WSJ:The Odd Economics of Stanford Football
Posted: Fri Nov 08, 2013 5:03 pmThe Wall Street Journal
The Odd Economics of Stanford Football
With a Small Fan Base and Modest Revenue, The Cardinal Leans on Donors; $500,000 From a 26 Year Old
Fifth-ranked Stanford, once again in the mix for the Pac-12 title and maybe even more, pounded No. 3 Oregon, 26-20, on Thursday in one of this college-football season's biggest games, making the Cardinal the only team to slow down the Ducks the last two years. That makes this as good a time as any to ponder one of this sport's great mysteries: How is Stanford doing it?
There is no single reason for Stanford's rise from a pushover—one that supposedly couldn't compete because of its tough academic standards—to a powerhouse that wins because of them. The transformational 2007-to-2010 tenure of coach Jim Harbaugh, who has since gone on to the San Francisco 49ers, was clearly pivotal. So is the program's growing ability to convince elite high-school recruits of a Stanford degree's value.
But there is another critical factor behind the Cardinal's ascent: the way Stanford finances its football program.
Stanford isn't like other football powers. It can't generate as much cash from its fans, since it doesn't have nearly as many. Stanford Stadium seats about 50,000—half the size of some venues in the Southeastern and Big Ten conferences.
The school accounted for $9.7 million in football ticket sales on its 2012 annual report. The four teams ranked above Stanford in the latest Bowl Championship Series standings averaged $27 million, with Ohio State topping the list at $41 million. In merchandise sales, Stanford ranked 42nd this year on the Collegiate Licensing Company's list of top-selling schools, well behind not just Texas but also Texas Tech.
The normal revenues Stanford receives from football are so low, in fact, that its 36 varsity sports teams depend on something no other school has, or would dare rely so heavily on: an athletics-only endowment worth between $450 million and $500 million that pays out at 5.5% each year, people familiar with the matter said.
The way Stanford keeps up in the college-football arms race is to lean on private donations. As a result, almost everything the football program touches is endowed, from each of the school's 85 football scholarships to David Shaw's head-coaching position. Stanford's offensive coordinator is even known as the Andrew Luck Director of Offense in honor of an anonymous gift in 2012.
"Many have looked at Stanford to say: 'How can we make that happen at our place?'" said Stanford athletic director Bernard Muir.
CONTINUED:
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The Odd Economics of Stanford Football
With a Small Fan Base and Modest Revenue, The Cardinal Leans on Donors; $500,000 From a 26 Year Old
Fifth-ranked Stanford, once again in the mix for the Pac-12 title and maybe even more, pounded No. 3 Oregon, 26-20, on Thursday in one of this college-football season's biggest games, making the Cardinal the only team to slow down the Ducks the last two years. That makes this as good a time as any to ponder one of this sport's great mysteries: How is Stanford doing it?
There is no single reason for Stanford's rise from a pushover—one that supposedly couldn't compete because of its tough academic standards—to a powerhouse that wins because of them. The transformational 2007-to-2010 tenure of coach Jim Harbaugh, who has since gone on to the San Francisco 49ers, was clearly pivotal. So is the program's growing ability to convince elite high-school recruits of a Stanford degree's value.
But there is another critical factor behind the Cardinal's ascent: the way Stanford finances its football program.
Stanford isn't like other football powers. It can't generate as much cash from its fans, since it doesn't have nearly as many. Stanford Stadium seats about 50,000—half the size of some venues in the Southeastern and Big Ten conferences.
The school accounted for $9.7 million in football ticket sales on its 2012 annual report. The four teams ranked above Stanford in the latest Bowl Championship Series standings averaged $27 million, with Ohio State topping the list at $41 million. In merchandise sales, Stanford ranked 42nd this year on the Collegiate Licensing Company's list of top-selling schools, well behind not just Texas but also Texas Tech.
The normal revenues Stanford receives from football are so low, in fact, that its 36 varsity sports teams depend on something no other school has, or would dare rely so heavily on: an athletics-only endowment worth between $450 million and $500 million that pays out at 5.5% each year, people familiar with the matter said.
The way Stanford keeps up in the college-football arms race is to lean on private donations. As a result, almost everything the football program touches is endowed, from each of the school's 85 football scholarships to David Shaw's head-coaching position. Stanford's offensive coordinator is even known as the Andrew Luck Director of Offense in honor of an anonymous gift in 2012.
"Many have looked at Stanford to say: 'How can we make that happen at our place?'" said Stanford athletic director Bernard Muir.
CONTINUED:
http://online.wsj.com/news/article/SB10 ... #printMode
