Saint Peter’s University’s unexpected trip to the Sweet 16 has put the small (enrollment: ~2,400), Jersey City-based institution on the map. But an academic study published by a pair of University of Dayton associate professors (Trevor Collier and Nancy Haskell) and Seton Hall University professor Kurt W. Rotthoff indicates the school’s Cinderella run is unlikely to have as large an impact on its academic mission as one might assume. Rotthoff suggests at the high end, the university might generate an additional $1 million in net tuition revenue–less than 1% of its annual budget.
JWS’ Take: Prior academic studies have concluded that athletic success—and by proxy, the positive exposure that comes with it—can lead to gains in fundraising, endowments, applications and admissions. Rotthoff expected to find unlikely March Madness runs have historically driven “massive bumps” in those categories. The sports economist said he was “amazingly shocked” when the data did not support the narrative.
Donor data is hard to get. So the “Cinderella Effect” study did not have the data pool necessary to confirm fundraising and endowments rose with postseason success. But Rotthoff expects both would. A subsequent study done by the professor indicated that malfeasance issues in sports, including postseason bans, had a negative effect on donor activity.
It makes sense that NCAA tournament success would have “little to no impact,” as Rotthoff found, on the number of applications received for the ensuing fall semester. The “Big Dance” does not get started until mid-March. By then, most high school seniors have long submitted their applications, and are narrowing down their choices with May 1 deposit deadlines for enrollment looming.
Perhaps more surprising is that there is no statistical evidence to suggest applications rise in subsequent years, either. Rotthoff believes that may be because a significant portion of the 52 schools who have worn Cinderella’s slipper since 1985 experienced prior athletic success (see: Syracuse’s 2016 run to the Final Four). As a result, they were already well-known to college sports fans and thus the exposure received as a result of the hardwood success had less of an impact on prospective students.
Rotthoff indicated there were other schools whose tourney runs coincided with greater investments in the industry at large. “So they were already building their brand name, and the Cinderella run kind of capped it off.” In those cases, it is difficult to determine just how instrumental winning was to the increase in applications received.
There are examples of the Cinderella effect driving applications. Butler University experienced a ~40% increase following its basketball team’s unexpected appearance in the 2010 title game, and Florida Gulf Coast University reported a similar lift after its men’s team reached the 2013 Sweet 16. But as Rotthoff explained, “If [Butler and] Florida Gulf Coast saw a bump, there’s another [pair of] schools who made a Cinderella run who didn’t see the bump they were expecting. And on average, the evidence [that Cinderella runs equate to increases in applications] isn’t there.”
While there was no impact on the number of applications filed, the study did find that freshman enrollments rose an average of 4.4% two academic years after a school’s basketball program made a surprise run. Private institutions, which accounted for 45% of Cinderella runs between 1985-2017, experienced the greatest increase. “This potentially comes down to advertising. Public schools are typically larger and [better] known to students in the area,” Rotthoff said.
Using the median increase cited, the typical enrollment class size at Saint Peter’s (650 students) and the school’s tuition rate ($27,344), it’s fair to assume the Peacock’s 2022 tournament run will generate ~$800,000 in additional net tuition revenue for the school come 2024. FWIW, the average private school making a March run sees tuition and room and board revenues climb $7.3 million (in 2012 dollars).
Because Saint Peter’s is smaller and less well known than many of the private schools who have worn the slipper, Rotthoff said the Peacocks could see admissions climb by more than 4.4%. But that might mean 35 additional students enrolling in the 2024 freshman class (as opposed to 29) and $1 million in net tuition revenue (as opposed to $800,000)—not thousands of students and tens of millions in revenue. For perspective, a $1 million increase in net revenue would represent less than 1% of the school’s budget. Saint Peter’s reported $140.5 million in 2019 revenue.
The study did not specifically look at schools with a religious affiliation (there likely are not enough examples in the data set to make a determination). But Rotthoff theorizes a Catholic institution like Saint Peter’s would also benefit more from the exposure than the average private Cinderella, simply because students who want to go the religious route are choosing from a smaller pool of schools.
Similarly, Rotthoff hypothesized that Saint Peter’s may generate outsized returns from the exposure because of its standing as a so-called commuter school. “Part of what [a school] is buying with a Cinderella run like this is a campus culture or campus vibe. In addition to tuition, room and board is where a lot of universities make a portion of their money as well. So, if they have beds to fill, this can help.”
New Jersey college basketball authority Jerry Carino recently tweeted that Saint Peter’s would “reap $100 million worth of publicity from this run.” The nine-figure estimate accounted for “6-plus hours of free national advertising on CBS, 10 days of being the biggest story in the NYC market & countless social-media impressions.”
Rotthoff doesn’t believe the figure adds up. “When you’re throwing out numbers like $100 million, you’re talking about [the cost of a] stadium naming rights deals, so that seems ridiculous to me,” he said. The fact that much of the exposure received is not for sale (meaning there is no way to value it) and that the school will only generate an additional million dollars in tuition revenue only added to his doubts.