Autonomy Football Bowl Subdivision (FBS) institutions’ desire for external revenue has significantly impacted the priorities, strategies, and decisions of their intercollegiate administrators and departments. To date, most revenue generation research has been conducted in the context of overall department-generated revenue. However, intercollegiate decisions are made by each specific subset of revenue sources. Given the lack of research on specific types of revenue sources, the purpose of our research study published in the Journal of Applied Sport Management was to investigate marketing-generated revenue sources within autonomy FBS institutions.
Examining factors that influence marketing-generated revenue (i.e., corporate sponsorships, advertisements, licensing, and royalties) can support autonomy FBS intercollegiate athletic administrators’ decision-making and strategic planning of marketing-generated revenue agendas. Marketing-generated revenue has risen from $6.8 million to $10.4 million since 2015 and will continue to rise (NCAA, 2020b). The rise in corporate sponsorship spending generates substantial benefits for intercollegiate athletic departments. Facility, financial, and success determinants have the most significant effects on corporate sponsorship spending.
Facility determinants. Facility determinants are described by the attendance and capacity of stadiums/arenas. The exposure of corporate partnerships through in-venue signage creates a large amount of recognition and awareness. Therefore, attendance can attract higher numbers of marketing-generated revenue. The potential audience represents the facility’s total capacity. The larger the capacity, the higher percentage of consumer awareness and corporate sponsorship recognition. This creates more incentives for marketing-generated revenue.
Financial determinants. Financial determinants are described as donor contributions and competition guarantees. Donor contributions generate approximately 22.7% of Division I FBS revenue. These revenues are used to help build or renovate sports facilities. Additionally, competition guarantees, more commonly known as “cake games”, contribute to autonomy FBS teams winning percentage and potential bowl eligibility. Therefore, competition guarantees revenue strongly depends on conference affiliation (McEvoy et al., 2013).
Success determinants. Success determinants are described by a team’s overall winning percentage. As we know, football and men’s basketball winning percentages increase overall generated revenue for autonomy FBS institutions (McEvoy et al., 2013). Winning percentages can also increase corporate sponsors’ amount of exposure (Jensen, 2012).
The influence these determinants have on 52 public autonomy FBS institutions’ marketing-generated revenue was examined over a five-year period (2015-2019). The sample period reflected the autonomy institutions’ last conference realignment in 2014 and the disruption of sports in 2020. Since football and men’s basketball create the highest generating revenue (Drozdowski, 2020), the facility and success determinants focused on these two major sports.
Findings & Implications
The facility, financial, and success determinants that were found to increase marketing-generated revenue can help autonomy FBS intercollegiate athletic departments determine how to best support their institution. The results also benefit intercollegiate athletic administrators’ budgeting and financial activities.
- Conference affiliation is strongly correlated with marketing-generated revenue. Intercollegiate athletic departments should consider conference affiliation when determining their in-facility corporate marketing strategies. For example, the Big 10 and the Pac 12 showed higher revenue generation when tailoring their partnership strategies toward marketing-generated revenue sources. On the other hand, the SEC showed lower revenue generation for marketing-generated revenue than any other autonomy FBS conference. Therefore, the SEC may want to focus its partnership strategies towards other generated revenues, such as media and broadcasting.
- Regardless of conference affiliation, football per capita attendance by designated marketing area (DMA) and stadium capacity positively increases marketing-generated revenue for all autonomy FBS intercollegiate athletic programs. Intercollegiate athletic departments should consider how to maximize the capacity in a football stadium while also increasing the comfort and leisure of the seats. Part of the capacity and attendance numbers may be influenced by the facilities’ ability to create more ‘spectator-friendly amenities’ (Palmero & Price, 2015). Intercollegiate athletic departments should allocate funds toward spectator-friendly amenities such as Wi-Fi accessibility, charging stations, and socialization areas. This will attract higher attendance rates, thus, increasing consumer awareness and potential brand equity of sponsorship brands. Higher brand awareness and equity will attract more marketing-generated revenue sources. Further, as consumer digital marketing engagement increases, DMAs become more significant. Intercollegiate athletic marketing managers should adopt more digital platform marketing strategies for sponsors to attract more online viewer attention.
- Autonomy FBS football is more valuable for increasing marketing-generated revenue than men’s basketball. The capacities/attendance of a football stadium presents more extensive capabilities for brand awareness. Therefore, intercollegiate athletic marketing strategies should focus on football capacity, attendance, and viewer numbers as incentives for corporate partnership deals. At the same time, men’s basketball intercollegiate athletic marketing strategies could lean towards creating higher media and broadcasting contracts.
- Donor contributions positively increase marketing-generated revenue for autonomy FBS intercollegiate athletic programs. Donor contributions can expand sponsorship opportunities or spectator-friendly amenities, raising consumer awareness and brand association. Therefore, intercollegiate athletic departments should allocate donor contributions to building sponsors into the design of spectator facilities or to creating more spectator-friendly amenities. Administrators should shift their facility designs to encompass these two aspects, which will help increase consumer attendance and be used as an incentive for corporate partners to increase their brand awareness and return on investment.