Conference TV Contracts and Revenue

[stever20]

I wonder if there is a big jump after year 6. After the CBS portion expires where they think they might be able to resell the 2nd part of the package getting more money for Fox which would help supplement that boost.

[jfan]

Unless this is dated information (posted on HLOH a year ago), I think Mr. Brewer has butterflies floating in his brain. At this point in time does anyone really think that Butler, Nova and Georgetown (among others) are less valuable as a franchise than DePaul and St. Johns. Anyone "purchasing" these "franchises" would have to analyze current success and future potential. There are others on the list that are puzzling. I realize that this is Dayton pumping, but some of the info makes no sense. California at 34, Auburn at 43, UNLV at 46 and ASU at 50. Would anyone really "buy" these Franchises over Nova and Butler

[Bill Marsh]

Why are Fox revenues listed as $31.5 million? Is that a typo?

The contract is $500 million for 12 years, which equals $41,666,667 annually - unless it starts low and has an escalator to increase the pay out annually.

Not a typo.

- Not sure that $500 million over 12 years is accurate

- Fox paid $35 million of that upfront in 2013 as soon as the new Big East was formed, so it's really $500 million over 13 payments = $38,462,000 average per year if the $500 million is correct

- I'm sure there is an escalation clause as well

Thanks.

Any reason to think the $500 mill is not accurate? It was reported everywhere with never a hint that it might be anything else.

[BEwannabe]

Unless this is dated information (posted on HLOH a year ago), I think Mr. Brewer has butterflies floating in his brain. At this point in time does anyone really think that Butler, Nova and Georgetown (among others) are less valuable as a franchise than DePaul and St. Johns. Anyone "purchasing" these "franchises" would have to analyze current success and future potential. There are others on the list that are puzzling. I realize that this is Dayton pumping, but some of the info makes no sense. California at 34, Auburn at 43, UNLV at 46 and ASU at 50. Would anyone really "buy" these Franchises over Nova and Butler

Absolutely, they're all bigger schools with far greater chance of return. As hard as it is to admit I'm a Bengals fan and people scratch their heads when the Bengals are discussed as 1 of the more valuable franchises in all of sports and it's because they have a sweetheart stadium deal and a thrifty owner (on the latter I'm being nice). Butler would be well down my buy list and it doesn't have anything to do with the success they've enjoyed it has everything to do with the competitiveness and what kind of share they can garner in their market.

[jfan]

That's apples to oranges. We are not talking about pro teams with pro salaries with full football stadiums and all the marketing that goes with them. These are college teams. The last four teams I mentioned do not generate the fan support or basketball revenue that Butler and Nova do. They have limited BB futures based on the way things are at present. What exactly makes them more valuable. Bigger markets? Doesn't matter if no one goes to their games and they are not winning. These teams don't get individual TV contracts based on market share. While that is a component in eventual TV contracts with the leagues, for the value of a team, it doesn't matter nearly as much as a team's performance on the court. Still don't agree with the analysis.

[Fieldhouse Flyer]

I think Mr. Brewer has butterflies floating in his brain. Still don't agree with the analysis.

The value of a college basketball team is proportional to the profit it generates. Profit is the difference between revenue and expenses. It’s that simple.

How Much Is Your College-Basketball Team Worth? – The Wall Street Journal - March 31, 2016

Rank - Team • 2015 Valuation

24 - Dayton • $80,600,000
26 – Xavier • $78,100,000
35 – Marquette • $59,600,000

College Basketball's 20 Most Valuable Teams - 2016 - Forbes - March 14, 2016

17 - Dayton • 2015 Team Value: $11.9 million • 2015 Revenue: $12.0 million • 2015 Expenses: $4.8 million • 2015 Profit: $7.2 million

19 - Xavier • 2015 Team Value: $11.5 million • 2015 Revenue: $12.1 million • 2015 Expenses: $5.5 million • 2015 Profit: $6.6 million

20 - Marquette • 2015 Team Value: $11.4 million • 2015 Revenue: $15.3 million • 2015 Expenses: $9.0 million • 2015 Profit: $6.3 million

Forbes obviously uses a different valuation methodology than The Wall Street Journal, and Forbes ranks only the top 20 teams, but Forbes provides more detailed information about each team than the WSJ rankings.

The Forbes’ rankings show that both Xavier and Marquette generated more revenue than Dayton, but they also spent more money on their basketball programs than Dayton did.

Dayton had a higher valuation than Xavier and Marquette simply because Dayton had a higher profit margin on their investment in men’s basketball.
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How Much Is Your College-Basketball Team Worth? – The Wall Street Journal - March 30, 2017

In an annual study, Ryan Brewer, an assistant professor of finance at Indiana University-Purdue University Columbus, assesses what every college team would be worth on the open market if it could be bought and sold like a professional franchise. The study analyzes each program’s revenues and expenses with cash-flow adjustments, risk assessments, and growth projections.

