Economists think 5-star college football recruits could be worth $150K annually

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Previous studies have examined the benefits of highly rated recruiting classes in college football and have found that higher rated recruiting classes are related to greater success on –the- field. Teams with strong traditions usually recruit better players and this implies that the relationship between recruit quality and on the field success may be over-stated. We analyze the effect of recruit quality on team performance with school fixed effects. Using data collected from recruiting services, we obtain the number of individual recruits by ex ante star rating for every Football Bowl Division (FBS) school for the years 2002 to 2012.

We also record team performance in the regular season, conference success and post season during the same time period. We find that controlling for between school heterogeneity lowers the estimated effect of recruit quality on wins, but the effect is still statistically and economically significant. In addition, we find that recruit quality is an important determinant for the probability of an appearance in the most lucrative bowl games. Our estimates imply that a 5-star recruit is worth more than $150,000 in expected BCS bowl proceeds to an individual school.

"We expected to see diminished effects after running the regressions, but we found that recruiting is still statistically significant, and has profound effects on a school-by-school basis," Bergman said.

And the $150,000 number could actually be much higher.

"Our research suggests some of these five-star recruits could be worth more than $500,000 a year to a program," Bergman said, accounting for the Playoff era’s increased television revenues

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