College football programs as stocks — who are you buying?  Selling?  Recruiting mail bag

College football programs as stocks — who are you buying? Selling? Recruiting mail bag

Recruiting never stops. Neither do your questions.

And if we didn’t get to your question, don’t be discouraged! We will be addressing some on “Stars Matter,” our weekly recruiting podcast, which can be found on the feed of “The Andy Staples Show.” Look for new episodes every Thursday morning.

(Note: Submitted questions have been edited for clarity and length.)

If you think of college football programs as stocks — not just for this year, but for the next 2-5 years — what programs are you buying and selling? — Mark C.

My face lit up when I read this question, not only because a large portion of my free time is spent reading about investing but also because this is exactly how I view recruiting. If you look at recruiting classes as a company’s quarterly earnings report, you can get a really nice look at where things are headed. Now in this new age of college football roster construction, a program’s view on NIL and the transfer portal can serve as earnings reports. You read the earnings reports and decide whether you want to invest your hard-earned money into that entity.

Here are a few programs that came to mind.

Notre Dame — Buy: I view Notre Dame as an established income stock that you can count on to consistently perform. Let’s say Notre Dame is Coca-Cola. It has been around forever, it is engrained into the fabric of college football and you know what you’re going to get. But with Marcus Freeman at the helm now, there is a chance for Notre Dame to take the step that most of us have written off as impossible. Freeman is about to sign one of the best classes in Notre Dame history and is doing it in a youthful and different way. If Notre Dame can sign a top-five class — and I am predicting it is going to happen in the next few years — this is a stock you’re going to want in your portfolio.

Clemson — Sell: Clemson is Facebook—er, Meta—to me. It was once one of the most reliable companies in investing, but things seem a little dicey right now. Facebook has plummeted in recent months because it showed a decline in its new users for the first time in company history. And as it transformed to Meta, the earnings report call seemed to lack the type of direction you’d expect from a company that is trying to change the world through the metaverse. Does that not sound like Clemson? The Tigers were once on top of the world, but when you hear how Dabo Swinney speaks about NIL and the transfer portal, are you really going to buy that stock? Like Meta, maybe Clemson will be successful in the long run. It has a history of innovation and success. But in reality, you’re probably more comfortable moving your money into a different security.

Ohio State—Buy: Ohio State is an SP 500 ETF. I buy some with every paycheck because it’s something I want to hold until I’m retired. It may not outperform some of the sexiest stocks on an annual basis, but sometimes it will — much like when the Buckeyes win the national title. At the very least, you know it’s going to be in the College Football Playoff discussion. Even the bad years are good years for returns given the Buckeyes have had only one losing season in the last 20 years. Over time — through the good years and the bad years — it’s going to prop up your portfolio, regardless of who the coach is. In 30 years, you know the Buckeyes are still going to be there. They are a program that has never slipped into a prolonged era of mediocrity.

USC—Hold: If this question was asked right after the Lincoln Riley hire, I’d have told you to buy. But now Riley’s presence—along with Caleb Williams—has the Trojans overpriced. If you have it, hold. If you don’t, this isn’t where you want to buy in. USC is priced as though it has already been to the College Football Playoff. It reminds me of Tesla. You expect good things to come from it long-term, and in theory, it could change the world, but the stock price is reflected on hypothetical future innovation and not what the company is actually doing right now. Tesla is a technology company that is using our driving patterns to create autonomous driving? Great. But right now, all I see is a car company that is struggling with infrastructure and deliveries. Is it an $800 billion company? It has $3 million in market cap per vehicle sold. Ford has about $37,000. Does that seem right? Maybe one day it will. But I’m not buying it right now at those levels. If you got in early and believe with all of your heart it is going to change the world, great. Hold it and hope you’re right, much like I am with USC.

Georgia — Buy: Georgia is Apple. It is the best company in the world. It prints money and is going to be here for the long term.

Alabama — Buy: Alabama is Amazon. Things have taken quite the hit in recent months, but are you really concerned about things bouncing back? Nick Saban lost the national title and made some comments about Texas A&M that he probably shouldn’t have. Amazon is down big due to worries of inflation and the current economic uncertainties. But are you really not going to buy Amazon when things are bad?

Michigan State — Sell: Michigan State is Target. It’s a reliable shopping place and an integral part of everyone’s Saturday, but the company just missed its Q1 estimates because of negative cash flow, which can be attributed to the current state of the economy and supply chain issues. The CEO also miscalculated the rise in costs, which hit the company’s stock price hard. Sounds a lot like paying a coach $95 million dollars after one solid season. There are concerns with finances and what that means for expectations of performance. Get me out of here.

Tennessee—Good luck. Want a stock that is volatile as hell and has a ton of public interest? Do you like gambling with an equal chance of hitting it big and losing 30 percent in a day? Then Tennessee—GameStop! — is for you. There is nothing more volatile in the market right now, but there also aren’t a lot of stocks that are this fun to track. Tennessee is in an interesting situation right now as it leads the NIL charge. Will it work out? Your temperament as an investor will determine whether you think this is a good buy.

