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What is a Blue Chip Recruit Worth? Estimating the Marginal Revenue Product of College Football Quarterbacks

Peter Hunsberger () and Seth Gitter ()
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Peter Hunsberger: Johns Hopkins University

No 2014-03, Working Papers from Towson University, Department of Economics

Abstract: A recent National Labor Relations Board ruling declared Northwestern football players employees and gave them the right to unionize. This ruling is part of ongoing scrutiny of The National Collegiate Athletic Association (NCAA's) model which labels college athletes as amateurs and limits player compensation to grant-in-aid (scholarships). Our paper estimates the marginal revenue product (MRP) of an elite college quarterback using revenue and game level playing data from eight and nine seasons, respectively. Similar to previous studies we show that MRP for elite quarterbacks far exceeds the average value of a scholarship. Our paper also provides two contributions by using a new quarterback rating system and creating an estimate of the expected value of a blue chip college quarterback recruit. The new system is the Total Quarterback Rating (QBR), a metric developed by the Stats & Information Group of ESPN. The measure has a strong win predictive ability and makes important adjustments to identify the quarterback's contribution. We find a one standard deviation increase in QBR adds about 3 wins per season, and each additional win increases a school's football revenue roughly $740,000 compared to the average quarterback, holding a variety of other determining factors constant, including school fixed effects. This suggests a superior quarterback to be worth millions of dollars a season. Teams recruit quarterbacks, however, ex-ante of the player revealing their college ability. Therefore, to estimate the value of a college recruit, we test for differences between quarterbacks rated as blue chip high school prospects and other QBs. We estimate that signing a blue chip quarterback is expected to produce roughly $429,000 dollars in total additional revenue for a college team compared to signing a non-blue chip quarterback. The results show that ex-post estimates of college player value may differ from ex-ante estimates due to the difficulty of predicting which high school players will excel in college.

Keywords: College Football; College Sports Revenue; Quarterback. (search for similar items in EconPapers)
JEL-codes: L83 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-spo
Date: 2014-04, Revised 2014-04
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http://webapps.towson.edu/cbe/economics/workingpapers/2014-03.pdf First version, 2014 (application/pdf)

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Journal Article: What is a Blue Chip Recruit Worth? Estimating the Marginal Revenue Product of College Football Quarterbacks (2015) Downloads
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