One of the more entertaining aspects of producing the Emory Sports Marketing Analytics blog has been emotional nature of the criticisms that we have received. Our series ranking fan bases has been particularly provocative.
What does the preceding have to do with the Big Twelve? Some of our critics claimed that our rankings were “silly” because Kansas was not ranked in the Top Ten, while Oklahoma State and Texas were. We thought that we would take a bit more time with this post to investigate how we could possibly come to this result.
As a starting point, if you had asked us to name the top fan bases in college basketball before we ran the numbers we would have said (in no particular order) Kentucky, Duke, North Carolina, Kansas and Indiana. In other words, we would have bravely identified the conventional wisdom. But our goal at Emory Sports Marketing Analytics is to go beyond the conventional wisdom, and to see what the numbers say.
Our emphasis on financial metrics also leads to some complaints. This is somewhat odd given that we are covering sports that are clearly run like businesses. It has been reported that Bill Self’s current deal with Kansas will pay him close to $50 million over ten years. This suggests to us that Kansas very much views basketball through a financial lens.
Getting back to the conventional wisdom, we believe that Kentucky, Indiana, Kansas and Duke have exceptional fan bases. However, we are not ready to concede that the passion felt by a Kansas fan exceeds that felt by an Oklahoma State or Texas fan. Rather than rely on the noise created by fan bases, we examine how fans vote with their dollars. And more to the point, we try to control for the role of on-court success. While some may view this as crass, if you were the CEO of Apple or Coca Cola would you rather that your customers were highly loyal and willing to pay premium prices or would you rather that your brand was voted a fan favorite in an Internet poll? The marketing concept that we are exploring is referred to as customer equity. The basic idea is a brand’s ultimate source of revenues and profits is its customers. Now a big caveat to this is that by measuring the value of the customer bases we are not controlling for how good of a job each institution does with managing its customer base.
The preceding list provides our breakdown of the Big Twelve. Texas leads the way followed by Oklahoma State and then Kansas. So what drives this result? Over the last decade Texas has reported the largest basketball revenues in the conference followed by Kansas. Texas’ advantage in revenue is slightly more than 4%. More importantly, Texas generated this slightly higher revenue while winning around 5 games less per year than the Jayhawks. Now one can argue that Texas has unique advantages or that Kansas could be generating more revenue, but our analysis is at least based on solid numbers and our dependent measure (revenue premium based brand equity) is an unambiguous term.
The other surprise was the ranking of Oklahoma State. In this case, Kansas does produce about 25% more revenue than Oklahoma State. But the Cowboys generated their revenue while winning about 35% less games per year and no national championships. Both schools have proud histories and legendary past coaches. What our analysis gets at is what would happen if both teams performed identically. What would the environment be like at Gallagher-Iba arena if the Cowboys averaged 30 wins per year for a decade and had numerous trips to the Final Four?
(Note: The study examines 2001 to 2011, thus Nebraska, Colorado, Texas A&M, and Missouri are included in the Big 12)