Wednesday, January 16, 2008

Value Rankings of College Sports Teams

Forbes has ranked the top 20 most valuable college basketball and college football programs in the country (neither article has a concise 1-20 list, so you have to click through the in-pictures link to get your teams, though ESPN has the basketball rankings here), based on:
We base our valuations on what the basketball [football] programs contribute to four important beneficiaries: their university (money generated by basketball that goes to the institution for academic purposes, including scholarship payments for basketball players); athletic department (the net profit generated by the basketball program retained by the department); conference (the distribution of tournament revenue); and local communities (incremental spending by visitors to the county during the regular season that's attributable to the program).

An intriguing concept. The most valuable basketball team belongs to UNC-Chapel Hill ($26 million), based largely on an agreement with Nike, and football's most valuable to Notre Dame ($101 million), based largely on a TV contract with NBC. Football has a sizable advantage over basketball, and Notre Dame, while having a unique contract, is by no means an outlier-- #2 Texas ($92 million) and #3 Georgia ($90 million) are right behind. (Georgia surprised me.) In fact, #20 on the football list, Wisconsin, is still a good deal ahead of the top basketball school at $43 million.

More successful college teams make more money, both from being on TV more and getting richer payouts from better bowls (though conference tie-ins on both margins tend to create some grouping), but the correlation isn't perfect. Heritage, i.e. success in the past, plays a large role as well.

Why not sell these and let them be run for profit? Is there any illusion left that these are university funded programs provided for the benefit of the student-athelete?