Rank the reasons prospects decommit from a school. As an outside observer and fan, mine would go something like:

1. Coach position changes
2. Head coach changes
3. NIL opportunity elsewhere
4. Change in players committing or decommitting to the school or new school

Interested in seeing if people closer to the process think differently. —Andy J.

I think you’re probably on the money with the first two reasons. There is no greater prompt for a change of heart than a change of circumstance at the school, whether it be a coaching change, NCAA sanctions or whatever else you can come up with that changes the paradigm of what that program is.

There are a few I think you are missing, too. The first one that came to my mind was when a player receives an offer from a bigger, more prestigious program. It happens often. An under-evaluated player gets early attention from a middle-tier school, commits early in the process, earns a bunch of offers from national title contenders and flips late. Also, you have to take into account that not every decommitment is the player’s decision. Schools move on from scholarship offers all the time, which is why you’ll sometimes see a player decommit from a top-level school and later sign with a school way down the food chain. It’s an unfortunate part of the game, but it happens.

I’m very curious how NIL is going to rise up the ranks. Right now, I’d have it toward the bottom. In five years? Maybe that’ll be No. 1. Here’s how I’d rank them:

1. Coaching changes.
2. More prestigious offer comes in
3. School moves on from recruit
4. Change in players committing at old or new school
5. NIL opportunity elsewhere

How great would it have been if Nick Saban had responded to Jimbo’s press conference by using it as a negative recruiting tool against Texas A&M? He could have said, “You just heard Jimbo state very clearly that they don’t pay their players at A&M, so why would anybody wanna go there?” — Blake P.

It’s funny you asked this question because I had the same exact thought during Fisher’s news conference last week. But mine was the opposite.

What if Jimbo would’ve just said, “You’re right, we bought every single player in our recruiting class, Nick. Your program is clearly behind in that regard. And to the recruits out there considering Texas A&M and Alabama: If you want to be appropriately and fairly compensated for your talent, our DMs are open.” That would have been the best troll of all time.

What’s interesting is how much coaches are denying NIL plays a factor. Maybe it is out of caution because it isn’t clear what the NCAA might have to say about this in the future (though I’m not sure you can go back in time and penalize schools for operating in the gray area for vague and unenforceable rules). Or maybe it is because we’ve all been conditioned that players receiving money of any kind is the devil’s work.

But why are we even hiding it? Because of the induction rule? It’s impossible to prove the driving factor for someone’s commitment — even if everyone knows it’s for the money. If I were a coach and my program was kicking ass in NIL, I’d flaunt that. I’d want every recruit in America to know that my country program. Money talks. Let it talk.

Do you expect the transfer portal to lead to top talent being distributed among a greater number of teams, evening a playing field that has been lopsided for many years due to a few teams having a disproportionate amount of recruiting success? Conversely, might the transfer portal lead to worse chemistry amongst CFB teams, leading to a lower quality of play across the board? —Taylor R.

On the surface, you’d think that the presence of the transfer portal would result in talent being more evenly distributed across the board. All of those players stuck behind stars at Alabama, Georgia, Clemson and Ohio State now have the opportunity to leave and become eligible immediately. That’s probably a rational expectation.

But I also view the other side of the coin, especially now that the transfer portal coincides with the dawn of the NIL era. I use Jordan Addison as an example. He was a top-300 prospect in the 2020 class who wound up at Pittsburgh and won the Biletnikoff Award there. And instead of staying with the Panthers, he entered the transfer portal as a star and opted to go to USC. What I fear is that the recruiting gems who wind up at middle-tier programs will run to the powerhouses chasing fame and NIL riches. Is that good for the sport?

I’d say that’s the scariest thing about the direction of college football. In the old days, stars stayed at their schools, and it was the older players who couldn’t see the field who left. Now stars are leaving for bigger programs with more notoriety? Yikes.

Truth be told, it’ll probably land somewhere in the middle. Talent will be more dispersed, sure, but I also wonder if the top programs will have an even bigger advantage in the talent department. Can both be true at the same time? When Addison goes to USC, does that mean a former top-level receiver commit on the Trojans roster will transfer to Oregon State? Maybe that’ll be the order of things, but I don’t, by any stretch of the imagination, think that all of a sudden the CFP picture is going to be more unpredictable as a result of the portal.

As for team chemistry, I’m not sure I’d buy that’s a problem. Don’t get me wrong, there will be plenty of locker room talk about who is making what financially, but college football has always been a sport of immense roster turnover. Every year, coaches go into the spring and fall as though they are molding together an entirely new team. That’ll become even more true now, but I don’t anticipate the quality of the game dropping.

(Photo of Hendon Hooker(Kevin Langley/Icon Sportswire via Getty Images)

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