A topic that came up at the NIL Summit in Atlanta was the value of revenue sports programs at big schools. Imagine if the football program could be separated from the school and athletic department, and available for sale like an NFL franchise, what would it be worth?
A few of us began to spitball the idea of valuing the Michigan football program. There are many challenges in this exercise because, for starters, much of the value of the Michigan football program is its association with the school, and its logos, trademarks, reputation, etc. On the other side, it’s easy to make the case (see Dr. Daniel A. Rascher’s work) that the value of major programs adds revenue to schools through increased brand exposure, heightened admissions, and enhanced school/medical fundraising. But you get the idea.
I’ll take a more narrow look at one key input into valuing any entity–the revenue side. How much money flows into the athletic department directly or indirectly as a result of the Michigan football program?
We’re about to see the athletic budget for the upcoming year, scheduled to be approved at the June 15 meeting of the U-M Board of Regents. While we don’t have that yet, we do have the budget approved last June to use as a baseline.
For my EDUC 335 Name, Image & Likeness course I attempted to come up with the amount of the budgeted revenue derived (directly and indirectly) from the football program. Stringing together ratios and detailed definitions published in previous budgets here is what I came up with, click to enlarge:
In a nutshell, I arrived at around 76% of the $202M budget being attributed to football, or a little over $153M. The key driver here is the “football weight” column, and I explained where this info was grounded in data in previous reports, and where it was just a thumb-wave and swag (guess).
This is just an exercise with a few broad assumptions. And again, it’s hard to remove the baby (Michigan) from the bathwater and bathroom (U-M school/hospital proper). Nonetheless, consider this food for thought.
