Today Forbes magazine released its list of the 20 most valuable college football teams.
The profit margins on these teams -- which I've ranked below based on Forbes data -- are insane.
One of the biggest legal issues that has to be resolved in coming years is this -- should revenue and non-revenue sports be treated the same? Because right now you have two sports that make money at many schools -- football and men's basketball -- and every other sport loses money.
Many now feel that football players and men's basketball players deserve compensation based on the value they provide over and above the cost of their scholarships and the limited cost of attendance stipends. But instead of receiving payment for their talents right now football and men's basketball players see the revenue they produce spent on scholarships for other athletes, those in sports where the market would never pay for them to exist. So every other sport on a college campus, whether it's men's and women's tennis or swimming or soccer, exists thanks to the money produced by football and men's basketball.
The end result is that most college athletic departments either break even or lose money. The profits from football and men's basketball are eaten up in scholarship costs for sports that lost vast sums of money.
If the market value is ever unlocked for football and men's basketball players, what it would really mean isn't just that these athletes would be paid, it's that other scholarships would have to be cut to pay for football and men's basketball players.
All of that, of course, is interlocked right now with Title IX, which requires equal scholarships for men and women. Every year men's football players receive 85 scholarships. This means that the biggest beneficiary of the money unlocked by football is women's athletics, which not only receives much of the profits from football through scholarships, it also receives 85 additional scholarships. Several months ago one of you emailed me an interesting legal question -- is football really a men's sport? It sounds absurd on its face, but theoretically women are able to receive football scholarships too, right? They just aren't receiving them because men are better at football than women. But if we're purely focused on opportunity, don't women have the same opportunity to play football as men? Should we be equalizing numerical outcomes or equalizing opportunity? (This, honestly, is a big part of the Supreme Court's current affirmative action jurisprudence.)
The larger question, however, remains this -- will revenue and non-revenue producing sports remain considered equal under the law as anti-trust cases wind their way through the courts? Because when we do create equality between revenue and non-revenue producing sports what we're creating is an artificial equality that isn't supported by market realities. It's plainly not that case that a men's high diver and a men's quarterback have the same market value. So why should the market talents of football and men's basketball players go to support the lesser talents, from a market perspective, of other scholarship athletes? This is college sports socialism, the talented are taxed at an insanely high rate to support those that have less market value.
I haven't read anyone discussing this aspect of the lawsuits that have been filed based on football and men's basketball players.
On to the top 20 most profitable football teams in the country.
1. Texas $92 million
2. Tennessee $70 million
3. LSU $58 million
4. Michigan $56 million
5. Notre Dame $54 million
6. Georgia $50 million
6. Ohio State $50 million
8. Oklahoma $48 million
9. Auburn $47 million
10. Alabama $46 million
11. Oregon $40 million
12. Florida State $39 million
13. Arkansas $38 million
13. Washington $38 million
15. Florida $37 million
15. Texas A&M $37 million
17. Penn State $36 million
18. Michigan State $32 million
19. Southern Cal $29 million
20. South Carolina $28 million
If you want to see the revenue numbers, check out Forbes. But, needless to say, these profit margins are staggering. Tennessee made $70 million in football profit off of revenue of $94 million. That's insane.
By conference there are 9 SEC schools, 4 Big Ten, 3 Pac 12, 2 Big 12, 1 ACC school and 1 independent school in the top 20.
Or another way of looking at it -- all of college football combined has 11 of the most profitable teams in the country and the SEC by itself has nine.
