Study: Butler Basketball Generates Over $1 Billion in Publicity For School

Posted by nvr1983 on July 26th, 2011

Every March, much of America is glued to their televisions (or computers) watching the NCAA Tournament. As we all know, the NCAA Tournament is big-time business with the newest TV contract selling for $10.8 billion for the right to broadcast the NCAA Tournament for 14 years. Numerous pundits point out that the schools get a significant amount of publicity which helps their reputation nationally as academic institutions (or at least places to watch pretty good basketball for four years) and often leads to spikes in applications. A study by Jaren and Devin Pope in Southern Economic Journal stated that the applications rose the year after a NCAA Tournament appearance by the following amounts:

  • NCAA Tournament appearance led to a 1% increase
  • Sweet Sixteen appearance led to a 3% increase
  • Final Four appearance led to a 4-5% increase
  • NCAA Championship led to a 7-8% increase
In some cases just making the NCAA Tournament means little to a basketball or academic stalwart like Kentucky or Princeton, respectively. However, for smaller schools they can be a huge boon, as demonstrated by Belmont, which drew in many fans after nearly knocking off Duke in the first round in 2008 and had its largest application pool ever the following year. Since 2006, the first year the Bruins made the NCAA Tournament, to 2011, their applications rose by nearly 70% going from 2,266 to 3,847. An even more extreme example is Butler, which saw its applications rise by 41% after its appearance in the 2010 NCAA Championship game.

How much is the publicity that a Cinderella gets worth?

While the data (both academic and anecdotal) on the increase in applications has become widely accepted and expected, there has not been much research on the actual monetary value derived from the exposure of having a basketball team representing your school on television and the Internet during the NCAA Tournament. Newly released data from a study commissioned by Butler estimates that the school may have generated over $1 billion in publicity from the basketball team’s two runs to the national championship game in 2010 and 2011. The study, which was conducted by Borshoff, a public relations company, looked at the media value of the television, print media, and online media that the school received during the last two NCAA Tournaments.
According to the research the school received, approximately $512 million in publicity was produced from this year’s NCAA Tournament run, of which $60 million came from television, $2.8 million from print media, and $449 million from online media. [Ed. Note: We are assuming that the audience of 69 billion via social media is a typo rather than an erroneous calculation that would make us question the entire study.] The television coverage from the national championship game alone was estimated at $2.2 million. One particularly interesting part of this study was how much they valued the publicity from online media as it accounted for nearly 87.7% of the total publicity value generated. With the growing popularity of Twitter and other social media platforms, schools and other large entities may start focusing more of their interest in online advertising rather than the typical big-money television or print media advertising campaigns.

Brad Stevens: A very good return on investment

For a school the size of Butler — estimated total endowment of $128 million — the opportunity to increase awareness of their school to such a degree would be impossible without the success of their basketball team. With estimated revenue of just $12.4 million for its entire athletic department and $2.8 million for its basketball team in the 2009-10 season, the ability to create that much publicity for the school is simply staggering. While the financial terms of the extension that Brad Stevens signed after the 2010 season were not released  (estimated to be close to $1 million per year in base pay), his prior contract paid him just $750,000. Although some local journalists questioned whether the move to give Stevens a raise was a prudent one, based on the estimated value of the publicity his team generated for the school, he has to be considered one of the best investments that Butler has ever made, or will ever make.
nvr1983 (1397 Posts)

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One response to “Study: Butler Basketball Generates Over $1 Billion in Publicity For School”

  1. This has obviously been huge for Butler. It’s not just a benefit to the basketball either but to every other sport. All of this additional money brought in has allowed for facilities upgrades across the entire campus. Hopefully it’s just the start of things to come.

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