How Much Is UConn Football Worth?

[champs99and04]

It's fiction that you want to take as fact.

I've been a UConn fan for a very long time, I'm not so insecure that I look for everything to validate the existence of a athletic program. By far the worst thing about the football program is that the football fanbase has the worst inferiority complex in college football - it's comical.

Take off the blue glasses or don't I could care less either way.

He doesn't come off as insecure to me. Overly optimistic, maybe, but not insecure. Insecure people abandoned the program a long time ago. If you want insecure, the basketball board is that way. --->

I'm not much of a UConn fan these days, but the article he mentioned simply confirms to me what we've known all along - UConn is a lot more similar to your typical P5 program than it is to the other schools in the AAC - big, passionate alumni base, prime real estate in a valuable market, and lofty academic/research ambitions.

I do think there are a couple problems, of which he didn't mention, that might give you the impression that he's more optimistic than he is in reality:

1. To the extent that UConn football is valuable is contingent on a lot of variables that have nothing to do with football. It's a program that comes with a hard ceiling because of the obvious geography limitations. We could join the Big Ten, waive every conceivable academic standard for eligibility, and hire a hot new coach. None of it is going to make us Auburn. Maybe we can become Temple, or even something slightly better, but I think all of us would be more than fine with that at this point.

2. Branding has been a problem, and unless that changes with the next president, things will get worse before they get better. Despite all the bad luck that we've endured concerning conference realignment, I'm still firmly of the belief that better marketing and foresight would have gotten us a place at the table. Some of the steps that the school has taken to reach certain milestones have been counterintuitive to the growth and overall health of the fan base. The strength of the brand still seems to rest on people who graduated 20-30 years ago, and while it's not terribly unusual for a school to get caught in a generational divide, it's a pending change that figures to bite UConn harder than other schools given the restrictions in place. As more people retire and move out of the state, less younger people are sticking around to replace them.

There's a significant lag effect - from CR and a whole host of other things - that will hide some of our more fatal problems for a while. I think we all know that. In the meantime, we must be willing to challenge institutions, like the NCAA, that have indirectly victimized our school and our fan base. Until we do that we are unknowingly planting the seeds for our own demise.

 

[Uconnalliance]

Zero point zero?

 

[Dooley]

He doesn't come off as insecure to me. Overly optimistic, maybe, but not insecure. Insecure people abandoned the program a long time ago. If you want insecure, the basketball board is that way. --->

I'm not much of a UConn fan these days, but the article he mentioned simply confirms to me what we've known all along - UConn is a lot more similar to your typical P5 program than it is to the other schools in the AAC - big, passionate alumni base, prime real estate in a valuable market, and lofty academic/research ambitions.

I do think there are a couple problems, of which he didn't mention, that might give you the impression that he's more optimistic than he is in reality:

1. To the extent that UConn football is valuable is contingent on a lot of variables that have nothing to do with football. It's a program that comes with a hard ceiling because of the obvious geography limitations. We could join the Big Ten, waive every conceivable academic standard for eligibility, and hire a hot new coach. None of it is going to make us Auburn. Maybe we can become Temple, or even something slightly better, but I think all of us would be more than fine with that at this point.

2. Branding has been a problem, and unless that changes with the next president, things will get worse before they get better. Despite all the bad luck that we've endured concerning conference realignment, I'm still firmly of the belief that better marketing and foresight would have gotten us a place at the table. Some of the steps that the school has taken to reach certain milestones have been counterintuitive to the growth and overall health of the fan base. The strength of the brand still seems to rest on people who graduated 20-30 years ago, and while it's not terribly unusual for a school to get caught in a generational divide, it's a pending change that figures to bite UConn harder than other schools given the restrictions in place. As more people retire and move out of the state, less younger people are sticking around to replace them.

There's a significant lag effect - from CR and a whole host of other things - that will hide some of our more fatal problems for a while. I think we all know that. In the meantime, we must be willing to challenge institutions, like the NCAA, that have indirectly victimized our school and our fan base. Until we do that we are unknowingly planting the seeds for our own demise.

Spot on.

I am quite insecure though and suffer from an inferiority complex so severe, that I continue to think UConn is a P5 conference school/AD and want it to continue funding its sports to position itself that way. Not do the opposite like, you know, quitting a sport altogether and dropping our tradition rich hoops program to inferior mid-majordom forever.

