The Indicator from Planet Money
The Indicator from Planet Money

Is investing in sports worth it for universities?

September 30, 2026

AI Summary

5 min read

The night Boston College beat the University of Miami in 1984, a young Doug Chung watched the game on TV with his father and was blown away. The quarterback, Doug Flutie, launched a Hail Mary pass that traveled over sixty yards for a walk-off touchdown. It was a magical moment to associate with a school. Years later, Chung—now a researcher at Harvard Business School—would try to find out exactly how much that kind of magic matters for a university’s bottom line. His answer: a big win functions like a commercial. It creates a stock of goodwill that can drive more applications, especially from students with lower SAT scores. But as with so many things in economics, the story is not that simple.

The advertising effect of a championship

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What you'll learn

  • 1 (00:06) **Introduction: Sports as a University Advertisement** - Hosts Ricky Mulvey and Adrian Ma set up the episode's central question: can a winning football team actually influence where students choose to go to college, especially as universities face a demographic decline in prospective students.
  • 2 (02:32) **The Origin of the Flutie Effect** - Researcher Doug Chung describes witnessing the 1984 Boston College vs. Miami game, where a last-second Hail Mary pass by Doug Flutie won the game and created a legendary moment for the university.
  • 3 (04:57) **The Economic Mechanism: Who is Most Affected?** - Doug Chung's research quantifies the Flutie Effect, revealing that students with lower-than-average SAT scores show a stronger preference for schools with high athletic success.
  • 4 (05:33) **Evidence and Dispute: Is the Effect Real?** - The hosts present both supporting and conflicting evidence for the Flutie Effect, noting that the University of Cincinnati saw a 20% enrollment increase after a playoff run, but this coincided with a test-optional policy and a post-COVID rebound.
  • 5 (06:20) **Case Study: Indiana University's National Championship** - Jonathan Coffington, Indiana University's chief communications officer, discusses the school's unexpected national championship win and its impact on the university's brand.
  • 6 (07:42) **The Economic Trade-off: Is Investing in Athletics Worth It?** - The hosts pivot to the core economic question for universities: does the advertising effect of sports justify the massive investment required?
  • 7 (08:58) **Rutgers: A Case of High Spending, Low Return** - An investigation by NJ.com reveals that Rutgers' athletics spending has resulted in a massive financial deficit since joining the Big Ten, while application increases are primarily due to joining the Common App, not sports success.

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Show Notes

Universities spend millions of dollars every year on their athletics programs. But does that investment pay off? Today, we interrogate the “Doug Flutie Effect.” 

Fact checking by Cooper Katz McKim.

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