The Private Equity College Sports Hellscape Thread

[CTFAN4LIFE]

What happened to his prediction that big 12 Connecticut talks would be announced before the end of the year? I mean, I guess the year is over yet.

He has said the timeline is early 2025.

 

[Ha Who]

Big discussion on CNBC this morning. This was also mentioned during the talk.

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

 

[CTFAN4LIFE]

Big discussion on CNBC this morning. This was also mentioned during the talk.

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

Did the discussion bring any interesting points to the table?

Imagine if we had P4 tv revenue - you'd have to think we'd jump up 30 spots or so.

 

[Ha Who]

Did the discussion bring any interesting points to the table?

Imagine if we had P4 tv revenue - you'd have to think we'd jump up 30 spots or so.

Big discussion on private equity and basically how this is destroying college athletics. The schools have justified everything they are doing as making money which is used for the academic side. I’d like to find a link of the interview, but basically the hosts were attacking the proposal for 51% ownership of a college team by a private equity firm as they would no longer be looking at things from nonprofit/academic side. However, if they dropped to a 49% percentage with the schools in control, they did seem more amenable to it. Basically it was a depressing discussion about the ownership of college teams. The bright side is if we’re in this top-tier, a good private equity firm would not care about the so-called baggage we carry. Of course, Charlie Brown is always lurking with Lucy.

 

[Ha Who]

 

[KryHavok]

Wow, that surprised me that we're at 71 and only marginally better than Boise State. That BCU is valued 2.5-higher than us is equally appalling.

 

[CTFAN4LIFE]

Our AD is really the perfect candidate for PE because we need revenue and because we are not in a power conference with power conference tv revenue, we have more upside on a percentage basis than almost any other AD in terms of unlocking potential value. I think this is what would get us into the Big12 or ACC.

 

[Rufus]

Here it is in print:

