“Locally, the support is still there; people are still paying to go watch the team,” Tripathi said, “but on a national level, there has been a bit of a hit on the brand. That’s manifesting in the decline in sales of merchandise.”
We are presenting a series ranking the “best” fan bases in college football. The study uses data from the past ten years and the rankings are based on Revenue Premium Brand Equity. For more information on the analysis/methodology, please click here.
As a conference, the Big 10 finished second only to the SEC in overall football brand equity. The conference added Nebraska in 2011, and will add Maryland and Rutgers in 2014. The Big Ten has been very successful at creating a network that capitalizes on the appeal of its members. This fan appeal is also manifested in the top three schools in our rankings; all three schools have football stadiums with capacities over 100,000, and are regularly sold out.
The Ohio State University finished in first place in our ranking of Big 10 fan bases. In the ten year period of our study, the Buckeyes averaged 2.5 more wins per season than Penn State and Michigan, but also generated 20% more revenue. Remarkably, Ohio State made this revenue with fewer fans in attendance, on average, than Penn State or Michigan.
Penn State very narrowly edged out Michigan for second place in our study. Over the course of the study, Penn State and Michigan averaged almost the same number of wins (Michigan had more) and football revenue per year. However, Penn State’s second place ranking may be short-lived. The last couple of years have seen a decline in attendance. This may, of course, in part be due to the recent scandal and sanctions at Penn State.
Indiana and Northwestern are at the bottom of the Big 10 fan base rankings. Indiana seems to suffer from the same issue faced by Kansas or Duke. That is, how do you build football brand equity in a “basketball school”? Northwestern is an interesting case. A comparison with in-state “rival” Illinois (ranked 8th) is quite revealing. In the period our study, Northwestern averaged 1-2 more wins per season than Illinois. However, Illinois average 88% of capacity attendance, while Northwestern averaged 62%. Illinois also produced 30% more football revenue than the Wildcats.
Michael Lewis & Manish Tripathi, Emory University 2013.
Over the next week or so, we will be publishing analyses of the “best” fan bases in college football. Our plan is to go conference by conference, and talk about which teams have the most loyal fans. Our approach is data and statistically driven, as we will be looking at how fans support their teams after controlling for how well the team performs. The series will conclude with an overall ranking of teams.
Before we get to the team rankings we wanted to start with an analysis of conferences. Beyond regional pride, our conference rankings are related to the topic of conference realignment. Conferences are the sum of their parts with some added bonus due to the synergies the overall group creates. Our fan equity analyses therefore provide a means for anticipating how new or changed conferences will compare with each other.
For those that have previously seen our other brand equity analyses, we should note that our conference-level analysis takes a slightly different approach. For the fan analyses, we build a statistical model that predicts team revenues as a function of metrics related to team performance such as winning percentage and bowl participation. We then compare actual revenues to what is predicted based purely on team performance (and other factors such as number of students, capacity, etc…). Click here for an explanation of why we use this “revenue premium” approach to brand equity measurement.
For the conference analysis, we take a similar, but more financially oriented approach. This analysis also begins with a statistical model of team revenues, but now the explanatory variables primarily involve team expenditures. Team-level brand equity is then taken as the difference between actual revenues and revenues predicted based on expenditures. The logic of this approach is that teams with more powerful brands should be able to more efficiently increase revenues. As an example, imagine a comparison between the University of Notre Dame and perhaps Rutgers. If these teams spent the same amount in a given year, we would still expect Notre Dame to have significantly greater revenues simply because ND has such a large and loyal following.
We rely on this ROI (Return on Investment) oriented measure for the conference ranking because we have a significant interest in conference realignment. In this era of realignment, it seems obvious that conference membership decisions are almost entirely driven by financial considerations. In other words, while we feel that fan support should be measured relative to team performance, when it comes to conferences we believe that schools should be evaluated based on ROI.
Finally on to the rankings…
In an altogether unsurprising result, the SEC is ranked number one, followed by the Big Ten in the second position. The SEC ranking is notable in that while we all know that the SEC has dominated on the field; our results also suggest that the conference schools are extremely efficient in translating the intensity of fans into dollars. On the realignment front, it seems certain that Missouri and Texas A&M were largely driven by the financial attractiveness of the conference. It remains to be seen if these schools have traded cash for also-ran status.
In second place, we have the Big Ten Conference. The Big Ten is in many ways a leader in the space, as they have been successful in creating a network that leverages the appeal of its members. The Big Ten has also been notable in its efforts to attract teams that expand the conference’s access to media markets.
