Wall Street Journal values U program at $202.4 million, 38th in nation

[BleedGopher]

per Sid:

Gophers football valued

The Wall Street Journal ran an article last week breaking down the potential monetary value of college football teams, as if they were professional sports teams. The article looked at program revenue and expenses, then made cash-flow adjustments, risk assessments and growth projections for each school.

The Gophers ended up ranked 38th in the nation with an estimated value of $202.4 million. These kind of low valuations are one reason that the Gophers have had trouble hiring major sports coaches.

Their ranking was good for eighth in the 14-team Big Ten. Ohio State ranked first overall with a value of $1.1 billion, while Wisconsin was 16th at $415.9 million and Iowa 12th at $491.3 million.

http://www.startribune.com/sports/vikings/288936811.html?page=all&prepage=1&c=y#continue

Go Gophers!!

 

[bottlebass]

per Sid:

Gophers football valued

The Wall Street Journal ran an article last week breaking down the potential monetary value of college football teams, as if they were professional sports teams. The article looked at program revenue and expenses, then made cash-flow adjustments, risk assessments and growth projections for each school.

The Gophers ended up ranked 38th in the nation with an estimated value of $202.4 million. These kind of low valuations are one reason that the Gophers have had trouble hiring major sports coaches.

Their ranking was good for eighth in the 14-team Big Ten. Ohio State ranked first overall with a value of $1.1 billion, while Wisconsin was 16th at $415.9 million and Iowa 12th at $491.3 million.

http://www.startribune.com/sports/vikings/288936811.html?page=all&prepage=1&c=y#continue

Go Gophers!!

I have a hard time believing an article in the wall street journal that is completely hypothetical is preventing us from hiring a "major" coach. If coaches even care about articles like this I bet its pretty far down on the list.

 

[GopherHomer]

I have a hard time believing an article in the wall street journal that is completely hypothetical is preventing us from hiring a "major" coach. If coaches even care about articles like this I bet its pretty far down on the list.

Wait - don't we have the "Coach of the Year?"

 

[Gopherprof]

It'd have been nice to have a link to the actual article instead of just #sidtakes, but it's an interesting number. If that number is accurate, it is relatively low, and would make a decent argument that a lot of FBS coaches are overpaid. As much as a lot of people point the finger at obscene CEO salaries, many of them are running companies with a net worth of 100+ billion dollars and hundreds of thousands of employees.

In comparison, I ran a CEO compensation search for 2014, looking for CEO salaries of 2-3 million. Here's a few points of comparison:

-Speedway Motorsports (923 million market cap)
-Morgan's Hotel Group (451 million market cap)
-Bioscrip (3.3 billion market cap)
-1800 Flowers (1.4 billion market cap)
-Hub Group (1.3 billion market cap)

These were just the first five I picked out. If you haven't heard of any of them you probably aren't alone, as anything until a billion in market cap is considered a pretty small company (though 1800 flowers is ubiquitous because of their commercials, and also a total ripoff)

Anyway, some may reject the notion of a head coach as a CEO, and there's definitely a more specialized knowledge that makes them more unique than your average corporate exec. That said, if you want to compare them to a CEO, it's pretty clear that on average the market is overpriced relative to the size and value of the programs that most coaches operate.

 

[gopherfannnn]

A team is worth what somebody will/can pay for it.
The Gophers can't be sold, so this is a meaningless number.
Even when a team can be sold, the estimates are often wayyyyyy off.
Consider the LA Clippers. They were valued at $575 million, but sold for $2 billion.
Emotion and bias is involved in the buying of many things, and a sports team is definitely one of those things.

 

[Killjoy]

A team is worth what somebody will/can pay for it.
The Gophers can't be sold, so this is a meaningless number.
Even when a team can be sold, the estimates are often wayyyyyy off.
Consider the LA Clippers. They were valued at $575 million, but sold for $2 billion.
Emotion and bias is involved in the buying of many things, and a sports team is definitely one of those things.

Exactly - My accounting professor would say the only time you will know what something is worth is when it is actually sold or bought. Thus the only value of this thread is its entertainment value.

 

[RodentRampage]

I think a college football team were spun off into a private business, it would lose a lot of its value.

 

[Goldmember]

Exactly - My accounting professor would say the only time you will know what something is worth is when it is actually sold or bought. Thus the only value of this thread is its entertainment value.

Their valuation has a lot of utility for understanding each program's relative ability to generate revenue. And therefore, you get a sort of index for understanding how strong each program is (regardless of on-field performance). It is an idex for understanding the "arms race".

The greater their valuation, the greater ability they have to generate cash. And this cash should translate to some sort of competitive advantage (more pay for staff, facilities, recruiting budget, marketing). It doesn't always lead to wins on the field (i.e. Texas, Florida and Michigan), but over the long-term programs with a higher valuation should have more wins. It's why beating Michigan is always a very good thing even when Michigan is perceived to be "down". You are slaying a dragon, regardless.

There was a time when many people in Minnesota very foolishly believed that something like conference realignment could lead to Minnesota being left-out (due to several years of low-winning percentages). Valuations like this one, illustrate just how silly that belief is. Even if FBS football ends up with only three 16 super-conferences Minnesota is easily among that group just for its ability to generate cash from football alone. And football is certainly NOT even the schools best argument for inclusion at this point.

Almost everyone connected to the business-side of college athletics acknowledges that Minnesota Football has incredible growth potential. As a business, it was just so mismanaged and neglected for so many decades.

 

[diehard]

At least it is worth more than the new training complex.

 

[stocker08]

Does the article consider the size of the athletic program as a whole? Once again....it is likely that the non-revenue sports being supported by football, basketball, and hockey is bringing this number down. I wouldn't look too much into this.

 

[dpodoll68]

Does the article consider the size of the athletic program as a whole? Once again....it is likely that the non-revenue sports being supported by football, basketball, and hockey is bringing this number down. I wouldn't look too much into this.

How does Ohio St rank so highly with their 39 sports?

 

[stocker08]

How does Ohio St rank so highly with their 39 sports?

Try comparing programs that are actually comparable. OSU wins national championships in the main revenue generating sports and when they aren't winning national championships.....they are at least fielding top tier Big Ten teams.

Try again.

 

[dpodoll68]

Try comparing programs that are actually comparable. OSU wins national championships in the main revenue generating sports and when they aren't winning national championships.....they are at least fielding top tier Big Ten teams.

Try again.

That wasn't your argument. Your argument was that we have so many sports to support (when we're actually in the middle of the Big Ten in that regard), and that drags our ranking down. So why does it not drag Ohio St. down even further, when they have far more non-revenue sports to support than we do?

You try again.

 

[stocker08]

That wasn't your argument. Your argument was that we have so many sports to support (when we're actually in the middle of the Big Ten in that regard), and that drags our ranking down. So why does it not drag Ohio St. down even further, when they have far more non-revenue sports to support than we do?

You try again.

Where did you get this 39 sport idea from? Are you breaking each individual track event into it's own category? Penn State, Michigan, and Ohio State are the three schools in the Big Ten that support more teams than Minnesota....which would suggest that they are not in fact "in the middle".

Again....it's nonsense to compare Minnesota to Ohio State. The revenue producing sports for Ohio State are far more successful in recent history. They field successful teams year in and year out which would explain their ability to charge a premium for tickets.

Using one of the exceptions to make a point doesn't make you look brilliant.