On a bye weekend for UCLA football (our game watching open thread is here) wanted to pass on a specific datapoint on our program. Lou Harry from the Indianapolis Business Journal recently published a top-100 list of college football's financial "winners and losers":
Indiana University finance professor Ryan Brewer recently completed and released to the Indianapolis Business Journal a 242-page study that places valuations on college football programs as if they were businesses for sale. The fascinating study was more than two years in the making.
Brewer valued the college football franchises the way a Wall Street analyst would value a business operation, based on cash flow history and myriad other factors.
So where is UCLA placed in this list? Check it out here. We are at number 38 (worth $66.1 million) behind powerhouses such as Indiana and Oregon State. Note private schools such as Notre Dame and Southern Cal were not included in this list (because they are not obligated to disclose financials like public schools).
Washington was the top Pac-12 school checking in at number 22 ($136.2 million). Colorado surprisingly was checked in at number 27 ($122.7 million). Oregon checked in at number 30 ($102 million), Cal checked in at number 43 ($55.9 millions). Again, Southern Cal is probably at the top of this list, and I am guessing in the top-10.
So is UCLA valued at what is really worth? Not really if you consider among the Pac-12 programs UCLA has the second largest footpint in terms of fanbase:
The Pacific-12 plays plenty of good football, but the low avidity of college football fans in the Western United States means that it’s in the second-tier as a television product: only U.S.C. and U.C.L.A. have at least 1 million decided fans each. Despite their strong performance on the field, meanwhile, Washington and Oregon rank outside the top 40 in terms of their fan footprint. And other conference schools, like Oregon State, Stanford and Washington State, do poorly by major-conference standards.
Here is the chart from the NYT:
On this site we have detailed in posts after posts the previous history and success of UCLA football. No need to write huge posts making that argument again re. why UCLA football needs to be a powerhouse in the West. The datapoint above is just yet another evidence of the potential of UCLA football.
Yet when it comes to overall value we are behind Oregon State. So we can clearly be doing lot better. That is why it is more important than ever that under Rick Neuheisel UCLA takes a definitive step this year in getting back to where it was as a football program. 6 win season (even if it includes a victory over Southern Cal) will no longer cut it. As I said, earlier in the week now or never.
UPDATE (N): More on the methodology used in the study referred to in the IBJ blogpost (from the IBJ print edition of Oct. 10 republished in AthleticBusiness.com):
Brewer, a valuation analyst who has two undergraduate degrees from Purdue and an MBA and doctorate degree from IU, attempted to value the properties for what they would fetch as a stand-alone business on the open market.
"As a key difference, the study I did addresses the value of each program from the standpoint of an investor group," Brewer said. "Such an investor group might ask, 'How much is the program worth? If we own this program, what do we do with the cash flow: scholarships, funding other sports programs, or reinvesting in our football program? Do we build a new stadium? Hire a new coach? If the NCAA lets us pay college players, how much can we pay them? What would the expected return on these investments be? Can we justify the capital expense?'"
Brewer outlines his theories and meth- odology in the dissertation, which took just more than two years to complete. In the study, he details the factors used in his valuations, including short-term and longterm performance, population of home city, age and size of stadium, university endowment size, coach's guaranteed salary, a seven-year cash flow analysis and student population.
"I looked at it like it was a stock price," said Brewer, who has been an expert witness in business valuations in several court cases.