Study: IU basketball is nation’s second most valuable program

  • 04/02/2018 9:25 am in

Although its overall value declined, Indiana basketball is the nation’s second most valuable program, according to a study published by The Wall Street Journal.

After coming in fourth in the study released 2016 (2015 data) and third in 2017 (with 2016 data) in Ryan Brewer’s annual rankings of the country’s most valuable college basketball program’s, IU moved up to second in this year’s study, which includes 2017 data.

The study was published on Monday morning by the The Wall Street Journal (paid link).

Indiana was valued at $243.8 million in 2015, a record $277.8 million in 2016 and $243 million in 2017. This year’s valuation represents a 12.5 percent decrease from last year. In 2014’s study, Indiana was eighth nationally at $199 million.

Kentucky, valued at $246.6 million, topped the valuation study and Louisville, valued at $233.6 million, was third.

The values are assigned using factors that determine what a program would be worth on the market if it could be sold like a professional team. Among those factors: expenses, revenue, cash-flow, risk assessments and growth projections.

Brewer is an assistant professor of finance at Indiana University-Purdue University Columbus.

Here’s how the other Big Ten programs came in on the list:

6. Wisconsin – $160.6 million (down 10.2%)
8. Ohio State – $143.3 million (down 19.4%)
10. Maryland – $131.8 million (down 14.8%)
12. Purdue – $103.2 million (down 26.5%)
13. Illinois – $100.7 million (down 20.6%)
14. Northwestern – $100 million (up 7.3%)
17. Michigan – $95.4 million (down 1.9%)
18. Minnesota – $91.4 million (up 17.4%)
26. Michigan State – $68.2 million (down 25.8%)
29. Iowa – $63.8 million (up 5%)
32. Penn State – $62.4 million (down 2.9%)
48. Nebraska – $45.6 million (down 4.2%)
75. Rutgers – $31 million (up 7.8%)

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  • TomEke

    I wanted to give a shout out to RoJo (and his B1G teammates) for winning the 3 on 3 tournament this weekend. Kudos to Robert Johnson for hitting the game winning 3 pointer in the championship game. I’m not sure if ITH plans to write an article about this, but I’d love to get RoJo’s thoughts on the weekend.

  • TomJameson

    Alex, did the article mention (or do you know from other sources), why IU’s value declined this year? My uninformed guess would be that the lack of success of the men’s BB team has to be the biggest factor.

  • HoosierBballNut

    Although Cash Flows went up, majority of the values tumbled because of the situation surrounding College basketball as an industry – amateurism, FBI investigations etc. Hope this helps 🙂

  • Oldguyy

    An IU-specific cause like that can’t be the biggest factor, because its value did not decrease relative to the other programs; in fact, as the article states, it went up relative to the others.

  • sarge

    Big Ten won the 3vs3, the NIT and have Michigan in the national championship game. Not to mention the women made it an Indiana sweep of both tournaments. I am pretty excited with how things are shaping up. RoJo is the man, great defense in those 3vs3 games and hit 3 game winners. Dude is a stud, can’t wait to see how he does professionally.

  • TomJameson

    I did not read the article as it was a pay site. but in just the B1G teams listed, 4 of those values increased, and by decent margins (5% to 17%). So the IU value couldn’t have gone up relative to ALL the others. 🙂

  • TomJameson

    It does help, thanks. I was focusing more on the “risk assessments and growth projections”.

  • Koko

    I’d bet if Romeo decides to come to IU that growth projection
    will go up. Changes in the viewing habits of young people only
    means that. Take those empty student seats at IU and put them up for sale to the public and they’d be gone in hours…Romeo or no Romeo. The “massive” turnover
    for IU this season is one player. The rest of the players leaving are seniors.
    Isn’t that what a lot of people want?…..more 4 year players?
    When something changes people inherently want to know why….but coming up with endless whys does not change anything if the whys are incorrect….or not even close. College athletes are not going to be paid money to play college sports….they are students not employees. And frankly that is the bottom line.
    You want to strengthen those weakened connections between fans and players?….win more games. I really don’t see how Max Bielfeldt’s transfer weakened Michigan’s fan/player connection and as we know Max became a beloved IU player. There are a lot of reasons the value dropped 12.5%….property values?…..incorrect risk assessments? It could on and on.
    If they want to reverse that 12.5% slide….WIN GAMES!