https://www.cnbc.com/2024/12/19/college-sports-programs-valuations.html

College Athletics Valuations 2024​

Rank	Program	Valuation	Revenue	Conference	City	Public/Private
1.	Ohio State University	$1.318B	$280M	Big Ten	Columbus, OH	public
2.	University of Texas at Austin	$1.281B	$271M	SEC	Austin, TX	public
3.	Texas A&M University	$1.264B	$279M	SEC	College Station, TX	public
4.	University of Michigan	$1.062B	$230M	Big Ten	Ann Arbor, MI	public
5.	University of Alabama	$978M	$200M	SEC	Tuscaloosa, AL	public
6.	University of Notre Dame	$969M	$224M	ACC	Notre Dame, IN	private
7.	University of Georgia	$950M	$210M	SEC	Athens, GA	public
8.	University of Nebraska	$943M	$205M	Big Ten	Lincoln, NE	public
9.	University of Tennessee	$940M	$202M	SEC	Knoxville, TN	public
10.	University of Oklahoma	$928M	$199M	SEC	Norman, OK	public
11.	Penn State University	$924M	$202M	Big Ten	University Park, PA	public
12.	University of Southern California	$923M	$212M	Big Ten	Los Angeles, CA	private
13.	Louisiana State University	$916M	$200M	SEC	Baton Rouge, LA	public
14.	University of Florida	$865M	$189M	SEC	Gainesville, FL	public
15.	University of Wisconsin	$838M	$198M	Big Ten	Madison, WI	public
16.	Clemson University	$800M	$196M	ACC	Clemson, SC	public
17.	University of Oregon	$780M	$151M	Big Ten	Eugene, OR	public
18.	University of Arkansas	$776M	$167M	SEC	Fayetteville, AR	public
19.	University of Kentucky	$775M	$174M	SEC	Lexington, KY	public
20.	Auburn University	$772M	$195M	SEC	Auburn, AL	public
21.	University of Iowa	$747M	$167M	Big Ten	Iowa City, IA	public
22.	Michigan State University	$740M	$171M	Big Ten	East Lansing, MI	public
23.	Stanford University	$687M	$180M	ACC	Stanford, CA	private
24.	Florida State University	$673M	$170M	ACC	Tallahassee, FL	public
25.	University of Illinois	$665M	$148M	Big Ten	Champaign, IL	public
26.	Duke University	$659M	$153M	ACC	Durham, NC	private
27.	University of Washington	$658M	$152M	Big Ten	Seattle, WA	public
28.	Indiana University	$653M	$145M	Big Ten	Indianapolis, IN	public
29.	University of Mississippi	$651M	$142M	SEC	Oxford, MS	public
30.	University of South Carolina	$650M	$160M	SEC	Columbia, SC	public
31.	University of Miami	$639M	$160M	ACC	Coral Gables, FL	private
32.	University of Minnesota	$637M	$149M	Big Ten	Minneapolis, MN	public
33.	Texas Tech University	$619M	$147M	Big 12	Lubbock, TX	public
34.	University of Louisville	$595M	$143M	ACC	Louisville, KY	public
35.	University of Missouri	$590M	$142M	SEC	Columbia, MO	public
36.	Purdue University	$567M	$124M	Big Ten	West Lafayette, IN	public
37.	University of Kansas	$553M	$128M	Big 12	Lawrence, KS	public
38.	Vanderbilt University	$551M	$125M	SEC	Nashville, TN	private
39.	Texas Christian University	$542M	$149M	Big 12	Fort Worth, TX	private
40.	UNC-Chapel Hill	$539M	$139M	ACC	Chapel Hill, NC	public
41.	University of Arizona	$532M	$143M	Big 12	Tucson, AZ	public
42.	University of Pittsburgh	$524M	$137M	ACC	Pittsburgh, PA	public
43.	Mississippi State University	$523M	$116M	SEC	Starkville, MS	public
44.	Baylor University	$513M	$137M	Big 12	Waco, TX	private
45.	University of Virginia	$506M	$141M	ACC	Charlottesville, VA	public
46.	Oklahoma State University	$500M	$122M	Big 12	Stillwater, OK	public
47.	Georgia Tech	$498M	$134M	ACC	Atlanta, GA	public
48.	Iowa State University	$492M	$116M	Big 12	Ames, IA	public
49.	Syracuse University	$487M	$114M	ACC	Syracuse, NY	private
50.	Northwestern University	$486M	$118M	Big Ten	Evanston, IL	private
51.	North Carolina State University	$481M	$121M	ACC	Raleigh, NC	public
52.	University of Maryland	$477M	$121M	Big Ten	College Park, MD	public
53.	Virginia Tech	$474M	$130M	ACC	Blacksburg, VA	public
54.	University of California, Los Angeles	$472M	$105M	Big Ten	Los Angeles, CA	public
55.	University of Colorado	$470M	$127M	Big 12	Boulder, CO	public
56.	University of Utah	$468M	$126M	Big 12	Salt Lake City, UT	public
57.	Kansas State University	$444M	$102M	Big 12	Manhattan, KS	public
58.	Boston College	$443M	$118M	ACC	Chestnut Hill, MA	private
59.	Rutgers University	$417M	$125M	Big Ten	New Brunswick, NJ	public
60.	West Virginia University	$403M	$106M	Big 12	Morgantown, WV	public
61.	Washington State University	$392M	$79M	Pac-12	Pullman, WA	public
62.	University of California, Berkeley	$386M	$126M	ACC	Berkeley, CA	public
63.	Wake Forest University	$362M	$97M	ACC	Winston-Salem, NC	private
64.	Brigham Young University	$357M	$106M	Big 12	Provo, UT	public
65.	Southern Methodist University	$327M	$86M	ACC	Dallas, TX	private
66.	Oregon State University	$326M	$92M	Pac-12	Corvallis, OR	public
67.	San Diego State University	$287M	$104M	MWC	San Diego, CA	public
68.	Arizona State University	$279M	$115M	Big 12	Tempe, AZ	public
69.	University of Cincinnati	$216M	$87M	Big 12	Cincinnati, OH	public
70.	University of Central Florida	$181M	$85M	Big 12	Orlando, FL	public
71.	University of Connecticut	$178M	$93M	Big East	Storrs, CT	public
72.	Boise State University	$176M	$61M	MWC	Boise, ID	public
73.	East Carolina University	$153M	$63M	AAC	Greenville, NC	public
74.	University of South Florida	$150M	$71M	AAC	Tampa, FL	public
75.	University of Memphis	$148M	$64M	AAC	Memphis, TN	public

Correction: This story has been updated to correct the valuation for North Carolina State University, which is worth $481 million. It also corrects the rankings of 16 other schools on CNBC’s list.