Rank - Team • 2016 Valuation • 2015 Valuation • % Change

21 - Dayton • $88,415,000 • $80,594,000 • +9.70%
28 - Marquette • $71,918,000 • $59,623,000 • +20.60%
29 - Xavier • $70,562,000 • $78,084,000 • -9.60%

38 - Connecticut • $57,962,000 • $137,895,000 • -58.00%
47 - Villanova • $50,534,000 • $40,445,000 • +24.90%
52 - Georgetown • $47,910,000 • $42,157,000 • +13.60%
55 - St. John's • $45,213,000 • $55,036,000 • -17.80%
73 - Providence • $31,734,000 • $29,656,000 • +7.00%
74 - Creighton • $31,619,000 • $28,084,000 • +12.60%
81 - Saint Louis • $28,094,000 • $18,570,000 • +51.30%
82 - DePaul • $27,210,000 • $42,911,000 • -36.60%
85 - Seton Hall • $25,715,000 • $27,689,000 • -7.10%
92 - Butler • $22,588,000 • $20,240,000 • +11.60%

In 2016, Dayton and Marquette both became more valuable than in 2015, which simply means that their respective revenues grew at a faster rate than their expenses.

In 2016, Xavier became less valuable than in 2015, which simply means that Xavier’s expenses grew at a faster rate than their revenue. However, Xavier has a much bigger recruiting budget than Dayton, and Xavier gets commitments from much better prospects than Dayton, so the additional investment that Xavier spends on recruiting is paying big dividends in terms of Xavier’s very considerable success in men’s basketball.

[jfan]

The Forbes analysis makes more sense than WSJ. I sure would like to see the Top 100 using the Forbes method(I know it only goes to 20). I'm guessing the teams after the top 20 or so would have some dramatic differences.

[DudeAnon]

Xavier and Dayton are worth more than Georgetown, Villanova and St. John's? This must've been written in Colorado.

[Fieldhouse Flyer]

Xavier and Dayton are worth more than Georgetown, Villanova and St. John's?

Your reading comprehension is to be commended.

The Forbes analysis makes more sense than WSJ.

Neither Forbes nor the WSJ disclosed their valuation methodology, so there is no rational basis to say which list of valuations "make more sense".

A google search shows that Forbes apparently did not publish their annual College Basketball's 20 Most Valuable Teams article in 2017 (containing their 2016 team valuations), which is unfortunate, as it would have provided more numbers to compare to the WSJ’s 2016 team valuations, posted above.

I'm guessing the teams after the top 20 or so would have some dramatic differences.

Why? Forbes and the WSJ presumedly used the same raw 2015 data in their respective team valuations, and both sets of team valuations would be based on this:

The value of a college basketball team is proportional to the profit that the team generates. Profit is the difference between revenue and expenses.

Therefore, I would not expect dramatic differences in the valuation of teams after the top 20 or so.

Big East numbers are available as follows for the year ended June 30, 2015:

Revenues:
FOX Rights Fees $31,572,757
NCAA Credits 4,185,882
Conference Championships 4,399,610
Corporate Sponsorships 2,036,632
Other 440,463
Total Revenues $42,635,344

Expenses:
Payments to conference members $28,938,025
Expenses to run conference 13,556,557
Total Expenses $42,494,582

Retained by conference $140,762

2015 Payouts

Villanova $3,273,830
Xavier 3,220,709
Georgetown 3,217,909
Providence 2,977,189
Butler 2,950,070
St. John's 2,923,504
Marquette 2,703,538
DePaul 2,380,570
Seton Hall 2,377,653
Creighton 2,215,475

Total: $28,240,447

HallHoops – thank you very much for posting valuable information that I wasn’t able to find. Would you please post a link to its source?

In the quote above, I took the liberty of sorting the 2015 Payouts in descending order, and was surprised to see the big disparity between the 2015 Payouts to Villanova and Creighton ($1,058,355).

I had the (possibly mistaken) understanding that the Big East shared Fox Sports TV revenue equally among member schools, and shared NCAA Tournament unit revenue equally among member schools. Can anyone shed more light on this?

[ChicagoX]

It appears that these lengthy copy-and-paste posts were done for one reason and one reason only, and that is to pimp Dayton's resume for an invitation to the Big East that isn't coming. Can we just start a thread for the Dayton and VCU fans to promote their schools instead of having to deal with the annoying posts from these out-of-conference schools' fans? Let them have their own little circle-jerk while the rest of us talk Big East basketball.