 

[CL82]

Can't speak for the BY'er that you are replying to, but the thing that I find irritating about the analysis is that it perpetuates the myth that football funds other programs and the corrollary myth that CFB programs around the country are viable financial enterprises. The vast majority lose money and are justified only by the unproved hypothesis that they provide great institutional advertising. I think it would be great if we could finally get some numbers to talk about.

Serious question: Did you factor in P5 media money into that? The vast majority is football derived. How about Nike money?

 

[Adios]

I think the fact we're nouveau riche is why we are in the AAC. But we have riches. Our facilities overall were behind.

 

[RSTuthill]

Serious question: Did you factor in P5 media money into that? The vast majority is football derived. How about Nike money?

That should all be included. What should be excluded are institutional subsidies.

There have been numerous academic studies of this question over the years and all have concluded that except for the top 25 programs or so that CFB profitability is a myth perpetuated by accounting gimmickry.

Now, what COULD be argued is that this topic should be revisited, and that since ESPN was put in charge of determining winners and losers the economics of CFB have fundamentally changed. Yeah, that would be interesting. It might also give us a clue as to what the the CFB gods in Bristol have in store for the future of the game.

 

[JohnFSilver]

Guys, we all know expenses outpace revenue if we are doing football only. UConn runs a big operating deficit in football if memory serves me correctly. Of course, if this was a business, then there would be cuts in expenses to align with revenue and more of a demand to grow revenue and projections.

This is why the AD job is a big one and very important and should not just be looked at as a coach hirer. This is about managing an $80 million budget.

Look at the sales multiple - 1.4x revenue. That isn't some incredible multiple UConn would get if it was up for sale. It shows, at best, tepid growth projections if the team was acquired in a sale.

Texas is getting nearly 7x its revenue. Generating FCF is not what UConn is charged with. There is so much fat to cut out of UConn's budget that if they needed to run it leaner, they could. The subsidy is not sustainable and it will go down in coming years.

But that subsidy does not only cover the UConn FB deficit, it covers the deficit for almost every other sport the university offers.

Maybe men's and women's basketball are run with an operating surplus, but they wouldn't be protected if the subsidy was eliminated. Cuts would happen there too. The thought that the entire $33 million subsidy goes to the football program is false. The subsidy is for the entire athletic department.

Money is fungible. The subsidy was budgeted to keep UConn's spending levels where they are across all sports. Perhaps it was done to maintain P5 levels of spending.

Eliminate the subsidy, and we would see major cuts across the board in all athletic teams.

Might be a good thing to look into, how much revenue does UConn Football directly bring into the coffers. We know the expenses because those are line items on the budget, but how do you report on revenue? Someone buys a UConn Hat, is that football or basketball? Outside of ticket revenue, very hard for me to see how to separate revenue for things that crossover. For the purpose of the study, the guy included all revenue minus university subsidy. If this was Bobby Axelrod (come on, I know you guys love Billions), we might get more of a deep dive on the finances and of course some chicanery.

But this is all just a novelty and if you want to say BS, I can't argue with that. It is BS. It is for fun. It is for discussion.

That's why I liked it as a newsletter piece. And if you want to help a for-profit business generate FCF, go to UConndaily.com and signup for the newsletter.

You guys are the best. Good stuff here.

 

[RSTuthill]

I would suggest that all revenues of an aggregate nature be split on the basis of total proportion of spectators for each sport. Those numbers should be available -- turnstyle attendance plus TV audience. Sport specific apparel of course would be bookkept against the relevant sport.

We know how to allocate subsidies. Take expenses and subtract revenues (excluding all subsidies, institutional and student fees). That for each team is the subsidy received for the year. In some cases such as BB it could be a profit.

Yup, think you are right when you talk about fat. I used to travel to DC a lot. I would occasionally run into the Georgetown men flying commerical and sitting in coach. UConn flies charters, correct? Well flying charter for a FB team due to the booking problem is probably a necessity. And a case could be made for the BB teams as well. Just mentioning another well known institution that has made another choice at least for shorter flights and smaller teams.

 

[UConnFranklin]

Guys, you're getting a little off track here. This WSJ report isn't about how much net profit UConn football turns. It's a hypothetical valuation of what kind of hypothetical price tag UConn football would have if it were ever put up for hypothetical sale. They're looking into a number of different things to come up with their hypothetical numbers.