 

[Rufus]

For teams that changed leagues, it will be interesting to see how their valuations change in the next few years. I'm not sure if this year's moves are even factored into these numbers, as revenue from this year's moves won't show up until June 30, 2025.

Will Texas in the SEC be enough to overtake Ohio State for the #1 spot?

Will Oklahoma rise from its current #10 valuation as a member of the SEC?

And then the B1G additions ---- how high will USC (#12) and UCLA (#54) rise as full-share members of the B1G?

Oregon (#17) and Washington (#27) are only half-share members of the B1G until 2030, so those programs will keep rising until they reach full-share status for conference revenue.

Maryland (#52) and Rutgers (#59) are still paying back their B1G loans, so their values will keep rising until those loans are paid back in full. Not sure how many more years that will be, but it shouldn't be many more.

When the Big 12 added Cincinnati (#69), Houston (NR), UCF (#70) and BYU (#64), they were not initially full-share members. I think that might have been amended when the 4 corner schools were added, but that wouldn't be reflected in these numbers, so I'm assuming their valuations will rise once that is factored into the financials above.

Washington State (#61) and Oregon State (#66) are likely going to drop further down the list going forward.

How is San Diego State (#67) worth more than UConn (#71)?!?!?!?!?

 

[Kolumbo]

Our AD is really the perfect candidate for PE because we need revenue and because we are not in a power conference with power conference tv revenue, we have more upside on a percentage basis than almost any other AD in terms of unlocking potential value. I think this is what would get us into the Big12 or ACC.

The problem with the SEC programs is the SEC does not sponsor men's soccer. I think Texas will take over #1 soon.

It seems the valuations range from 2x to 4x annual revenues. UConn is just under 2x. Miss State is 4.5x, all because of football? UConn really takes a hit based on my last quoted paragraph. vvv So yes, it there is a great deal of upside for UConn if it joined a conference

"Ohio State University is the most valuable athletic program, worth an estimated $1.32 billion. The Buckeyes had $280 million in revenue in 2023, the most of any school. Other factors that helped propel the Buckeyes to the top of the rankings are an alumni base of over 600,000, a fan base of more than 11 million, boosters that donated nearly $60 million last year, and a football team that routinely has attendance of over 100,000 at its games."

"In aggregate, the SEC is worth $13.3 billion, an average of $832 million per school; followed by the Big Ten at $13.2 billion, an average of $734 million per school; the ACC at $9.6 billion, or $562 million per school; and the Big 12, at $6.7 billion, or $420 million per school."

"The list is reflective of the current enterprise value of each program, starting with a base revenue multiple of four for all institutions, and then adjusting the multiple for variables, including conference affiliation, estimated NIL spend, school subsidies, number of alumni and other factors that can catalyze future revenue growth and profitability. "

 

[CL82]

Did the discussion bring any interesting points to the table?

Imagine if we had P4 tv revenue - you'd have to think we'd jump up 30 spots or so.

Exactly. It seems that a large part of value is determined by media revenue. Thus schools who are on the outside, looking in, should be on the outside, looking in because they're worth less then the schools that are already in a P4 conference, because they have P4 media revenue. The reasoning is indisputably circular.

 

[UConnJim]

I would take the CNBC numbers with a grain of salt. SD State had an athletic budget of $66 million last year, but the CNBC numbers show a revenue number of $104 million.

 

[ZooCougar]

The problem with the SEC programs is the SEC does not sponsor men's soccer. I think Texas will take over #1 soon.

It seems the valuations range from 2x to 4x annual revenues. UConn is just under 2x. Miss State is 4.5x, all because of football? UConn really takes a hit based on my last quoted paragraph. vvv So yes, it there is a great deal of upside for UConn if it joined a conference

"Ohio State University is the most valuable athletic program, worth an estimated $1.32 billion. The Buckeyes had $280 million in revenue in 2023, the most of any school. Other factors that helped propel the Buckeyes to the top of the rankings are an alumni base of over 600,000, a fan base of more than 11 million, boosters that donated nearly $60 million last year, and a football team that routinely has attendance of over 100,000 at its games."

