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Forbes most Valuable Football Programs

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Forbes most Valuable Football Programs

Unread postby e0y2e3 » Wed Dec 19, 2012 10:47 pm

http://www.forbes.com/sites/chrissmith/ ... ll-on-top/

This is, by far and away, statistically speaking the worst Forbes analysis ever. Christ, I thought their baseball numbers were silly......

The entire methodology here fails in every single way. This is, legitimately, the biggest joke valuation I have ever seen. An Undergrad Liberal Arts Major could have come up with better methodology.

Rank Team Conference Value ($Mil) Revenue ($Mil) Profit ($Mil)
1 Texas Longhorns Big 12 133 104 78
2 Michigan Wolverines Big Ten 120 85 62
3 Notre Dame Fighting Irish Independent 103 69 43
4 LSU Tigers SEC 102 69 45
5 Georgia Bulldogs SEC 99 75 52
6 Alabama Crimson Tide SEC 95 82 45
7 Florida Gators SEC 93 74 51
8 Auburn Tigers SEC 85 77 44
9 Tennessee Volunteers SEC 84 55 35
10 Arkansas Razorbacks SEC 83 64 40

11 Nebraska Cornhuskers Big Ten 82 55 36
12 Oklahoma Sooners Big 12 80 60 36
13 Penn State Nittany Lions Big Ten 79 66 36
14 Wisconsin Badgers Big Ten 76 48 24
15 Oregon Ducks Pac-12 74 52 32
16 USC Trojans Pac-12 68 52 29
17 South Carolina Gamecocks SEC 67 48 26
18 Washington Huskies Pac-12 65 53 28
19 Michigan State Spartans Big Ten 64 50 31
20 Ohio State Buckeyes Big Ten 63 58 24
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Re: Forbes most Valuable Football Programs

Unread postby Cerebral_DownTime » Wed Dec 19, 2012 11:04 pm

So you're saying OSU should be higher?
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Re: Forbes most Valuable Football Programs

Unread postby furls » Thu Dec 20, 2012 1:00 am

They didn't really say how they valued the homegames, they just said that travelling fans spend money and therefore generate XXX dollars of revenue. I don't know, maybe they are right. I have a hard time believing that tOSU is 20. Particularly given how much OSU licensed crap you see everywhere. I saw about 10 tOSU jackets in NYC this weekend alone. Hell, I saw a guy in an OSU sweatshirt at my daughter's dance lesson tonight. OSU crap is everywhere.

Whatever, I don't care as long as they win their football and basketball games.
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Re: Forbes most Valuable Football Programs

Unread postby e0y2e3 » Thu Dec 20, 2012 11:18 am

The entire concept of valueing a team based on the % of people they bring to a city against the entire population of said city is ridiculously stupid and make schools like ND look more valuable than OSU even if they bring in 100K less people.

The system they are using measure X imported population against Y city population so with C-Bus being huge for a college city the Buckeyes are immediately crushed by a rating that means nothing more than X team bring Z relative value to their city. Who in the fuck cares about relative value in doing valuations?

Well... ND brings 100% more people to South Bend whereas OSU only brings 5% more people ND must be more valuable (seriously, WTF?).

Also measuring profit via the football team is INCREDIBLY stupid when you have schools like OSU that will always have depleted profit margins because the football team pays for 500 different sports. Why in the fuck does paying for other sports impact the valuation of a football team in a negative capacity?

The only interesting aspect I found there is that the pure revenue numbers in 2011-2012 where WAY down compared to even as recently as 2009 and 2010. Fickel really didn't sell.
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Re: Forbes most Valuable Football Programs

Unread postby e0y2e3 » Mon Jan 07, 2013 6:05 pm

http://online.wsj.com/article/SB1000142 ... 17888.html

A much more realistic valuation places OSU 5th and makes sense.
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Re: Forbes most Valuable Football Programs

Unread postby furls » Mon Jan 07, 2013 11:01 pm

You mean intrinsic value should be calculated based on NPVs, future revenue growth and a Beta/risk factor....

Hmmm... that's weird, you mean football programs can be valued like, say a for profit corporation? Hmmmm, crazy shit. Sounds like he just made some assumptions and used CAPM-style model. Wonder how he accounted for future B1G TV revenues because the valuation looks a bit small for some of our little brothers in the conference based on the future (2017) contract estimates.
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Re: Forbes most Valuable Football Programs

Unread postby furls » Mon Jan 07, 2013 11:12 pm

I guess what I meant to say there and may have said unclearly at the end is that if I were in an investor I would certainly buy Maryland and Rutgers football on the projected TV revenues alone. Rutgers is only worth $64M, but they are expected to bring in 30-40M in TV money in 2017 alone. That is a financial winner for any reasonable WACC.

The projected TV revenues for MD after joining the B1G are as follows:

2012: 20M
2013: 20M
2014: 32M
2015: 32M
2016: 32M
2017: 43M
2018: 43M

The 43M is expected stay at least stable (or grow) from 2017 on. Using a 12% discount rate, MD's next ten years of TV revenue (assuming 0 growth after 2017) is worth a hair over $200M as an NPV.
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