This is just another metric amongst a loooooooong list of metrics that shows that UConn and UConn football is alot more valuable to a P5 conference than fans, even some UConn fans, think.

Dooley, you hit is right on the head. Thanks for your insight!!!

 

[gioff2323]

Then why do we have a 40,000 seat stadium? While FIU and FAU have stadiums that hold 20,000? Maybe because we have a much bigger market?

So that’s why yale seats 64k plus ....

 

[UConn Dan]

justified only by the unproved hypothesis that they provide great institutional advertising.

I'm a firm believer that athletics does bring tangible and intangible dividends to the academic side of a school. I'm pretty sure the "front porch" is measurable to a degree. For starters, you can see increase in both student applications and donations during championship years.

 

[Palatine]

The real numbers are a bigger secret than the recipe for Kentucky Fried Chicken.

Here's what we know, football costs about $15 million a year. Total.

We make about $5 million in ticket sales. $2-$3 million in student fees go to the program.

The rest is speculation. There are broadcast rights that can come through the NCAA, the conference or direct to UConn payments. Individual Contributions/Donations to the program. Corporate Sponsors. Merchandise Sales. Royalties. Licenses. Sports Camps. Stadium Advertising, Programs and Concessions.

I may have missed something or everything. There is overlap of these revenue streams and they can be counted various ways. Shortfall has to be covered by the university.

For those interested in the bigger picture here is the UConn Foundation 2018 Endowment Report.

https://www.foundation.uconn.edu/wp...2/2018/10/UF1157-EndowmentReport-2018-WEB.pdf

 

[CL82]

Now, what COULD be argued is that this topic should be revisited, and that since ESPN was put in charge of determining winners and losers the economics of CFB have fundamentally changed. Yeah, that would be interesting. It might also give us a clue as to what the the CFB gods in Bristol have in store for the future of the game.

This is exactly my point. I think that the study that you are thinking of predates the big media rights boom. I do not believe that any study that does not consider the impact of of P5 media money and Nike money is relevant anymore. Media rights money alone pays P5 schools @$35M-45M annually. Right now we make a couple million.

Think about that. Without any other change if UConn was a P5 school, it's Athletic Department is immediately profitable. That is before the impact of a share in post season revenue (@400M between the college football playoffs and contract bowls) and increase in value of Nike deal and IMG deal. Keep in mind as well that you could also expect an increase in gate revenue and merchandise sales. That is why football is critical for the health of college athletic departments.

Right now UConn is in the worst of all possible worlds. It is spending like the major program with the revenue of a mid-major (sort of- our Nike and IMG deals are very good, better than most P5 deals.) It must do that if it is to remain a viable candidate in any future conference expansion. Being in the P5 club is necessary to support college sports at a national level and FBS football is the key to that door.

 

[Dooley]

Guys, we all know expenses outpace revenue if we are doing football only. UConn runs a big operating deficit in football if memory serves me correctly. Of course, if this was a business, then there would be cuts in expenses to align with revenue and more of a demand to grow revenue and projections.

This is why the AD job is a big one and very important and should not just be looked at as a coach hirer. This is about managing an $80 million budget.

Look at the sales multiple - 1.4x revenue. That isn't some incredible multiple UConn would get if it was up for sale. It shows, at best, tepid growth projections if the team was acquired in a sale.

Texas is getting nearly 7x its revenue. Generating FCF is not what UConn is charged with. There is so much fat to cut out of UConn's budget that if they needed to run it leaner, they could. The subsidy is not sustainable and it will go down in coming years.

But that subsidy does not only cover the UConn FB deficit, it covers the deficit for almost every other sport the university offers.

Maybe men's and women's basketball are run with an operating surplus, but they wouldn't be protected if the subsidy was eliminated. Cuts would happen there too. The thought that the entire $33 million subsidy goes to the football program is false. The subsidy is for the entire athletic department.

Money is fungible. The subsidy was budgeted to keep UConn's spending levels where they are across all sports. Perhaps it was done to maintain P5 levels of spending.

Eliminate the subsidy, and we would see major cuts across the board in all athletic teams.