"In aggregate, the SEC is worth $13.3 billion, an average of $832 million per school; followed by the Big Ten at $13.2 billion, an average of $734 million per school; the ACC at $9.6 billion, or $562 million per school; and the Big 12, at $6.7 billion, or $420 million per school."

"The list is reflective of the current enterprise value of each program, starting with a base revenue multiple of four for all institutions, and then adjusting the multiple for variables, including conference affiliation, estimated NIL spend, school subsidies, number of alumni and other factors that can catalyze future revenue growth and profitability. "

The problem is they lack men’s soccer? How is that remotely consequential?

 

[Kolumbo]

The problem is they lack men’s soccer? How is that remotely consequential?

it was a joke, but with NIL, you never know!

 

[ZooCougar]

it was a joke, but with NIL, you never know!

If the SEC played men’s soccer they would no doubt claim that they invented the game.

 

[Kolumbo]

Seriously though.

If the SEC played men’s soccer they would no doubt claim that they invented the game.

Some of these SEC programs could really load up and pay for championships. At a minimum it would be a way to up their championship totals outside of basketball and football. They could hire the best of the best college players or recruit directly from Brazil and Argentina. Imagine Messi coaching at Miami. If Messi were to get involved, I'm sure a Florida or Texas could throw their hats into the ring to play semi-pro ball. Crazy talk but championships are championships.

The Sun Belt has a few P4 programs:
Kentucky
South Carolina
West Virginia
Central Floria

 

[ZooCougar]

Seriously though.

Some of these SEC programs could really load up and pay for championships. At a minimum it would be a way to up their championship totals outside of basketball and football. They could hire the best of the best college players or recruit directly from Brazil and Argentina. Imagine Messi coaching at Miami. If Messi were to get involved, I'm sure a Florida or Texas could throw their hats into the ring to play semi-pro ball. Crazy talk but championships are championships.

The Sun Belt has a few P4 programs:
Kentucky
South Carolina
West Virginia
Central Floria

Messi couldn’t be bothered.

 

[huskymedic]

 

[KryHavok]

I received an alumi e-mail that detailed how Hayley Segar (CLAS '17 and New London native) went on Shark Tank to pitch her swimsuit company ultimately making a deal with 2 of the sharks.
Alum Hayley Segar Wows ‘Shark Tank’ Judges, Lands a Deal with Two of Them - UConn Today
This is a fantastic story for her. Some of the swimsuits even have names corresponding to CT locales (Foxon, Harkness, Woodmont, Thames, Merritt).

Ok, great, now we have a nutmeg daughter and UConn alum who has the ears of some billionaire sharks...what's the next sales pitch gonna be?^_^

 

[upstater]

This whole thread is going to seem quaint in a couple of months time.

To use a Warren Buffet analogy, "Only when the tide goes out do you learn who has been swimming naked."

Universities are looking at total calamity right now.

Study the federal research dollars in any budget. Now, it's bad enough research has shut down (for some projects, they'll totally scuppered) but then realize that the university takes 60% of those dollars to cover overhead (building, salaries, benefits, materials). How are they going to make up the shortfall?

Good luck.

 

[jostar1]

This whole thread is going to seem quaint in a couple of months time.

To use a Warren Buffet analogy, "Only when the tide goes out do you learn who has been swimming naked."

Universities are looking at total calamity right now.

Study the federal research dollars in any budget. Now, it's bad enough research has shut down (for some projects, they'll totally scuppered) but then realize that the university takes 60% of those dollars to cover overhead (building, salaries, benefits, materials). How are they going to make up the shortfall?

Good luck.

 

[UConn Dan]

National media when UConn uses institutional support: I caN’T bEliEVe ThEy rEquIRe sUpPOrT tO mAiNTaIN ATheLITicS. UcONn sHoULd juST dRoP fOoTBalL

National media when FSU uses institutional support (probably): in this day and age it’s such a smart move to keep up with never ending arms race. Kudos to FSU for getting ahead and being proactive.

 

[upstater]

HAHAHAHAHAHA!!!!!

 

[huskymedic]

Briggs: How much would it cost to ‘buy’ the Toledo football program?

