SPOKANE, WASHINGTON – MARCH 22: John Poulakidas #4 of the Yale Bulldogs is showered by teammates in the locker room after a 78-76 victory against the Auburn Tigers in the first round of the NCAA Men’s Basketball Tournament at Spokane Veterans Memorial Arena on March 22, 2024 in Spokane, Washington. (Photo by Steph Chambers/Getty Images)
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Wall Street likes to think it hires talent. Grades matter, degrees matter, interviews matter, and eventually performance decides who survives. But research covering more than 120,000 Ivy League graduates suggests another credential may carry unusual weight before a young applicant has proved anything professionally: the team they once played for. Having one additional former teammate at a firm was associated with a 193.7% increase in the probability that an athlete joined that employer. That makes this more than a story about college sports. It tells us something about how Wall Street decides whom to trust.
It would be easy to read the story as another example of networks mattering. There is more to it. What interests me is how quickly familiarity can become a credential. Previous research suggests Ivy League athletes have produced strong career outcomes, so there are compelling reasons employers may value them. The harder question is whether an organization becomes better at finding talent when a particular background keeps working or simply better at finding the kind of talent it already recognizes.
Investors make the same mistake when they attach too much importance to the characteristics of previous winners. Once a pattern works often enough, repeating it starts to look like discipline. Occasionally it is. Occasionally the pattern has simply become embedded.
Wall Street’s 194% Signal Is Bigger Than A Resume
The National Bureau of Economic Research study by Paul Gompers, George Hu, Will Levinson, and Sachin Srivastava examined the first jobs of 120,306 Ivy League graduates between 1950 and 2020, including 5,658 intercollegiate athletes.
Having an employee who played the same sport at another Ivy League school increased the probability of an athlete joining by 16.4%. One additional former teammate from the same university and sport increased it by 193.7%.
The research becomes more interesting when the personal relationship disappears. Older alumni from the same college team, including people who may have finished playing years before the younger athlete arrived, were associated with a 171.9% increase in the probability of joining the same employer. That is harder to explain simply as one friend helping another.
There are sensible reasons employers might value it. Competitive sport teaches people to deal with pressure, losing, repetition, goals and responsibility to others. Previous research on Ivy League athletes has also found stronger long-term career outcomes, including higher cumulative earnings and greater progression into senior corporate roles.
I understand that personally. I played semi-professional soccer, and I have always carried that competitive drive into business and markets. Sport teaches you quickly that talent gets you only so far. You have to turn up, take losing personally without letting it break you, work out what went wrong, and go again. I can understand why an employer would value that.
My concern is what happens when the signal becomes so established that nobody bothers separating it from the qualities it was supposed to represent.
Why Wall Street Keeps Repeating A Winning Profile
Hiring is another form of capital allocation. A bank cannot know exactly how a 22-year-old analyst will perform. It has thousands of candidates, incomplete information, and a real cost when it repeatedly makes the wrong decision. So it seeks evidence. University, grades, internships, and recommendations all reduce uncertainty. Athletic achievement can reasonably do the same.
If several athletes from one program enter a firm and perform well, the next candidate from that background has an advantage before the interview starts. Someone inside the organization has already seen this profile succeed.
Over time, that process can reinforce itself. Former athletes become senior employees. They understand what competitive sport demands and may recognize those characteristics more easily in younger candidates. More athletes enter the firm, some perform extremely well, and the evidence appears to validate the original preference.
None of this requires anyone consciously favoring athletes. Most people may simply be repeating something that has worked before. That is why I see the Wall Street numbers as an allocation story rather than simply a networking story. Individually sensible decisions can accumulate into a system that nobody deliberately designed. A company repeatedly hiring a profile that has produced good employees may be acting rationally while gradually narrowing the type of talent it knows how to identify.
Wall Street’s Hiring Edge Can Become A Blind Spot
Ivy League athletes represented roughly 5% of graduates in the study but accounted for 7.08% of first jobs in finance. Morgan Stanley and Bank of America were among the firms with particularly high athlete representation, while Goldman Sachs and JPMorgan were major destinations for Ivy League graduates more broadly. That does not mean anyone is hiring badly. The athletes may be excellent hires.
Markets offer a useful parallel. Investors discover a factor associated with superior returns. Capital follows it. The factor continues working, which attracts still more capital. Eventually the historical return itself becomes the justification, and fewer people ask why it worked in the first place.
I make a living searching for patterns. Spinoffs, insider buying, management incentives, and capital allocation often repeat in surprisingly familiar ways. But a pattern is useful only if you keep asking why it exists.
Athletes may perform well because sport creates valuable human capital. Networks may transmit useful information. Employers may also use athletic history as shorthand for qualities that are difficult to identify in an interview. Once enough athletes have succeeded inside an organization, belonging to that network may itself increase the opportunity to prove those qualities.
The Talent The System Never Sees
I would not ask whether the athletes getting hired deserve their jobs. There is no evidence here that they do not. I would ask what happens to equally capable people who never produce the same signal.
Investing has false negatives too. Companies are screened out because they are complicated, too small, temporarily unpopular or simply do not fit the mandate of the natural shareholder. Occasionally that is precisely where the opportunity sits. The asset is not necessarily worse. Fewer people are prepared to look at it.
A hiring system built around proven signals will become very effective at identifying people who possess them. Someone outside the pattern requires more work. Their background needs explaining, and there is less internal precedent for what success looks like. That additional uncertainty may be enough to keep a capable person outside the funnel.
Businesses allocate financial capital every day, but they also allocate opportunity. Companies that recognize capable people before everyone else should have an advantage, just as investors do when they identify assets the market has overlooked.
Wall Street has spent decades looking for small differences between price and value. It is worth bringing some of that skepticism to hiring. I know from playing semi-professional soccer how much sport can shape competitiveness, resilience, and the ability to keep going after a loss. I can see exactly why employers value it. But a 194% effect is too large to dismiss as character alone. The network is doing something too, and the more compelling question is how much talent Wall Street never gets to see.
