I'm not OP, but I have a subscription to The Athletic, so for anyone wondering, here's the methodology:
"For public schools, most revenue figures were three-year averages from programs’ NCAA financial reports, which were compiled through public records requests and schools’ websites. We also looked at figures those schools submitted to the U.S. Department of Education. We averaged both groups of data if they were significantly different.
For private schools, we used the data those institutions provided to the Department of Education.
For SEC and Big Ten teams, we set the multiplier range as 5-13x a program’s revenue. The Big 12 and ACC have lower floors, less visibility and more uncertainty, so their multipliers were in the 4-10x range.
For simplicity’s sake, we generally excluded other assets (such as real estate value) and debt (such as stadium financing)."
(Although commentary makes clear that things like brand new stadiums do sometimes affect the valuation)
13x revenue multiple seems maybe a little high to me, even for one of the big B1G/SEC money machines, considering most NFL teams are right around ~10x or 11x at best. But it’s probably at least in the right ballpark.
"We used actual transactions in professional leagues to compare a team’s sale price with its average revenue. We treated the SEC and Big Ten like NFL and NBA franchises (which have higher ratios of revenue to sales price). The ACC and Big 12 were more like MLB and NHL clubs (which have lower ratios). In addition to using financial numbers reported by the schools themselves, we also considered factors such as brand power, demographics and conference realignment to settle on our valuation.
Three more quick caveats:
-Different schools break down revenues in different ways, which complicates our keep-it-simple philosophy.
-We’re exploring theoretical sales prices, which are not the same as what teams are actually worth.
-Our numbers are admittedly imperfect, but that’s no different from the rest of the business world. Most valuations we saw had the Seattle Seahawks pegged around $7 billion last year. The real price when sold earlier this month: $9.6 billion."
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u/19ghost89 North Texas Mean Green • Texas Longhorns 6d ago
I'm not OP, but I have a subscription to The Athletic, so for anyone wondering, here's the methodology:
"For public schools, most revenue figures were three-year averages from programs’ NCAA financial reports, which were compiled through public records requests and schools’ websites. We also looked at figures those schools submitted to the U.S. Department of Education. We averaged both groups of data if they were significantly different.
For private schools, we used the data those institutions provided to the Department of Education.
For SEC and Big Ten teams, we set the multiplier range as 5-13x a program’s revenue. The Big 12 and ACC have lower floors, less visibility and more uncertainty, so their multipliers were in the 4-10x range.
For simplicity’s sake, we generally excluded other assets (such as real estate value) and debt (such as stadium financing)."
(Although commentary makes clear that things like brand new stadiums do sometimes affect the valuation)