It’s that time of year again. March Madness. What a perfect name for a phenomenon that has grown in popularity every year. Brackets storm workplaces, college dorm rooms, and high school classes. Bracketology has become a statistic based science with a number of analysts and writers claiming to have figured out the secret to a successful bracket. According to a study by the firm Challenger, Gray & Christmas, the first two days of March Madness will cause businesses to lose $134 million in lost productivity. About 3 million employees will spend three hours watching the games at work. It’s what makes college basketball so great. 68 teams, 34 games, with each team having a chance at the national title. Everyone can participate, and it’s much more fun if we get a chance to play along too.
All this attention and popularity generates a lot of money for the NCAA and colleges & universities with a basketball program. The following is a list of the Top Ten Most Valuable Collegiate Basketball teams in terms of revenue. But first, let’s take a look at how profitable March Madness is.
CBS and Turner pay the NCAA about $770 million dollars a year for the right to broadcast every single game. That’s 90% of the NCAA’s revenue for 2013. They signed a 14 year deal with the NCAA in 2010, worth $10.8 billion dollars. In 2011, March Madness generated $728 million in ad revenue, 20.2% more than in 2010, when the tourney brought in $613.8 million. In both years, CBS and Turner might have lost money since it costs $770 million to broadcast the tournament every year. Luckily, in 2012, they took in more than $1 billion. No other sport has reached $1 billion dollars for postseason revenue. According to Kantar Media, a media research specialist, the NFL generated $976 million in ad revenue in 2012. The NBA took in $537 million, and MLB: $354 million. In the long term, if the trend continues, the NCAA deal will be extremely profitable.
Ad prices for last year’s tournament championship game between Louisville and Michigan were $1.4 million per 30-second slot. In the same year, 30-second slots for the Superbowl cost up to $3.8 million, meaning that the 3.5 hour telecast generated $245 million in ad revenue. The Super Bowl is still king in terms of ad revenue generated from a single game.
Each team that loses in the first-round will have earned its conference $1.9 million. The winnings grow with each game played. Each team that makes the Final Four, having played five tournament games, will generate $9.5 million for their conference. This means that the tournament is a valuable source of income for basketball programs. Even small schools can enjoy immense profits. VCU spent $2.8 million on their basketball program in 2012. They ended up in the Final Four and generated $8.75 million for their conference which will be paid out in the course of a six year span, ending in 2017.
College basketball teams earn income from three
The following are the Top Ten Most Valuable Teams in college basketball. We’ll compare the value of teams in the 2011-2012 season and the value of teams in the 2012-2013 season. Both lists were compiled by Forbes. The overall revenue and expenses listed for certain teams is from 2011-2012 and was compiled by ESPN The Magazine. The ranking will count down the most valuable teams in the 2012-2013 season, but the top ten stays the same with a few minor changes. Duke swaps with Michigan State for the number ten spot for last season. Michigan St. was number ten for 2011-2012.
Hope you enjoy the countdown and good luck with your picks.
10. Duke Blue Devils ($18.9 million)
Duke is a #3 seed in this year’s tourney.
The Blue Devils are Duke University’s basketball team. They play in the ACC and are coached by Mike Krzyzewski, who has the most wins in college basketball (910). He earned $7.2 million in 2011-2012. Duke’s Cameron Indoor Stadium can hold 9,314. As mentioned in the intro, the arena is tiny compared to other college arenas and that results in Duke having a 100% attendance rate at all home games. They made $610,000 per game in profits for the year 2011-2012. Their revenue that year was $25.7 million and their expenses $15.9 million, which totals to a profit of $9.8 million. Their value that season was $17.1 million. That was a 31% decrease for 2010-2011. Duke’s drop can be attributed to changes in the athletic department’s accounting practices and the fact that no other team spends more than the Blue Devils. Only six teams generated more than Duke’s $25.7 million in revenue last year, but 11 teams had a bigger profit.
The current team value is $18.9 million, an increase of 11% from 2011-2012. Their profits that year were $10.6 million, an increase of $800,000. Five teams generated more revenue than Duke that season, but as previously mentioned, the profits are lessened by high spending. Only Louisville spent more than Duke in 2012-2013 and the two teams were the only ones that spent more than $15 million. No other team spent more than $14 million that year and only seven were above $10 million.
