Investing
Zoe Team
2 min read
The NCAA tournament significantly impacts the brand valuation of participating basketball programs.
Athletic success can drive increased revenue and national exposure for universities.
Finance professionals analyze tournament performance to estimate long-term athletic program values.
Successful tournament runs increase school exposure, leading to higher revenue and greater program prestige.
Valuations help universities understand the commercial impact and potential donor interest driven by their athletic departments.
While programs can generate significant revenue, the direct impact on academic funding varies widely by university structure.
With the Final Four on the horizon, we at Zoe were interested to see just how influential the tournament can be on the valuation of the participating basketball programs. The annual study by Ryan Brewer, an assistant professor of finance at Indiana University-Purdue University Columbus, analyzes each program’s revenues and expenses, with cash-flow adjustments and growth projections, to figure out the team’s market value.
An interesting take out is that less successful teams in higher-profile conferences can generate more revenue. For example, Tennessee is worth $80million, whereas Villanova is only worth $51million, even though Villanova won the NCAA National Championship in 2016, and Tennessee has never appeared in a Final Four.
Of 2017’s Final Four contenders, Oregon is still far from a Top 50 contender, with a valuation of $33million as of last year. Gonzaga’s and South Carolina’s appearances could propel them into the Top 30 for the 2017 valuation (these programs are currently ranked at 39 and 34 respectively). And North Carolina’s 20th appearance in the Final Four should only solidify its standing as one of the country’s most valuable basketball programs ($143million in 2016).
The concept of attaching a monetary value to something is as useful in personal finance as it is in basketball. It’s a simple way of assessing your current standing in order to set goals for where you want to be.
Do you know what your financial standing is? You probably have it in an excel spreadsheet somewhere that you filled out to get your mortgage. Having this clear picture is a great way to start the process of taking control of your personal finances.
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