Lexington, KY is college basketball’s financial epicenter.
Not long ago, UK’s John Calipari got a deal of a lifetime. Literally. He signed a contract that will make him Kentucky’s head basketball coach for the rest of his life. He’ll earn between $8 million and $9.2 million annually in an arrangement that runs through 2024.
The deal brought head shakes and eye rolls among those who don’t believe college coaches should be making that kind of money, Calipari included. But in today’s money-trumps-everything environment, it’s better to frame the situation this way: John Calipari is CEO of UK Wildcats, Inc., a publicly traded commodity on the NCAA Stock Exchange.
Courtesy: ESPN.com
And if Jim Cramer of CNBC’s Mad Money were to introduce Calipari on his show, he’d likely start by declaring Calipari to be the head man of college basketball’s most valuable franchise.
That designation is courtesy of Prof. Ryan Brewer of Indiana University-Purdue University, Columbus, an academic who calculates the relative worth of college teams. (Thanks, also, to Andrew Beaton of The Wall Street Journal, who does a great job of making the numbers digestible for public consumption.)
Brewer’s calculations include valuation ups and downs, just as it would if he were following companies listed on the New York Stock Exchange. According to Brewer, UK basketball is currently worth $334 million, a whopping 36% increase from last year. That valuation makes UK a good buy, especially when you consider that the average gain across major college basketball-playing universities increased by only 9.3% this year.
So, fans, think again if you believe Calipari is overpaid. He’s worth every dime if you buy Brewer’s calculations. Even if you don’t, other numbers tell the big-money tale of contemporary college basketball.
Take, for example, the selling of March Madness. According to Forbes, the NCAA received over $770 million for selling media rights this year, and CBS and its partners sold almost $1.5 billion in advertisements.
That makes the college basketball tournament the most profitable post-season activity among all sports.
The interesting thing about UK’s king-like standing is that Kentucky didn’t make this year’s Final Four. That tells you there’s more to financial worth than what a team does on the court. Value includes the size of the fan base, merchandise sales, the number of national TV appearances, how many fans watch when a team appears on TV, etc.
In fact, UK’s worth dwarfed the value of this year’s Final Two—the University of Virginia (ranked #36 at $64 million) and Texas Tech (ranked #62 at $42 million). The two other Final Four contestants–Michigan State and Auburn–ranked 20th and 52nd respectively.
Kansas ranked #2 in overall team worth (photo, KSNT.com)
As you might expect, teams from the so-called ‘Power Conferences’ (SEC, ACC, Big 12, Big Ten, and PAC-12) dominated the top of the 2019 valuation list. The ACC had four teams listed in the top ten—Louisville #3, Duke #4, Syracuse #6, and UNC #7.
The PAC 12 and Big Ten each had two teams each–the PAC-12 with UCLA at #8 and Arizona at #9, and the Big 10 with Indiana at #5 and Wisconsin at #10.
The SEC and Big 12 each had only one team represented. But, worthy of note, those teams were the top teams nationally in worth terms—the aforementioned #1 UK (SEC) and #2 Kansas (Big 12).
‘Brand’ has a lot to do with how Brewer’s calculations turn out, and what happens off the court has an impact. So expect Arizona’s worth to fall in the wake of the FBI’s bribery probe and subsequent convictions.
In money terms at least, ‘the good ole’ days’ for major college basketball coaches weren’t years ago. They’re today. Just ask John Calipari. He’s smiling from ear to ear.
Courtesy: The Rural Democrat
