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Score! Gonzaga University was struggling financially. Then it started winning basketball games.

March 14, 2004View for printing

The crowds at Gonzaga University pack a lot more than the basketball gym these days.

The dorms are so full that the school puts scores of undergraduates up at the Red Lion River Inn for the entire school year. The university even bought the local bowling alley, so it would have the option of knocking it down to build more housing on the site. Some students have trouble getting into the classes they want.

By RON LIEBER Staff Reporter of THE WALL STREET JOURNAL

http://www.wsj.com

Why the growing pains? Some credit -- or blame it on -- basketball. Ever since the men's basketball team began scoring big in the NCAA basketball tournament, the university has seen rapid growth in applications, enrollment and donations.

A total of 3,713 students applied to be in the 2003-04 freshman class, more than double the 1997-98 numbers. The current freshman class started with 908 people, up 65% from 550 six years ago. The donations have come in even faster. In the year ended May 31, 1997, the school raised $8.4 million from alumni and foundations. In the 1999-2000 fiscal year -- which started just months after the basketball team came within minutes of making the NCAA tournament's Final Four -- Gonzaga took in $16.5 million.

The ensuing booms in building and faculty hiring, however, are still catching up to the torrent of interest in the Jesuit school, which sits a mile northeast of downtown Spokane, Wash. As a result, many juniors and seniors have learned a few extracurricular lessons about the challenges of managing success.

"It's ironic how the main things that drew me here were basketball and small classes," says Matt Scheelar, a senior from Salem, Ore. Four years later, one of his classes is held in a crowded, stuffy room, and he has trouble getting tickets to the games.

What's happening at Gonzaga appears to be the latest episode of what's come to be known as the Flutie Effect. It's named for Doug Flutie, the Boston College quarterback who threw a miraculous last-minute pass in 1984 that beat the University of Miami. His supposed effect was to boost applications for admission to the school from students who saw the game or highlights on television.

A Matter of Faith

Experience shows, though, that nobody -- even at Gonzaga -- can measure with any certainty the effect a higher athletic profile has on a school's ability to draw students. Too many other factors are involved in people's decisions about which school to attend. So, for school administrators, the value of a prominent athletic program is more a matter of faith than facts.

In the spring 2003 issue of Boston College Magazine, communications staffer Bill McDonald surveyed researchers at the school and essentially concluded that the Flutie Effect was an urban myth. Boston College did get more applications in the mid-1980s than it had before, but it saw similar growth after lousy years on the gridiron.

At Valparaiso, which had its first unexpected NCAA basketball tournament run in 1998, there is similar uncertainty over how to account for the school's overall growth. Interest in the school surged after the tournament, but then fell back a bit from the highs. "We find it difficult to directly link enrollment and fund-raising results with our success in the NCAA basketball tournament," says Reggie Syrcle, the school's executive director of university relations, in Valparaiso, Ind. The Tournament Effect?

Fund raising, applications, enrollment and test scores have all picked up since Gonzaga became a regular in the men's tournament

School Year Round Reached in NCAA Tournament Fund Raising (in millions)* Applicants for That Year's Freshman Class Freshman Enrollment Avg. Freshman SAT Scores 1997-1998 Did not play $9.70 1,705 550 1151 1998-1999 Fourth round $13.40 1,841 569 1159 1999-2000 Third round $16.50 2,069 701 1152 2000-2001 Third round $10.90 2,741 796 1164 2001-2002 First round $10.10 3,047 971 1168 2002-2003 Second round $14.00 3,338 907 1172 2003-2004 N.A. N.A. 3,713 908 1182

*From alumni and foundations, June 1-May 31 fiscal years

Source: Gonzaga University

But schools do believe they can be helped by basketball -- and Gonzaga may in fact be a prime example. As recently as 1998, when Gonzaga was struggling financially, a small number of faculty members suggested abandoning Division I basketball, the top level of college competition. The school's athletic director, Mike Roth, led the charge to maintain the status quo.

"You have the opportunity within Division I athletics to get tremendous national notoriety," Mr. Roth says, explaining the case he made to the administrators six years ago. "People outside a school's community can't tell you who won the Division III national championship in any sport."

People at Gonzaga had no experience to draw on to assess Mr. Roth's assertions, since the school's most successful team during the previous two decades had been the one that competed in debate tournaments. But everything changed instantly after the 1998-99 season, when the Bulldogs reeled off three straight upsets in the NCAA tournament before losing in the quarterfinals. And it didn't end there: In each of the next two tournaments, the team won two games to make it to the Sweet Sixteen, the step before the quarterfinals and a benchmark of success in college basketball. Last year, Gonzaga bowed out in the second round of the tournament in a double-overtime loss to Arizona, which has about seven times as many undergraduates. (This year's team enters the tournament on a 20-game winning streak and was ranked No. 3 nationally in last week's polls, the school's highest ranking ever.)

This string of success makes Gonzaga different from schools like Boston College or Valparaiso, for Gonzaga has managed to win consistently in the postseason and continue to attract attention ever since its first Cinderella march to the brink of the Final Four. There are still those, however, who question how many students that attention has actually drawn the school.

One thing that's certain is that Gonzaga sees little direct, immediate financial gain from all this tournament success.

