Switches between exclusive apparel sponsors and college football programs are routinely accompanied by grand, public announcements promising significant effects on recruiting and on-field performance.
“Under Armour apparel, footwear and equipment offers our teams the best innovations and latest technologies to ensure we have a competitive advantage on the field of play,” pronounced former Northwestern AD Jim Phillips, after the school switched from Adidas.
“We believe this partnership will allow us to provide a new competitive edge to our coaches, student-athletes and our incredible fan base,” predicted Washington AD Jennifer Cohen, after the school switched from Nike to Adidas.
“A lot of the young people like that we’re with Nike,” said former Pittsburgh AD Steve Pederson, after the school left Adidas. “If they feel good in it, then chances are they’ll perform better in it.”
To find out whether a switch in apparel brands actually helps programs on the field and in recruiting, I teamed with Baylor University sport marketing professor Lane Wakefield and Rollins College finance professor Brian Walkup to analyze 98 different agreements between apparel brands and Power Five football programs. We then collected data on recruiting, attendance, and on-field performance over 15 years, a period that featured more than 20 instances of switches in apparel brands. The data was analyzed using an advanced statistical methodology that isolates change over time on a per school basis, and controls for changes in other variables like conference affiliation, stadium capacity and strength of schedule.
The result? It’s all about the Benjamins. Programs that switched earned an additional $2.9 million in the first year after the switch, including more than $1.5 million in cash and $1.2 million in apparel and equipment.
The supposed edge in recruiting and on-field performance? A mirage. Even four years after the switch, there was no effect on wins or recruiting rankings, and attendance actually went down in subsequent years.
As for the brands themselves? We found the market actually viewed these switches with skepticism and responded with a drop in the new sponsor’s stock price in the days following the announcement. Despite the ego trip associated with wrestling a deal away from a competitor, the market viewed the decision negatively, due to the additional costs required and the potential for a negative return on investment.
The takeaway for college administrators? Be clear-eyed about the motivations behind a sponsor switch. In all likelihood administrators and coaches may not believe their own claims, but feel the need to start the relationship with their new partner off on the right foot by toeing the company line, simultaneously providing a rationale for the school’s decision to switch. However, in today’s era of college athletics, alumni, fans and recruits understand the importance of resource acquisition. Explain how the additional funds will be allocated and how they will help college athletes by attracting better coaches or enhancing facilities, rather than making promises regarding on-field performance that may heighten expectations and are likely to fall flat.
Jonathan A. Jensen, a former sports marketing executive, is an assistant professor of sport administration at the University of North Carolina.