9. Syracuse Orange ($21 million)
Syracuse is a #3 seed in this year’s tourney.
I’m an alumni of Syracuse, so I’m extremely proud that they made the list. The Syracuse Orange basketball team generated $25.9 million in terms of revenue in 2011-2012, number two behind Louisville. Their expenses for the season were $14.2 million giving them a basketball profit of $11.7 million, an 8% increase from the previous year. Their value was $19.2 million that year. They generated $614,000 in profit per home game. The arena capacity for the Carrier Dome is 35,012 seats, the highest of any basketball arena in college. The average in season percentage of the arena filled was at 64.08%. This is the lowest out of all the teams, but that is due to the size of the Carrier Dome which also houses the football team. The basketball court is placed on one half of the football field and therefore one half of the football stadium can watch a basketball game.
The coach of the Orange is Jim Boeheim, who is second on the all-time wins list with 880 wins, behind only Duke’s Mike Krzyzewski. His yearly salary is $1.9 million. Syracuse played in the Big East for the 2011-2012 season, but currently is part of the ACC conference.
The Orange’s team value for 2012-2013 was $21 million, an increase of %10 percent from 2012-2013. Their profits for the season were $12.3 million. Four trips to the Sweet 16, and beyond, in the last five years contributed to $4 million in conference payouts last year. As a private school, Syracuse spends more on scholarships than any other team except Duke.
8. Wisconsin Badgers ($21.1 million)
Wisconsin is a #2 seed in this year’s tourney.
The Wisconsin Badgers are based in Madison, WI and play in the Kohl Center, which has a capacity of 17,230. They’re part of the Big Ten conference and are headed by 13th year coach Bo Ryan. The value of the team in 2011-2012 was $19.8 million, a 15% increase from the previous year and they made $11.5 million in basketball profits.
The Badgers current value is $21.1 million, an increase of 7%. They generated $12.7 million in profits for that season.
7. Ohio State Buckeyes ($22.9 million)
Ohio State is a #6 seed in this year’s tourney.
The Buckeyes are located in Columbus, OH. They play in the Big Ten conference, along with the two teams on our list: the Hoosiers and the Badgers. They totaled $18.9 million in revenue and incurred $5.9 million in expenses and came out with $13.6 million in profit. Their value in 2011-2012 was $23.1 million, a decrease of 3%.
They’re coached by 7th year coach Thad Matta, who made $3.2 million in 2011-2012. His team plays in Value City Arena which has a capacity of 18,809 seats and it’s filled 87.85% of the time on average. The program collected $646,000 in profit per home game that season.
For last season, the team’s value was $22.9 million, a decrease of 1% from 2011-2012. Their profits were $13.5 million, a decrease of $100,000.
6. Arizona Wildcats ($25.2 million)
Arizona is a #1 seed in this year’s tourney.
The Wildcats generated $20.3 million in revenue last year. Their expenses for the year totaled $7.9 million. They play in the McKale Center in Tuscan, Arizona and are a part of the Pac-12 conference. They are the most valuable team in that conference. The arena’s capacity is 14,538. They filled 97.37% of the seats for the season and they made a profit of $728,000 per home game. Their 5th year coach is Sean Miller who earns $2.5 million for coaching the team. They earned $20.3 million in revenue and incurred $7.9 million in expenses. Their profit for 2011-2012 was $12.4 million. They have increased team revenue by more than $2 million year after year due to increased contributions. The value of the team for that season was $19.5 million, a 6% increase from last year.
For 2012-2013, the Wildcats increased their value by 29%. That’s the second-highest increase of value for the season. Their current value is $25.2 million. And they generated $16.1 million in profits. The increase is most likely due to the Pac-12’s new TV deal.
5. Indiana Hoosiers ($25.4 million)
Indiana did not make the tourney this year.
The Hoosiers play for Indiana University in Bloomington, IN. They’re also part of the Big Ten conference and their coach is Tom Crean (6th year). Their arena is Assembly Hall which can hold 17,472. The current value of the team is $21.8 million, a decrease of 6% from the previous year. Their basketball profits for 2011-2012 was $14.4 million.
