The Wall Street Journal has just published an intrinsic valuation of 115 FBS teams, giving the value of each team if it were up for sale.
The valuation basically takes a look at how much profit a team brings in each year, and figures out a price that someone would most likely be willing to pay for it.
From the Wall Street Journal:
“According to an annual analysis of the values of college-football programs, Texas remains the most valuable team in the sport. But the gap is narrowing: The Longhorns—whose 2011-12 valuation is $761.7 million—now are only slightly ahead of Michigan ($731.9 million).
Ryan Brewer, an assistant professor of finance at Indiana University-Purdue University Columbus, calculated the intrinsic valuations for 115 of the teams in the top-tier Football Bowl Subdivision.
Among other factors, the study looked at each program’s revenues and expenses and made cash-flow adjustments, risk assessments and growth projections for each school.
The resulting figures represent what the teams might fetch if they could be bought and sold like pro franchises. (As a point of reference, the NFL’s Jacksonville Jaguars sold in late 2011 for about $760 million.)
Texas still generates the most revenue in college football, but Michigan’s valuation surged 18% over the year before because of improved cash flow, Brewer said.
Texas’ valuation fell by 5%. As for Monday night’s title-game combatants: Notre Dame ranked fourth in the financial study ($597.4 million); Alabama was eighth ($476.0 million).”
Paul Hudson | Elite.