Earlier this week the WSJ provided an update to estimates of the economic valuation of college football teams produced by Ryan Brewer, a finance professor at the Indiana University-Purdue University Columbus. Brewer wrote a dissertation on the subject and the methodology is described in this paper (in PDF). This post provides a few visualizations of the data and a bit of commentary.
Because college football programs are not bought and sold on the open market, estimating an economic valuation requires making assumptions and applying a methodology. Necessarily such an approach will be far less satisfying than observing a price paid by a buyer to a seller. Nonetheless, Brewer's methodology provides a consistent and defensible way to look at valuation.
Under Brewer's method Texas comes out on top at $805 million. To convert that into a university metric, that amount of money could endow about 400 faculty positions ($100k per position, 5% return on endowment per year), or about 20% of the total number of faculty at UT-Austin. The University of Colorado, my employer, sits at #29 at $156 million. For a university with a billion dollar budget, this valuation does not seem particularly high, it is equivalent to the endowment value of about 78 faculty members, or in round numbers about 5% of the campus total.
There are 52 programs with a valuation >$100 million -- what might called big-time football programs. The figure below shows the breakdown by conference, showing that there are 2 big time conferences -- SEC and Big 10, 3 wannabe big time conferences, and 5 minnow conferences. The huge disparities suggest that the resorting that has gone on in football alignments in recent years might yet have a ways to run.