis of electrodes.

Cognitive performance - Better than our predecessors
We employ our cognitive skills daily to assimilate and process information.

Predicting sports performance with "big data"
Smartphones and wearable devices are not simple accessories for athletes.

All of the performance, none of the fuss: Nitrile hydrogenation done right
Researchers developed a nano-cobalt phosphide catalyst (nano-Co2P) for the hydrogenation of nitriles to primary amines.

Big ideas in performance management 2.0
Industrial-era performance management paradigms and practices are outdated and ineffective in the modern VUCA work environment.

Can exercise improve video game performance?
Time spent playing video games is often seen as time stolen from physical activities.

Anticipating performance can hinder memory
Anticipating your own performance at work or school may hinder your ability to remember what happened before your presentation, a study from the University of Waterloo has found.

Want to optimize sales performance?
CATONSVILLE, MD, September 16, 2019- According to new research published in the INFORMS journal Marketing Science, companies can improve sales performance when they adjust sales commissions for the sale of more popular items.

Assessing battery performance: Compared to what?
A team from the US Department of Energy's (DOE) Argonne National Laboratory, University of Warwick, OVO Energy, Hawaii National Energy Institute, and Jaguar Land Rover reviewed the literature on the various methods used around the world to characterize the performance of lithium-ion batteries to provide insight on best practices.

Read More: Performance News and Performance Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.