Teams that do well in the competition receive no money directly from the National Collegiate Athletic Association. Instead, the association shares revenue with the conference in which the team plays. These leagues will earn about $152,000 for each round that a member team makes in the 2004 tournament, and will continue to receive at least that much annually for a period of six years. Gonzaga alone is responsible for about $1.8 million flowing into the West Coast Conference coffers this season. Conferences vary in what they do with the cash, but some keep the majority of it for their general operating budgets. The WCC hands off $20,000 to teams that make the NCAA tournament, and increasing amounts for each round that a team advances.

Free TV

Gonzaga earns nothing when its regular-season games appear on television, though that may soon change. This season, ESPN carried a couple of Gonzaga's games against WCC opponents, but the cable network pays the conference, not the schools, for the rights to broadcast such games. Most of the rest of the team's home games appear on a local station in Spokane, but the school didn't ask the station to pay for the broadcast rights.

Even without rights fees, though, the local broadcasts have paid off, says Chuck Murphy, the university's vice president of finance. "Obviously, we'd like to make a buck on it, but it's been great for the university and its visibility to have so many games on television." The school hopes to land a regional contract soon that would bring in some broadcast-rights fees and allow home games to appear on stations across the Pacific Northwest, where Gonzaga alumni are concentrated.

Meanwhile, the athletic department's budget has been expanded, thanks to the team's success, though the only line item that has taken a quantum leap is the one for Coach Mark Few's salary. The school acknowledges the jump but won't disclose what the coach makes.

There's also now a bit more room in the basketball budget for a few long-distance recruiting trips. One of the Bulldogs' current starting forwards, Ronny Turiaf, from Martinique, is someone the team couldn't have afforded to pursue aggressively 10 years ago.

Still Frugal

"We still count every dime, though," says Mr. Roth. "There are very few schools in the country where the athletic program as a whole is a net moneymaker for the institution." And Gonzaga is not one of them.

While the university at large appears to have gained in other ways from the basketball team's success, it's never easy to quantify just how much basketball itself has contributed. For instance, while the basketball team was busy running off 20-win seasons during much of the past decade, the university also hired the Rev. Robert Spitzer to be its president. By all accounts, his overall performance and skill as a public speaker and schmoozer, as well as strategic planner, have contributed to the school's rise in stature.

Gonzaga has also had demographics working in its favor. All of the Spokane-area schools have seen a jump in applications as the children of baby boomers have graduated from high school. Plus, Gonzaga has overhauled its financial-aid packages in recent years in an attempt to attract and reward high-achieving students in addition to those who simply couldn't afford to pay the full freight. Now, more than 90% of the undergraduates get some help paying the $25,000 or so in tuition, room and board costs.

Father Spitzer himself, however, believes that basketball deserves a large share of the credit for Gonzaga's growth. Take enrollment, for instance. "Without trying to get too precise, because we don't have the quantitative data to support it, you'd have to say that certainly well over 50% of the application rise" is due to public relations, he says. "And that PR is attributable in great part to basketball."

Once the initial wave of students turned up on campus, however, Father Spitzer believes another phenomenon came into effect that had nothing to do with basketball. "Natural momentum is what I would call it," he says. "More students come, they're satisfied, they go down to talk to their buddies who are high-school seniors, the younger brother hears it from his older sister, and students sell it to students."

In fact, many members of the Gonzaga community are reluctant to give basketball too much credit for the university's growth. "I love the community that basketball builds, but I don't think people come because of basketball," says Billy Itule, a junior from Paradise Valley, Ariz., who helps run the student group that markets the school to prospective students. "They might recognize our name because of the team, but then they realize all of the other great things we have here, like all of the amazing people."

Whatever their motivation, the flood of students is challenging the school's infrastructure. Senior Marissa Schneider, a public-relations and advertising major from Prosser, Wash., wasn't able to register for her classes online for several straight semesters because they were full. "It's just part of going to school" at Gonzaga, she says, adding that she had to slip onto class lists during the drop/add period at the beginning of the semester or lobby professors individually. Meanwhile, the average class size has risen to 21 from 15 in the fall of 1996.

Dealing With Success

Stephen Freedman, the academic vice president, doesn't want students to become resigned to such difficulties. "Their concerns are real, and they're being taken seriously," he says. "But I don't look at it as a long-term problem. I see it as an effect of success." To help address the issue, the university is hiring 11 full-time tenure-track professors this year alone. It also is now adamant about not letting the freshman class get much bigger than 950 students each year.

If students can't get seats to see basketball games, however, it could put a crimp in recruiting. They don't pay for tickets, but students now must line up each Sunday to get seats for the following week's games. Some queue up for more than 10 hours to get seats in the lower tier of the bleachers.

Starting next season, the Bulldogs will play in a new arena that will hold at least 6,000 people. Major gifts covered the majority of the building costs. "Before the team's success, could we have gone out to raise $23 million to build a new arena? The answer is no. Absolutely no way," says Father Spitzer.

Students will continue to sit courtside and pay nothing for the privilege. Plus, their allotment of seats will rise to 1,500 per game from the current 1,000. The lines, however, will remain, since the department refuses to switch to a lottery system to distribute the prized seats. "Students are our most important fans," says Mr. Roth, the athletic director. "We want those that are most dedicated to be rewarded."

-- Mr. Lieber is a staff reporter in The Wall Street Journal's New York bureau.

Write to Ron Lieber at ron.lieber@wsj.com

Copyright © 2004 Dow Jones & Company, Inc. All Rights Reserved
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Reprinted under the Fair Use doctrine of international copyright law. Full copyright retained by the original publication. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.


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