What if college football programs could be bought and sold on the open market as if they were NFL franchises? What would they be worth? A new study ...

www.toledoblade.com

 

[nelsonmuntz]

Briggs: How much would it cost to ‘buy’ the Toledo football program?

What if college football programs could be bought and sold on the open market as if they were NFL franchises? What would they be worth? A new study ...

www.toledoblade.com

These writers do not understand how the revenue is generated for these programs. I will never discount the ability of a seller to find the stupidest private equity fund in the market, but I really struggle with how it is possible to assign value to any of these athletic programs that are dependent on student fees or some other kind of subsidy that can be cut off.

 

[uconndogs]

Briggs: How much would it cost to ‘buy’ the Toledo football program?

What if college football programs could be bought and sold on the open market as if they were NFL franchises? What would they be worth? A new study ...

www.toledoblade.com

Ryan Brewer, an associate professor of finance at Indiana University Columbus.
There's a reason someone is an associate professor in finance...

actualize that potential and serve the greater university's initiative
The greater university good, which presumably would have a great deal to do with the student body and student athletes, is not being served by big-time college athletics. This guys is probably so blinded by all of this he can't possibly see that.

Sure, spin off these college football programs (and/or basketball for that matter) from their universities. The univesities get lisencing revenues (or some revenue stream) from the naming. The equity enjoyes the returns (or quite possibly not) from running these teams as professional sports franchises. Sure, I get the concept. But, what would that have to do with college athletics at it's core? Why would you need student athletes to be the participants? Now we're talking NFL super light. I would have to be real bored to tune in for that.....and I'm never that bored.

 

[upstater]

Ryan Brewer, an associate professor of finance at Indiana University Columbus.
There's a reason someone is an associate professor in finance...

Not sure what you're getting at here.

 

[uconndogs]

Not sure what you're getting at here.

I was just being snarky. I suspect this person did elaborate valuation methodologies without much thinking about real world implications. More to the point, I just don't see how these programs hold on to their fan base when and if they ever get meaningfully divorced from their universities.

 

[upstater]

I was just being snarky. I suspect this person did elaborate valuation methodologies without much thinking about real world implications. More to the point, I just don't see how these programs hold on to their fan base when and if they ever get meaningfully divorced from their universities.

Ah, gotcha.

I certainly agree with you that when pundits, lawyers, presidents and even judges talk about fairness and student athletes being paid they never ever ever look at an actual university budget to see what is going on.

If they did, they'd realize that regular students are subsidizing the vast majority of these depts (not all, there are a handful that have broken free) with much more than student fees.

As Im the father of a senior applying to college right now, I've seen that they are factoring in a bunch of costs to total cost of higher ed. that my child would pay regardless if she were a student or not. $4k over the money the school is going to take in. Yes, my daughter will have a cell phone whether or not she is in college. Yes, my daughter will pay commuter costs whether she's in college or on the way to a job.

These "costs" are only there because the schools needed to inflate actual costs in order to pay athletes. So brainless.

As for the last part, I've been saying for a while that the teams could keep their fanbase in much of the country (outside the west coast and northeast) by licensing the university's brand name for their professional enterprise. So they would be the UConn Huskies pro basketball or semi-pro basketball team.

 

[Patman]

Ah, gotcha.

I certainly agree with you that when pundits, lawyers, presidents and even judges talk about fairness and student athletes being paid they never ever ever look at an actual university budget to see what is going on.

If they did, they'd realize that regular students are subsidizing the vast majority of these depts (not all, there are a handful that have broken free) with much more than student fees.

As Im the father of a senior applying to college right now, I've seen that they are factoring in a bunch of costs to total cost of higher ed. that my child would pay regardless if she were a student or not. $4k over the money the school is going to take in. Yes, my daughter will have a cell phone whether or not she is in college. Yes, my daughter will pay commuter costs whether she's in college or on the way to a job.

These "costs" are only there because the schools needed to inflate actual costs in order to pay athletes. So brainless.

As for the last part, I've been saying for a while that the teams could keep their fanbase in much of the country (outside the west coast and northeast) by licensing the university's brand name for their professional enterprise. So they would be the UConn Huskies pro basketball or semi-pro basketball team.

We both know school costs aren't rising to cover athletes. They're rising because of admin bloat and expensive buildings