  • Arch Puddington

    A fantastic rant in support of a thesis contradicted directly by the numbers on this very page. The two teams that won the most this year experienced the biggest drops:

    MSU: 30-5, B1G regular season champs: -25.8%
    PU: 30-7, ranked in the top 5 for much of the year: -26.5%

    Yes, if Romeo comes here and IU begins winning big, our value will go up. But we have a particularly durable fan base; the sport as a whole is experiencing declining attendance and viewership regardless of winning. Even schools like Kentucky and UNC are seeing declines in attendance, and while the NCAA tournament continues to be popular, regular season games are less so.

    And your comment about our only losing one player is a triumph of non-representative reasoning. Upwards of 1000 players transferred last year, or nearly three per team, and several dozen of the marquee players in the sport left early for the pros. You will note that but for early departures, this year we would have had James Blackmon, Thomas Bryant, and OG Anunoby. If you think that losing roughly 1/3 of the non-senior players every year, including most of the really popular players, does not hurt the sport, you are ignoring plain reality. Not all of that can be fixed, but that it is a factor in all this is indisputable.

  • Our value decreased and yet we moved up a spot. That’s all you need to know.

  • Let those players who want to get paid go straight into professional leagues — and that’s all on the NBA. Maybe this G League move by the Syracuse recruit will kick off that trend. Then, those players who go to college will be more consistently real student-athletes, that is, actual representatives of the student body in intercollegiate athletics. Universities exist to provide educations, not to run professional sports leagues, and paying players would change none of the corruption — it would only make it even harder to hide.

  • inCMitrust

    Valuations on average declined 7.8%. Kentucky with the no. 1 valuation declined 28%. Success of the team would have very little to do with a year on year valuation change.

  • RDD#76

    Defensive stopper that can shoot the 3 could make a teams roster.

  • Hoosier Hall

    The MSU decline is an easy one to explain (scandal, scandal, scandal….) but I can’t quite put a finger on the Purdue decline. They’ve had their best 2 seasons in a long time. Obviously the FBI investigation has hit almost all schools and I believe IU would have declined much more if not for the coaching change.

  • inCMitrust

    There are lots of avenues for the players to receive some spending money that does not involve schools paying the players. I believe some methods would not hurt the game, of course kids who want to go pro should be able to go out of high school.

  • Arch Puddington

    The MSU scandal didn’t hit until February, and I doubt seriously that a coach as established and beloved as Izzo, heading a team contending for a national championship, would lose a fourth of the program’s value in 6 weeks because of a scandal that mostly relates to gymnastics. I’m sure things like that don’t help, but the decline experienced by the sport in general pre-date the FBI investigation and all the rest by a good bit. Heck, UNC’s attendance went down this year AFTER being let off the hook by the NCAA — and after winning a national championship! It’s just a different sporting and entertainment world than it used to be.

  • Koko

    How would the other sports you mentioned get paid? They won’t.
    Most of them would be discontinued so as to pay the Bball and football players.

  • inCMitrust

    Success of the team is a small part of the valuation.

  • Ole Man

    Can you imagine the lawsuits?
    Like I said, can-of-worms.

  • Calhoosier Deck

    R Johnson and defense lol

  • Ole Man

    What avenues?

    And there-in, again, the bigger schools would be able to offer more of those “avenues”; of that I am certain.

    As someone mentioned in this thread, all that would entail a different type/level/re-focus of the cheating.
    If wouldn’t stop it.

  • inCMitrust

    Bigger schools already have all the advantages, so that would not change. One method would be to get a small portion of jersey sales. Another would be if an agent thought a player had pro potential he could forward money to the player. I admit there would have to be some stringent rules for this to work. I would add that a player should only receive a stipend while playing with the rest in a trust until eligibility is used up. Change is coming. I just don’t want it to hurt the only sports I watch.

