Apparently, you can put a price tag on football

Apparently, you can put a price tag on football

Published Jan. 9, 2013 11:59 a.m. ET

It's no secret that college football is big business. But if you've ever wondered just how big, Ryan Brewer has provided a window into finding an answer.
Brewer, an assistant professor of finance at Indiana University-Purdue University Columbus, released his findings this week from a study that places valuations on college football programs as if they could be bought and sold like professional franchises. And the results are remarkable. 
According to Brewer's study, Texas is the most valuable college football program at $761.7 million. The Wall Street Journal noted that the Jacksonville Jaguars sold for $760 million in 2011, as a point of reference. Michigan ranks second in college football at $731.9 million, while no other program tops the $600 million mark. 
This year, Wisconsin was valued at $296.1 million to rank 17th in the country. Yet among Big Ten teams, that figure ranks just sixth behind Michigan, No. 5 Ohio State ($586.6 million), No. 11 Iowa ($384.4 million), No. 13 Nebraska ($360.1 million) and No. 16 Penn State ($300.8 million). Illinois was deemed the least valuable Big Ten program at $117.3 million, which ranked No. 48 overall.
Brewer calculated listings for 115 of the 120 FBS schools. Among the factors he examined were the size of a school's endowment, stadium size, age of the stadium, undergraduate population, revenue generated and expenses within the athletics department.
"Football drives the bus at all these big schools, which isn't surprising," said Brewer, who has an extensive background in dealing with the valuation of businesses. He worked five years as a risk management engineer for a Fortune 500 company before earning his Ph.D. from Indiana University in Bloomington, Ind., and becoming an assistant professor.
Brewer said one of his most unexpected findings was that even basketball bluebloods such as Kentucky and Indiana generated much of their revenue through football. Kentucky football, for example, is worth $202.7 million, while Indiana football is worth $142.7 million, according to Brewer. 
This marks the third year in which Brewer has conducted the study. He began researching as part of his dissertation at Indiana, which examined numbers from the previous seven seasons. That data involved the Great Recession, when the economy struggled from 2003-10.
"One of my findings was college football was recession proof, apparently," Brewer said. "People still came to the stadium, still bought spirit wear and tuned into advertising. I thought that was interesting myself. I didn't set out to find it, but it jumped out as a conclusion."
As for Wisconsin, the value of the football program continues to grow. In 2011, Brewer valued Wisconsin football at $153.3 million, which ranked No. 19 nationally. The Badgers recently won their third consecutive Big Ten championship and also played in their third straight Rose Bowl.
"Long term sustained on-field performance indicates value," Brewer said. "That's not rocket science. A team does well and after a few years, more people start to go to the games. They become more proud and buy more stuff, watch it on TV more. It takes a while. You end up with an enterprise.
"Wisconsin has gone to the Rose Bowl several times in the last decade. They've got sort of a machine there at this point. They're not on the level of the holy grail of the Southeastern Conference schools at this point, but they're really good."
Top 10 most valuable football programs, according to Brewer's valuations:
1. Texas, $761.7 million 
2. Michigan, $731.9 million 
3. Florida, $599.7 million 
4. Notre Dame, $597.4 million 
5. Ohio State, $586.6 million 
6. Auburn, $508.1 million 
7. Georgia, $481.8 million 
8. Alabama, $476.0 million 
9. LSU, $421.7 million 
10. Oklahoma, $454.7 million 

Big Ten
2. Michigan,  $731.9 million 
5. Ohio State, $586.6 million 
11. Iowa, $384.4 million 
13. Nebraska, $360.1 million 
16. Penn State, $300.8 million 
17. Wisconsin, $296.1 million 
21. Michigan State, $224.8 million 
35. Northwestern, $148.8 million 
38. Purdue, $145.1 million 
40. Indiana, $142.7 million 
42. Minnesota, $139.7 million 
48. Illinois, $117.3 million 

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