Normally, doctoral dissertations aren’t my idea of a fascinating read.
But an Indiana researcher released to IBJ a new study on college football that I think sports business experts, college administrators and fans alike will find riveting.
The researcher used his skills as a valuation analyst to value football programs as if they were stand-alone businesses that could be bought and sold on the open market.
I spent the last two weeks pouring over the 242-page study, and there is an in-depth story on its findings and the man behind it in the Oct. 10 print edition. For those with online subscriptions, the story will be available at IBJ.com on Saturday.
The researcher hopes the study will help athletic directors and college presidents make better investment and payroll decisions. He said knowing the valuation of a college football program, considering discounted cash flow models and myriad other factors, is more helpful in predicting a program’s financials than merely looking at revenue history.
He also thinks his model could help value other not-for-profits.
Forbes magazine has attempted to value professional sports franchises for more than a decade, but only recently tried to do likewise for a handful of college programs.
As far as I can tell, the locally-generated study is far more in-depth than any other study on the business of college football, giving values of the 100 biggest public college football programs.
The study ranked only public schools because the researcher used financial data required of public schools by the U.S. Department of Education. It valued IU’s program $22.4 million higher than Purdue’s.
Notably missing from the list are private schools such as Notre Dame and Southern Cal. But the researcher has some interesting thoughts on those schools, as well.
The researcher’s background is as interesting as the study. The 42-year-old earned two undergraduate degrees from Purdue, then an MBA and a doctorate from IU. But he’s not a life-long academic.
For seven years, he worked in management focusing on engineering and environmental risk management for AlliedSignal Corp. and United Technologies Corp.
As a business analyst for United Technologies and later as a consultant for Houlihan Valuation Advisors, he accrued 11 years’ experience as a valuation analyst. He has been an expert witness on valuation analysis in several state and federal court cases.
There’s more interesting sports business data in the study than I could possibly fit into one article. But the article includes a partial list of top-valued Football Bowl Subdivision (formerly known as NCAA D-IA) programs.
So who’s No. 1?
By a wide margin.
The study concludes that if the Longhorn football program were run as a stand-alone business and sold, it would go for $848.27 million.
For more on the study and to learn the identity of the researcher, you’ll have to check out the upcoming IBJ.