  • sarge

    How is that funny? What are you even trying to say?

  • inCMitrust

    If the schools aren’t doing the paying I don’t see why it would hurt the other sports.

  • inCMitrust

    Any changes that would be made would be to all sports. Example-The excellent female swimmer at IU(can’t think of her name) would not have to choose between staying an amateur at IU or receiving endorsement dollars which she obviously would with her Olympic success. She would receive some spending money with the rest in a trust until she gives up her eligibility.

  • Koko

    That would open an even bigger can of worms that Ole Man is talking about. Where then would the players loyalty’s lay….in their school or the companies that would be paying them? Besides some rules are going to be changed over the summer ie:…one and done rule, some sort of minor league/recruiting process similar to baseball. These changes are coming in one form or another. No need for outside sources to pay the players while in college in my opinion.

  • Koko

    Not okay to trash RJ…..your comment is without merit.
    And how is your defense?

  • inCMitrust

    I hope the changes you mention happen and I hope they take care of some of the problems. I just happen to think the band aid approach is not going to be enough.

  • Koko

    I think we will see some changes by the end of summer.
    But I don’t think paying athletes will be one of them.

  • Arch Puddington

    Double digit losses for most of the programs, including almost all of the B1G’s most prominent programs. Even MSU and Purdue, both of whom spent most of the year ranked in the top 10 and were seen as legitimate Final Four contenders, were down. All the usual suspects here — significant changes in the viewing habits of the public, especially young people, 24/7 competition from other sports and entertainment, and, I would argue, the ongoing impact of the massive turnover in team rosters — are factors. I’ve read some people claiming that “one and done” isn’t really a problem for college basketball because only a few players actually get drafted after just one year, but that misses the fact that dozens leave early whether they get drafted or not. Add to that number the hundreds who transfer every year, and what you are left with is a weakened connection between fans and the players and teams they root for at just the moment the sport needs that connection more than ever.

    Of course it’s not just college basketball. Even the titan of sports leagues, the NFL, is down in terms of viewership and attendance (although the values of the franchises do not seem to have taken a hit just yet). But in a world with this much competition for eyeballs, clicks, and fannies in the seats, college basketball cannot afford to continue on as it has in recent years if it is to remain a premier sport with lucrative TV deals and high attendance. Paying players a reasonable stipend is one part of the solution, but it will take more than that. Ending the entire charade surrounding “amateurism”, allowing the players to benefit from their talents and marketability beyond scholarships, allowing athletes to get academic credit for their training and performance like musicians and thespians, and other fundamental changes will be necessary to give athletes a reason to stick around and develop. Let them have shoe deals, outside endorsements, and anything else that makes it worth their time to stay in school all the way until graduation unless they are truly first round picks with guaranteed money. That will be better for those who will likely have to earn a living other than through sports, and good for the programs who need stable commitments from players and fans to keep whatever appeal they still have.

  • WhatsUpKnight2.0

    not sure why i’m coming to koko’s aid because he routinely hurts my feelings when he refers to me as dorkboy, but i think his point is PU’s dip might have sunken several more percentage points if their record was, for example, 23-14. not sure he was implying more wins was the cure-all. then again i could be wrong. we are, after all, talking about koko! 😉

  • Koko

    My point is more wins would be a major factor in rising above that 12.5% dip. Nothing esoteric or hard to read and assimilate. Also if you want to look at it from the point of view us being a pro franchise and use the points the professor uses, I would think real estate values play a major part of the value of a team or in this case university in terms of buildings and property used for athletics and also value of equipment etc. Possibly those values went down this past year???

    Now if you don’t like being called dorkman then don’t tell me you are a dork. And if you are serious about being hurt by me calling you dorkman, I will stop. And your comment….”after all we are talking about Koko” is a pretty low comment as well. If you want to continue on with comments like that I will be sure to continue to call you dorkman…..your choice.

  • WhatsUpKnight2.0

    so then i was correct in my defense of your rant. you’re welcome!

    but wait a sec, how come arch gets dubbed ‘professor’ and i’m still stuck with ‘dorkman’?? no fair!

