College Football's 20 Most Valuable Teams (ND#2) (Michigan #11)
College Football's 20 Most Valuable Teams
http://www.forbes.com/2009/12/22/most-vaulable-college-football-teams-b…
Notre Dame - Rank #2
Team Value: $108 million
Profit: $38 million
Next closest Big Ten team - Rank #3
Team Value: $99 million
Profit: $50 million
Note: BCS conferences counts all sports when they report revenue and do not separate out their football program, Notre Dame only counts football. When adjusted to count only football generated revenue (Gate, TV, Bowls) Notre Dame tops the list above anyone else.
Question: Can someone please explain (or provide a link from a previous thread) that explains how ND would make money by joining the Big Ten or what they stand to gain?
I'm confused, how does Forbes calculate the team value? most of the teams have a profit of 40-50 million a year and their total value is around double that number. That doesn't make sense.
March 12th, 2010 at 10:01 PM ^
From the article:
The Texas Athletic Department has built a brand that would make most National Football League team owners blush. Of the $82 million generated by the team last season, $30 million came from donations by alumni and fans to get in line for season tickets. Another $33 million came from ticket sales to seven home games at the newly expanded Darrell K. Royal-Texas Memorial Stadium, which now fits 101,000 fans. Sponsorship agreements with Coca-Cola ( KO - news - people ) and PepsiCo's ( PEP - news - people ) Gatorade fed the team another $842,000. Nike ( NKE - news - people ) paid $1 million to adorn Longhorns jerseys with its swoosh logo.
Unlike NFL teams, which can be bought and sold on the open market, college teams have value in terms of what kind of dividends they pay to their stakeholders. "Dividend" money is what's left for the team's university (for academic purposes, including scholarship payments for football players) and athletic department (to support non-revenue sports) after the cost of running the football operation in question. It also includes what's generated for its conference (the distribution of bowl game revenue) and the community around the university (estimated incremental spending by visitors to the county that's attributable to the program). In our scoring system, the first two factors were given the most weight, while county revenue was given the least.
In order to accurately make comparisons, we standardized the revenue and expense streams for each team, since the methods of reporting to the Department of Education are often inconsistent from school to school.
By our reckoning, the Longhorns cleared $59 million in the season for University of Texas academics and athletics. We put the capitalized value of the Longhorns at $119 million, $11 million more than second-ranked University of Notre Dame, which topped our previous two rankings.
You might get some awnsers in the comments section found here:
http://rate.forbes.com/comments/CommentServlet?op=cpage&sourcename=stor…
When the market evens out, ND's "value" will more closely approximate their talent.
March 12th, 2010 at 10:01 PM ^
[It's too long; do read...]
Michigan might be the most profitable football program over the last 5 years. However, these 'rankings' tend to value revenue more than profit, which undervalues our athletic department (which has a lesser revenue but receives far more return for the money it annually 'invests').
Anyway, as to the question. Sure, ND may already be a [very] wealthy football program; sure, they already have more revenue than us (apparently), but that doesn't mean that they couldn't make more in the Big Ten. In fact, they would.
For what it's worth, each Big Ten team currently gets a FAR sweeter television deal from the BTN and other media rights sharing than ND does from NBC.
To oversimplify things, monetarily speaking, ND needs to make it to a BCS bowl annually to "keep all of that money for themselves" just to break even--more or less--with a school like Indiana (when we consider the Big Ten's equal sharing of media rights and BCS revenues alone; i.e., when we ignore other stuff like apparel & ticket sales, in which Indiana and ND are obviously in different leagues). ND's TV revenues could very well double as a Big Ten member. I've read that sentence three or four times this week.
ND's TV deal isn't nearly as sweet as a lot of folks make it out to be. It's enough, though. So, I shouldn't trash it. But NBC's offer isn't "competitive" with what the BTN can offer. Additionally, the Big Ten institutions each own an equal stockholding share of the BTN (collectively, we own ~50%, I think). So long as the BTN exists--or, better yet, grows!--our member institutions will be more than taken care of. ND's future relationship with NBC doesn't come with that kind of confident stability. A strong argument can be made that ND's future relationship with NBC doesn't come with comparable/any room for growth (revenue hikes), either.
If it were only about money, ND would have joined the Big Ten 2 years ago (or sooner). It isn't only about money, though. It's additionally about their pride of their independence and maybe other stuff, too. If that pride proves paralytic--and of course it might, and I can understand and expect such a thing--then they'll have made a giant financial gamble moving forward.
March 12th, 2010 at 10:10 PM ^
Big Ten Conference 51% share, Fox Cable Networks 49% share.
The Big Ten Channel is a joint venture between the conference and Fox's cable networks. The conference will own 51%, Fox 49%. The conference will supply the content, Fox will operate the network and the two entities will share the costs.
March 13th, 2010 at 12:25 AM ^
Are the "Big Ten" and the member institutions separate entities (in a way analogous to the NCAA and its member institutions being separate entities ... except different, because the Big Ten doesn't suck)? I have no idea, but I'd assume the answer is yes. I only ask because that 51% share interests me.
Does Michigan own 1/11 of 51% of the BTN?
Or does Michigan own 1/11 of (51% "minus" the Big Ten conference's fraction) of the BTN?
It barely matters. It's big money either way. But now I'm interested. I need a Big Ten historian and/or a conference accountant 'stat'.
...latter. The Big 10 (separate and distinct from the BTN) has costs associated with managing the BTN so they likely skim an overhead tax from BTN revenues before the profit sharing begins.
In fact, the BTN website reveals that they have an Associate Commissioner for Television Administration. I'm sure, at a minimum, BTN revenue pays for this position and associated staff.
March 12th, 2010 at 10:24 PM ^
+1 to you carris because that is the most I am allowed-great insight and contribution.
March 12th, 2010 at 10:07 PM ^
Of course, none of this means that ND *ought* to join the Big Ten. Sure, it'd be cute to give the 'Domers a good pride-swallowing ribbing for a while, but I don't think that college football nor the Big Ten nor Notre Dame would be better for it--even if one or several of those things would be more profitable with such a merger.
This thing really shouldn't be about money. In the 100+ year old plot that is the Michigan-ND-Big Ten novel, for instance, a lot of great character development has unfolded. In the end, our predecessors and ourselves (players and fans, etc.) have gifted us an excellent story of angst and distaste and mutual respect.
It's a lot like a D.H. Lawrence novel. It's elite. It's forever changing the American [novel/college football landscape]. And it has no plot. It's all about incredible character development. The fucking Bragwens, man. They weren't protagonists. They weren't antagonists. They just were. The same thing goes here.
Our story doesn't have a plot; it doesn't have a climax or ending, insofar as we can tell. But, to reiterate, it does have some excellent character development.
If ND joins the Big Ten, our 100+ year novel will suffer in that regard. I don't want to see it happen.