The Hoosiers made the tourney in 2012 for the first time since 2008, and the Hoosiers’ run to the Sweet 16 actually increased the team’s expenses for travel, lodging and staff and coaching bonuses resulting in a decrease in value for that year.
In the 2012-2013 season, the team generated $16.9 million in profits and has a current value of $25.4 million, a 17% increase from the previous year. The Big Ten conference collected $2 million from Hoosiers’ tourney games.
4. North Carolina Tar Heels ($25.7 million)
North Carolina is a #6 seed in this year’s tourney.
The Tar Heels play in Chapel Hill, NC as a part of University of North Carolina at Chapel Hill. A Tar Heel is a nickname applied to the state of North Carolina and its inhabitants. It is now more often used to to identify to UNC athletic teams, students, alumni, and fans. Just in case anyone was wondering.
UNC is part of the ACC and earned $24 million in revenues for 2011-2012 season. Three additional home games and the ACC’s TV deal with ESPN helped the Tar Heels to a 11% increase in basketball revenue, which surpassed $27 million that season. They incurred $7.2 million in expenses. The Dean E. Smith Center has a capacity of 21,750, which is filled on average 88.96% of the time. They generated $936,000 a game in profits. The total basketball profits were $19.9 million. Their value in 2011-2012 was $32.8 million, also an 11% increase. They are coached by Roy Williams (10th year), who earned $1.8 million for the season.
In 2012-2013, the team’s value was $25.7 million, a decrease of 22% from the previous season. They generated $14.8 million in profits that year. The decrease is due in large part to the team hosting two fewer home games last season, which reduced income from ticket sales. The team also lost revenue associated with playing the Carrier Classic against Michigan State.
3. Kentucky Wildcats ($32.5 million)
Kentucky is a #8 seed in this year’s tourney.
The Wildcats play in Lexington, KY as a part of the University of Kentucky. Their arena is Rupp Arena with a capacity of 23,500, filling it 98.29%. They made $360,000 profit from each home game and $21.6 million in overall revenue. Their expenses were $15.1 million. Their profit for the year was $19.9 million. And their value was $32.1 million, up 31% from 2010-2011. They’re have led college basketball in average home attendance seven straight years, which helped them claim the biggest increase in value of any team. The Wildcats play in the SEC.
They’re coached by John Calipari (5th year) who made $5.2 million that year. He was the highest paid coach in collegiate basketball. He’s been to the Final Four with three teams without any success.
For 2012-2013, the team’s value was $32.5 million, a 1% increase from last season. They made a profit of $20.4 million. The immense growth from the previous season leveled off in 2012-2013.
2. Kansas Jayhawks ($33 million)
Kansas is a #2 seed in this year’s tourney.
The Jayhawks play in Lawrence, KS for the University of Kansas at Allen Fieldhouse, with a capacity of 16,300 seats. They’re coached by Bill Self (12th year) who earned $3 million for the 2011-2012 season. Thier profits were $19.9 million. They play in the Big 12 conference. Their value for 2011-2012 was $32.9 million, an increase of 17%. Their current value (2012-2013) is $33.0 million, an increase of 0% and they generated $20 million in profits.
1. Louisville ($39.5 million)
Louisville is a #4 seed in this year’s tourney.
The Louisville Cardinals play in Louisville, KY for the University of Louisville. They are part of the AAC conference but will move to the ACC next year. They are the reigning NCAA tourney champs. They have a brand new stadium: the KFC Yum! Center which holds 22,800 and they made $1.35 million in profit for each home game in 2011-2012. Their total revenue for that year was $42.4 million with $15.5 million in expenses. Their profit for that year was $26.9 million. Their coach is Rick Pitino who was paid $4.9 million in 2011-2012. Their value was $38.5 million for 2011-2012, an increase of 7% and their current value is $39.5 million, an increase of 3% from 2011-2012. They made $24.7 million in profits that year.
This marks the third straight year that Louisville holds the top spot on the list. Revenue from ticket sales ($11.5 million) and contributions ($21.5 million), are two reasons for their financial success. The Cardinals also won last year’s NCAA Tournament, which gives the AAC a total $7.7 million over six years.