In a distant third place we have the Big 12. The Big 12 is interesting in that it has, and had, several very well-known brands such as Texas, Oklahoma and Nebraska. Of course, the Big 12 has also been the major conference that has seen the most attrition as Missouri, Nebraska, Colorado, and Texas A&M have all moved to seemingly greener pastures. Despite this attrition, the conference does well in our rankings, and out-performs two of the other Big 5 conferences. The big question for the Big 12 is whether it will be sustainable in the long-term. The Big 12 has two key weaknesses. First, it’s unclear if it covers enough major markets to successfully develop a media strategy that will allow the conference schools to be competitive with other better-located conferences. The second issue is that the Big 12 is very top heavy. Texas is the obvious (financial) jewel of the league. Will Texas share or will the Longhorns go their own way?
In fourth place, we have the PAC 12. The PAC 12 is promising case in that it seems to be well positioned for the future. In terms of teams, it contains both historical powers like USC and up and coming teams like Oregon. The conference also covers major media markets, but its west coast time zone may be a limitation.
Perhaps the biggest surprise in our analysis was that the new American Athletic Conference (AAC) ranked higher than the ACC. This is a non-intuitive finding as we expected that historically successful programs such as Florida State and Miami would lead the ACC past an AAC led by Louisville and Cincinnati. The reason for this result is actually quite simple. The ACC schools have invested in football at about the same level as the Big 12 and PAC 12 schools, but with lower resulting revenues.
Mike Lewis & Manish Tripathi, Emory University, 2013.
College sports are changing rapidly. From the soon to be instituted college football playoff to the potential changes the Ed O’Bannon lawsuit forces on schools, we are clearly in a time of change. The subject of today’s post is another example of these changes, as our focus is on conference realignment. The cynic, who in this case would be correct, would say that the realignment activity of the past few years has been driven by money. It has been the quest for new television markets (Rutgers to the Big Ten) and powerful brands (Nebraska, also to the Big Ten) that has led some conferences to grow, and for many teams to make moves.
The topic of realignment is top of mind today because it is the first day of the American Athletic Conference. This new AAC is largely comprised of refugees from the Big East and Conference USA. Today’s analysis looks at how the shuffling across conferences has increased the overall brand equity of each league. For this analysis we use the results of our previous college basketball brand equity analysis. The one significant change is that for this analysis we do not separate out the conference effects when computing team-level brand equity. Each league’s rank is then the sum of its teams. We perform the analysis for both 2012 and 2014.
The analysis yields some expected and surprising results. The Big Ten leads the way both in 2012 and 2014, with the ACC following behind in both years. However, while the Big Ten has a large lead in cumulative brand equity in 2012, the gap is almost negligible in 2014 (In terms of percentages the brand equity of the ACC basketball programs was 81.7% of the Big Ten’s in 2012, but with the changes scheduled to occur, the ACC will have 97.2% of the Big Ten’s equity in 2014).
Of course, the most interesting part of the table concerns the new Big East (Catholic 7) and the new American Athletic Conference. The Big East drops from being the 3rd ranked conference to being the 6th best conference in 2014. However, it should be noted that this drop is primarily due to the reduction in the league size. In terms of average equity the remaining Big East schools still have the 3rd highest average score.
For the new American Athletic Conference the story is not very hopeful. The new American Athletic Conference is projected to rank 9th behind the power 5 conferences, the Big East, the Mountain West and the Atlantic Ten. This was a somewhat surprising finding given that the American Athletic Conference will still contain schools like Cincinnati, Memphis, and UCONN. But the numbers suggest that Dayton, UNLV and New Mexico have sufficient fan equity to move their leagues past the American Athletic Conference.
The other big story is the positions of the PAC 12 and the Big Twelve. In 2012, the Big Twelve had a 22% advantage in terms of brand equity, but we forecast that in 2014 it will trail the PAC 12 by 7%. These types of changes are important as there is a bit of a game that occurs within conferences. Schools in weaker conferences are likely to have a greater incentive to jump to stronger leagues because they fear being left in a dying league without great options. The Big Twelve has recently lost Colorado, Texas A&M and Missouri. If Texas were to leave, the conference would likely disintegrate.
We would also like to make a couple of notes regarding some assumptions implicit in the model. Our use of revenue premium based brand equity as of 2012 means that each school’s brand equity can be viewed as partially a product of their affiliation in that year. This is important if a league’s value is more than just the sum of its teams. For example, the Big Ten pursued Rutgers largely to secure entry into the NY television market. The logic behind this move would seem to be an assumption that competition with Big Ten teams will improve Rutgers’ attractiveness within the market. Our analyses do not (as of now) include this type of potential synergy. The new ACC has at least partially adopted a television based strategy as the members are widely distributed across the nation. The hope has to be that this cross country coverage creates synergies that simultaneously create interest in the teams and the league. However, given the current lack of brand equity and the aggressiveness of stronger leagues to form lucrative television networks, this will be a tough haul.
