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Every year right around this time, I receive a call from my college’s alumni association. They ask me if I would consider donating money. For those that listened to a recent Malcolm Gladwell podcast, he put together an excellent synopsis of why you should not donate money to universities with large endowments. I encourage you to listen if you haven’t.
My college’s endowment is $1 billion. Yet they are still asking for more to “invest” in their future. I contend that there may be a better way to donate your money to your college to get a bigger return on your investment. Instead of giving directly to the university, I think it is much wiser to support the school’s athletic program.
Nick Saban & the University of Alabama
Nick Saban is a premier college football coach at the University of Alabama. The Crimson Tide have won four national championships since he arrived in 2007. When he first became Alabama’s head football coach, he signed a deal for 8 years at $32 million. This made him the highest paid college football coach in the nation.
In 2007, an annual salary of $4 million was unheard of for a college football coach. At that time, Bob Stoops, the Oklahoma Sooners coach, was the highest paid college football coach making $2.5 million dollars. There were howls among the media that this was excessive, especially for a public school.
Before Saban arrived, Alabama’s athletic department generated $67.7 million in revenue. In 2015, Alabama’s athletic department generated a whopping $148.9 million in revenue. In the same year, Alabama’s football program alone produced $95.1 million in revenue. This is the highest figure produced by any single collegiate team ever. Needless to say, Nick Saban has earned his paycheck.
Nick Saban’s football team is virtually supporting all the other sports in Alabama’s athletic department. On top of that, Alabama is one of a few schools that does not charge students an athletic fee to subsidize the athletic department. For instance, Florida State University charged its 32,000 students $237 in 2014, claiming that this charge would allow students to go to football games for free. However, they failed to mention that there were only 16,000 student seats available.
The Saban Effect
As you know, people like to be among celebrities. So it is no wonder why applicants would be drawn to a school with a superstar coach. Since 2007, enrollment at the University of Alabama has gone up more than 50%, from 23,000 to over 37,000 students. This surge in applications has been called the “Saban Effect”. This is much like the “Doug Flutie Effect” in 1984 at Boston College or the “Michael Vick Effect” in 2000 at Virginia Tech. Each of these schools benefited from a star coach or athlete to increase enrollment numbers.
There are strong statistics showing that increased athletic success is correlated with an increase in applications. A study done by Virginia Tech and the University of Pennsylvania showed that when a college team won a football championship, applications increased by more than 7%. On average the following year, applications also increased by 10%.
“The sheer fact that you gain that national attention does help in terms of students becoming aware of the institution, and it gives you the opportunity, if you have their attention, to help them understand what the university has to offer academically,” said Roger Sayers, president of UA from 1988 to 1996.
With that national exposure, out-of-state students have become more aware of Alabama’s academics. In 2004, Alabama had 28% out-of-state students. It is now made up of 64% out-of-out state students. In-state fees are currently $9,220, while out-of-state fees are $16,156, so that’s about $7,000 more per out-of-state student. With an increase of enrollment in general and also out-of-state students, the school has been able to take in more than $93 million in tuition fees.
With the ever-increasing applications, Alabama can be more selective in who they choose to attend, even with an increased number of students. The year before Nick Saban came to Alabama, the acceptance rate was 64%. Now it has dropped to 51%. Meanwhile, the GPA and SATs of these students has also risen steadily.
Finally, since Alabama’s athletic program is doing so well, they are one of a handful of schools in the U.S. that gives back surplus money to the university to support academic scholarships, according to a 60 Minutes program in 2013. When you add all this up, it appears that Nick Saban has made the University of Alabama much more money than he is paid.
I wish my university had paid Nick Saban whatever he wanted, so it could have had the meteoric rise that Alabama has had. While some will say that colleges should focus more on academics, it’s clear that college students like spending their free time being entertained by sports, specifically football. Since this is the case, I think next time my athletic department calls, I should make a donation, since there is a good chance that this could ameliorate the profile of my university.
What are your thoughts? Do you contribute to your Alma Mater’s sports program? Are you more motivated to do so now? Share your thoughts below.