Re: Conference realignment thread v. 2016
Posted: Mon Aug 22, 2016 7:45 am
Fieldhouse Flyer wrote:Xudash wrote:
Look at this from a business point of view. It's a slam dunk.
I agree. A look from a business point of view necessarily entails a look at financial information – specifically, annual revenue and profit/loss.
Big East TV Contract: ($ 500 million) / (12 years) / (10 schools) = $ 4.17 million per-year, per-school
UConn's subsidizing of athletics jumps as other revenues sag – May 18, 2016The per-year, per-school average of the television contracts for the P5 leagues runs from $14.6 million (SEC) to $20.7 million (Big Ten). The Big 12 has a per-year, per-school average of $20 million in television revenue. What the Huskies generate via television rights, less than $2 million per year, is a pittance in comparison.
The financial impact of championship basketball – April 6, 2016Data that UConn submitted to the U.S. Department of Education shows that for the 2014-2015 academic year, UConn's men's basketball team, which has won the national title four times since 1999, cost UConn $8.6 million while it earned $9.6 million in revenue – a profit of $ 1.3 million. Expenses for the school's lower-profile football team were $ 14.2 million, which overshadowed its $ 8.3 million in revenue – a loss of $ 5.9 million.
With a 2015 Revenue of $ 9.6 million and a 2015 Profit of $ 1.3 million, UConn did not make the Forbes list of College Basketball's 20 Most Valuable Teams. Please note that in the excerpt below, I have intentionally omitted Team Values, as Forbes’ valuation methodology has not been disclosed.
College Basketball's 20 Most Valuable Teams - 2016 - Forbes - March 14, 2016)
Excellent post. Thanks for all the data. Great look at the business side.
Thinking like a university president, there's much more to this than just the business side of sports. Rising universities like UConn, aspiring to be academic powerhouses, see sports as just one piece of a much bigger profile. They are looking to develop their universities based on a model that defines the premier public universities around the country. That model is pretty much defined by the schools of the Big Ten and the PAC-12. These are universities which are committed to a pursuit of excellence. As part of their commitment to excellence is a comprehensive athletic department which is committed to the pursuit of excellence.
The real dollars that these university presidents are after is research dollars, which dwarf the revenue generated by athletics. So, any decisions that major research universities make with regard to their athletic programs will always be made within this context. As a result, rising aspirant universities will continue to fund athletic departments regardless of the fact that they are losing money because they are looking at a bigger picture.
We can look back 35 years to see this same dynamic operating. While there has been much handwringing over the harm to the long term prospects of the old Big East that was done by rejecting the application of Penn State, they were never going to be the savior that some fans hoped for. Their eye was always on the Big Ten and membership in the Big East was never going to change that. Universities want to associate with others like themselves, or what they'd like to be. That's what drives these realignment decisions even more than football as we have seen even with the new Big East.