Basketball success a financial boon for KU
When the Jayhawks make a run to the Final Four, it means a whole lot more than a lot of happy fans. It can boost the university in all sorts of ways, too.
“More than anything, we sense an incredible amount of pride in the university among all graduates,” said Kevin Corbett, president of the Kansas University Alumni Association.
But there is a financial windfall for the university, too.
Paul Vander Tuig, trademark licensing director for Kansas Athletics, oversees all the revenue that comes in from apparel, mugs and all the other officially licensed items. Generally, Kansas Athletics receives 10 percent of the wholesale price for officially licensed items. For tournament items, the licensing fee is 14 percent. The NCAA keeps 4 percent, and the remainder of the teams on the item split the other 10 percent.
So a Final Four shirt with Kansas, Kentucky, Louisville and Ohio State on it means each of those teams splits 10 percent of the wholesale price.
Predicting the revenue that will come in can be tricky, especially with recent growth in online sales and marketing of licensed gear.
In 2003, when KU lost to Syracuse in the title game, KU saw $770,000 in royalty fees, up about $250,000 from the previous year.
In 2008, the year KU won the national title, it generated $2.2 million, nearly double 2007’s take. But that level has stayed high since then, generating $1.8 million in the year ending June 30, 2009, $1.9 million in 2010 and $2.1 million in 2011.
“Experience tells us that it’s going to be worth something,” Vander Tuig said of the basketball success. “We can’t budget for it. There’s just no way to know or to even guess.”
The university itself — not just the athletics department — benefits from the licensing fees as well. Kansas Athletics handles licensing fees for all university-related items, even those that don’t feature athletics. As part of that agreement, Kansas Athletics gives half of that money to the university itself, said Jim Marchiony, associate athletic director. The university, in turn, uses the funds for its unions in Lawrence and at KU Medical Center, in addition to providing for student scholarships. The costs of the licensing program are removed from the gross receipts before Kansas Athletics and the university split the net revenue, Marchiony said.
During the tournament, Corbett said, he got emails from alumni across the country telling him how much fun it was to go into work and talk about the team’s success. Those feelings can drive more memberships to the association, he said, carrying over until after the tournament is over.
The association also sponsors watch parties at tournament sites and smaller ones across the country (and the world, too, as Corbett pointed out a watch party in London took place well after midnight local time).
“You see generations of Jayhawks at these events, all excited about the university,” he said.
Matt Melvin, KU’s associate vice provost for recruitment and enrollment, said basketball comes very late in the admissions cycle to see an enrollment boost. Many students have already decided where they’re going next fall by the time the NCAA title game rolls around in April, he said.
Unlike smaller schools that suddenly and surprisingly do well in sports — like a Final Four run at George Mason or Butler — potential students know KU has a chance to contend most years, so there isn’t typically a huge spike when the team makes it far into the tournament.
“Because of KU’s position in the market, particularly in basketball, it’s not really a big surprise when the team does well,” he said.
Football can be a different story because its success come in January, much earlier in students’ decision-making process. Therefore, in 2008, the Orange Bowl title likely contributed more to KU’s record-breaking 30,102 student enrollment that fall than the NCAA basketball title, he said.
But that doesn’t mean basketball doesn’t boost KU in other ways.
“It gives you visibility,” he said.
With millions watching the title game, Melvin said, having all those people seeing Jayhawks is advertising the university just couldn’t buy.
“In order to have market share, first you have to have mind share,” he said.
In the end, a successful basketball season certainly won’t hurt.
“We’ll take it,” Melvin said.