Why Deion Sanders' $30 million contract is a bargain for Colorado

When the University of Colorado announced its decision to hire Deion Sanders as its next head football coach, there was no shortage of critics. Sanders’ only college coaching experience was a three-year stop at Jackson State University. His loud, no-nonsense approach led to an unprecedented 50+ players leaving the program within his first few months on the job. And Colorado was on the hook for his five-year, $29.5 million contract — the richest contract in school history — no matter how he performed.

In fact, the move was such a risk that Colorado didn’t even have the money to pay Sanders, with the school’s athletic director telling reporters he “wasn’t worried about it” but now needed to go out and raise the money from alumni and boosters.

However, they did exactly that, and less than two years after Sanders’ introductory news conference, everything has changed. There are still critics, of course. But Sanders has taken a team that won just one game the year before his arrival and turned it into a legitimate Big 12 title contender this season.

Colorado is 6-2 on the season, making the Buffs bowl eligible for the first time in nearly a decade. The team is also ranked No. 21 in the latest AP Top 25 college football poll, and wide receiver and defensive back extraordinaire Travis Hunter is one of the favorites to win this year’s Heisman Trophy.

The combination of this success intertwined with Deion’s personality has brought the school more attention than it could have ever imagined. Colorado’s online team store sales were up 2,544% last year. The school’s social media accounts have added more than a million followers over the past two years, and the Buffaloes played in five of college football’s top 25 most-watched games last year, selling out every single home game.

This alone justifies Sanders’ five-year, $29.5 million contract — and the deal even starts to look like a bargain when you consider the downstream impact.

You’ve probably heard that athletics are the front door to a university. The idea behind that phrase is that athletic success drives everything else, with increased exposure leading to more interest, more interest leading to more applications, more applications leading to more students, more students leading to higher tuition costs and, eventually, higher academic standards and an increase in revenue for the school.

This is known as the “Flutie Effect.” It started in 1984 when Boston College quarterback Doug Flutie successfully threw a Hail Mary on national television to beat the University of Miami. Boston College then saw a 20% jump in applications over the subsequent years, and there have been countless examples since.

Butler, for instance, saw a 40% increase in applications after their men’s basketball team reached the national championship game in 2010. Applications at Florida Gulf Coast jumped 27% after advancing to the NCAA Sweet 16 as a No. 15 seed in 2013, and the University of Alabama’s enrollment increased from 25,000 to 60,000 while Nick Saban was coach.

The Flutie Effect often takes a few years to play out. However, Colorado has expedited this process by averaging 7.2 million viewers during its prime-time games last year.

As a result, the Boulder-based school received a record 68,000 applicants for fall 2024, a 20% increase from 2023. The school ended up extending offers to 51,000 students, and enrollment increased 3.4% year-over-year, from 37,153 in 2023 to 38,428 in 2024.

The typical counterargument to the Flutie Effect is that the impact is minor because schools have a limit on how many students they can accept. That’s technically true, but the problem with that thought process is that it discounts other things, like how heightened demand enables the school to raise academic standards, and, more importantly, the fact that some students are more financially valuable than others.

Take the University of Alabama, for example. Not only did enrollment increase from 25,000 students when Nick Saban arrived to 60,000 students when he retired, but the Crimson Tide have also fundamentally changed the composition of their student body.

Before Saban, the University of Alabama had three times more in-state students than out-of-state students. But today, that ratio has flipped, and Alabama’s student body now consists primarily of out-of-state students. It is an important distinction because those out-of-state students pay three times more in tuition than in-state students — $34,000 vs. $12,000 annually — which has helped Alabama collect billions in additional tuition.

Colorado still has a long way to go before it can be included in the same conversation as Alabama, but the same rules apply. Colorado’s out-of-state students pay $43,600 in tuition compared to $14,000 for in-state students. And given that the school doesn’t have the infrastructure to add an additional 20,000 students, you can almost guarantee that Colorado’s admissions staff will start placing a premium on out-of-state students.

That will eventually make Deion Sanders’ expensive contract look like one of the biggest bargains in sports. Now, the school needs to ensure Sanders doesn’t leave for a bigger program by giving him all the resources he needs to compete at the highest level.