Our post on the Best Fan Bases in college basketball generated several interesting comments and questions. One common request was to see how other schools stacked up. There were also a number of questions related to the methodology.
Today we start with the complete results for the Big Ten Conference (Our next post will examine the PAC-12). Indiana comes out on top followed by Minnesota, Ohio State and Wisconsin. At the bottom of the list we have Penn State and Michigan. Nebraska is not included in these ratings due to lack of data.
The difference between Indiana and national runner up Michigan highlights the way our method works. For most of the last decade, Michigan and Indiana both struggled on the court. Consequently, Michigan fans stayed away, while Indiana continued its streak of ranking in the top 15 in the nation in terms of attendance. We should also add for those that want to claim some sort of bias, Professor Mike Lewis is a diehard Illini fan, and it pains him to have Indiana rank number 1.
It may also be useful to provide a bit more of the methodology used to generate the rankings. We start with information on men’s basketball revenues reported by the Department of Education. As an aside, we should also point out that the analyses reported on the website all rely on publically available data. While this data may not be perfect (like just about any other data set), we do not have any reason to believe that the data is systematically biased.
We then build a regression model that predicts these revenues as a function of data that corresponds to team quality and market potential. The following equation is a portion of the model used (we are trying to keep the stats to a minimum as we expect that 95% of readers just want to see the results):
The actual statistical model included a number of other factors such as dummy variables for each conference and several nonlinear measures of team quality such as a quadratic term for winning percentage.
We use this model to make a prediction of revenue for each school (i) in each year (t). We call this prediction Revhat(i,t). We next compute the residual for each observation in the data (Rev(i,t)-Revhat(i,t)). This residual represents the difference in actual revenues versus the revenues expected based on market potential and on-court performance. The fan equity rankings are based on the sum of the residuals for the last 5 years (the model is estimated using ten years of data).
A couple of points are worth noting. First, we do not use a school fixed effect because we are interested in how this residual changes. Using the last five years is a compromise between eliminating noise that occurs in a single year and also capturing the enduring but evolving fan equity.
A second issue that merits discussion is the role of conferences. In our model we estimate a conference effect. The reason we do this is to eliminate the benefits that a weak school can collect simply by being in the right conference. For example, if we do not control for conference revenues schools like Northwestern actually do very well in the rankings because their revenues are extreme given their (lack of) on-court success.
The issue of conferences is a tough one and one that is beyond the type of analyses we do for the website. The issue is that it is difficult to disentangle the conference effects from the school effects. The outcome of this problem is that a school like Indiana ends up suffering in the overall ratings because some of the Big Ten “equity” should really be allocated to the Hoosiers.
The table below shows the rankings of conferences. As expected the Big Ten leads the way followed by the ACC. The key caveat for this chart is that the Big Ten network is what pushes the Big Ten ahead of the ACC.
Look out for our next post that will examine the PAC-12…
The 2013 NFL Draft has concluded, and we would like to offer our thoughts on the ability of conferences and schools to turn high school talent into NFL Draft Picks. We continue our team-level discussion with an analysis of the Big Ten. (Our next conference will be the ACC, follow us @sportsmktprof for updates)
To reiterate from our previous post, this is only an analysis of the 2013 NFL Draft. We are examining how many picks were produced by each school, relative to their recruiting classes over the relevant corresponding period for the 2013 Draft. As with any analysis based on essentially a single data point it’s important to remember that these results are more anecdotal than conclusive. That said, the 2013 draft does produce results that are largely consistent with our multiyear statistical study of recruit conversion.
Winners: The winners of the 2013 draft include Illinois, Wisconsin, Purdue and Michigan State. This is an interesting mix of schools in that it includes two teams that tend to struggle on the field (but dammit Zook could identify talent!) and two teams that are often near the top of the Big Ten standings. Wisconsin in particular seems to excel at turning out pros.
Middle of the Pack: The next group includes several historical powers. Ohio State is an interesting case. While the Buckeyes went undefeated, they actually had one less draft pick than Illinois (did we mention that Zook could identify talent)..
Losers: The “losers” category also included an interesting mix of schools. Perennial power Michigan is in this category, but we also see schools that tend to recruit at a lower level such as Indiana.
By Mike Lewis & Manish Tripathi, Emory University 2013
Methodology for the study explained here.