  • Koko

    I was talking about the assistant professor, Ryan Brewer.
    Not Arch. Stop referring to yourself as a dork and you probably won’t be called dorkman.

    I thanked you with an up vote.

  • Ole Man

    While there is a need for changes, I humbly disagree that any type of payment to players is needed or desired.
    It’s a slippery slope which would lead to “professional organizations” offering a poorer quality of what is already available to the public by other organizations such as the NBA.
    Plus, the can-of-worms, the rich can afford to pay better than the poor, would be opened.
    Lastly, what about all the other collegiate sports? Women’s basketball, fencing, swimming and diving, etc? How do they get paid?

  • coachv

    could this guy who did the study be any less qualified? asst. prof at iupu columbus? whatever clickbait. i would give more veracity to such a study if it were done by puddington or bball. or just about anyone, really

  • coachv

    how much would you consider a reasonable stipend?

  • coachv

    outside of men’s basketball and football, all other college sports lose money, and lots of it. revenue from basketball and football allow those sports to exist, as most of us know.

  • coachv

    iu’s value did not decline. the study is a make believe premise, with make believe numbers, and make believe rankings

  • coachv

    i can crunch fritos. that’s about it

  • It looks like some of the marginal B1G teams went up, which makes sense because they’ve been coming on stronger of late. Northwestern is probably the best example. But for the market overall, especially at the top end where the programs are already more established, if your value falls but you gain a position then that can only mean the entire market is down.

  • Koko

    Rant?….are you serious? So there is noting but substance in what you say and what I say is nothing more than a rant? Now why would you say that? Are you the final answer on all this? You are the authority that all should believe and agree with? Come down off of your ivory tower and read Mark Coppock’s comment to you.
    Win more games is a pretty simple idea which it appears is way too simple for you.

  • inCMitrust

    Your right he only has an MBA and PH.D. from IU with a specialty in business valuations amongst many other accolades. A complete dumbass. I can’t believe the Wall St. Journal would print something he wrote.

  • Calhoosier Deck

    My defense was pretty good.But it was about Robert Johnson that played pretty poor defense for 4 years.Not trashing him,it s just a fact.The guy was never associated with good defense.Sorry if I hurt your feelings.Good luck Robert Johnson hope he makes a team.

  • TomJameson

    Okay … markets up, markets down …. etc. etc. etc…

    I was focused on IU, not the market. But that aside, each (independent) valuation was based on several factors, each unique to a specific school (expenses, revenue, cash-flow) Some may argue about the risk assessments and growth projections not being unique to the school, but I would argue just the opposite.

    Yes, the “market” is down, but evidently that didn’t affect Northwestern, Minnesota, Iowa, and Rutgers. While I can see where the overall impression of the state of college basketball in general could cause overall evaluations to be down, other than the pay-for-pay scandal, that “state” has been down for quite a while.

    I’d also go out on a limb and say the pay-for-pay idea has been around for a long time. And even thought the FBI investigation brought it to light, I would also venture to say the “reverberations” haven’t been too major, in the whole scheme of things.

  • Koko

    Thanks for answering me. Why don’t you answer sarge while you’re at it.

  • Ole Man

    Agents are increasingly a problem now.
    I fail to see how licensing their misbehavior helps any problems.

  • Ole Man

    Except RJ’s D wasn’t poor for four years.
    And this past season he was the stopper on the team.

  • TomJameson

    “Values are assigned using factors that determine what a program would be worth on the market if it could be sold like a professional team. Among those factors: expenses, revenue, cash-flow, risk assessments and growth projections.”

    The values mentioned in this article are real numbers, using a real premise, to asses a comparison value for all teams and colleges.

  • inCMitrust

    Agents aren’t going away and they will keep going after the kids and their families. If it is above board it may help or may not. Agents were a problem when I was in school and that was a long time ago. I remember a star receiver at IU that miraculously showed up one week with a brand new Porsche and his girlfriend with a new Supra(paid for by agent). Agents have been around along time and will probably keep muddying up the system.