Might be a good thing to look into, how much revenue does UConn Football directly bring into the coffers. We know the expenses because those are line items on the budget, but how do you report on revenue? Someone buys a UConn Hat, is that football or basketball? Outside of ticket revenue, very hard for me to see how to separate revenue for things that crossover. For the purpose of the study, the guy included all revenue minus university subsidy. If this was Bobby Axelrod (come on, I know you guys love Billions), we might get more of a deep dive on the finances and of course some chicanery.

But this is all just a novelty and if you want to say BS, I can't argue with that. It is BS. It is for fun. It is for discussion.

That's why I liked it as a newsletter piece. And if you want to help a for-profit business generate FCF, go to UConndaily.com and signup for the newsletter.

You guys are the best. Good stuff here.

Great stuff John. I think there are some UConn fans who don't understand the subsidy allocation, AD budget, revenue streams and how they impact all UConn sports, not just football. We can say it here until we're UConn blue in the face but coming from you, it will hopefully have more of an impact. Fingers crossed!

You and Zac should tackle a UConn fanbase piece on The Daily in the future: why do people root for specific UConn sports but root against others? Does anyone at UConn think this is an issue (either publicly or privately)? If so, can UConn do anything to unite the fanbase (ex - offer a season ticket discount bundling program that stretches across all sports)? Is the segmented fanbase currently impacting UConn - in terms of revenue, reputation, etc - and in terms of growth potential (ex - AAC media negotiation, state venue renovation projects like XL Center, conference realignment, future funding, etc)? In other words, do these constant Big East debates actually help or hurt UConn?

UConn football has been nothing short of a dumpster fire in recent years. No question. I also know that some sports appeal to folks differently than others. I LOVE baseball, but know it's too boring for others. All good there. But I don't ever recall reading or hearing anyone other than UConn fans wanting to drop the sport altogether. Not Kansas. Not SMU. Heck, the public outcry at UAB was so big they restored the program after 1 year.

The irony, of course, is that if that "Big East / drop football" talk stopped and UConn fans rooted for the name 'UConn' instead of specific sports only, that perhaps UConn AD/BoT would take more aggressive steps to win in all sports. There will be no questioning or worry from the AAC and its media partners in the upcoming media negotiation. There would also be no questioning or worry from potential P5 conferences when the next, and possible final round, of conference realignment cranks up again in 5+ years. With aggressive support comes winning and with winning comes all sorts of nice things, including the opportunity for UConn to gain acceptance into a P5 conference (where it belongs) and make real, self-sustaining money to fund all UConn sports without subsidies. With P5 money, we can fend off others from stealing our coaches, our recruits, our money. The growth potential is enormous.

Seems like there are UConn fans who are all too quick to shoot themselves in both feet... and then complain about it. Would love to read about a deeper dive as to why this is.

 

[Dooley]

This is exactly my point. I think that the study that you are thinking of predates the big media rights boom. I do not believe that any study that does not consider the impact of of P5 media money and Nike money is relevant anymore. Media rights money alone pays P5 schools @$35M-45M annually. Right now we make a couple million.

Think about that. Without any other change if UConn was a P5 school, it's Athletic Department is immediately profitable. That is before the impact of a share in post season revenue (@400M between the college football playoffs and contract bowls) and increase in value of Nike deal and IMG deal. Keep in mind as well that you could also expect an increase in gate revenue and merchandise sales. That is why football is critical for the health of college athletic departments.

Right now UConn is in the worst of all possible worlds. It is spending like the major program with the revenue of a mid-major (sort of- our Nike and IMG deals are very good, better than most P5 deals.) It must do that if it is to remain a viable candidate in any future conference expansion. Being in the P5 club is necessary to support college sports at a national level and FBS football is the key to that door.

Nailed it.

 

[CL82]

I think there are some UConn fans who don't understand the subsidy allocation, AD budget, revenue streams and how they impact all UConn sports, not just football.

I believe that some club, rec programs are also included in the AD budget.

 

[Adios]

So that’s why yale seats 64k plus ....

That speaks to OUR potential, if anything.

I wouldn't be surprised if the Yale Bowl might be filled on a regular basis again one day down the road, considering the way the Ivy League continues to recruit very well and seems to be slowly improving compared to the recent past due to the schools' collective prestige. If Stanford and Northwestern can succeed, so can Ivy schools.