Brewer's study values the IU football team at $386 million.
(Devan Ridgway/WTIU News)
When Ryan Brewer, a finance professor at IU Columbus, started assigning a monetary value to individual college football programs, he said people reacted with confusion and skepticism.
“Why are we talking about the value of a football team in the college,” Brewer recalled people saying. “It’s just part of the college.”
But in the modern era of college athletics, with players being compensated beyond a scholarship — sometimes far beyond — and schools potentially looking to private investment to finance sports programs, Brewer believes assessing the value of a program becomes especially important. The Wall Street Journal recently featured his work.
Ryan Brewer is a finance professor at IU Columbus and was recently featured in the Wall Street Journal for his study of college football program finances. (Lauren Tucker/WTIU News)
The numbers are jaw-dropping. Ohio State University boasts Brewer’s highest-valued college football program at $2 billion.
Ohio State is one of nine college football programs valued at over $1 billion. The list includes all four semifinalists in the recent College Football Playoffs — Notre Dame, Georgia, Ohio State and Texas.
The study values Indiana football at $386 million and Purdue football at $279 million.
Brewer arrives at the valuations by analyzing team revenues, growth, cash flow and sustainability. NFL teams are valued the same way. The Indianapolis Colts, who are part of the richest sports league on the planet, are only about two-and-a-half times higher than Ohio State football.
Brewer, however, said his valuations might be too low because it can’t fully capture the pride of alumni or the inherent artistic value of a college football team.
He decided to focus on college football valuations after the state of Indiana sold tolling operations for an interstate and Ohio State University sold its parking operations.
Brewer said frequent player transfers in college sports make it for fans to connect with their team's players. The lack of player stability, Brewer argues, could undermine team cohesion and potentially damage college sports programs.
“If everybody agrees that players remaining at one institution for several years — not transferring indefinitely — is important, then what they could do is they could tie the money to a term contract," Brewer said. “You get the money, if you leave before then, you have to pay some of the money back.”
That gets to the issue of whether college athletes are employees of the university — something the NCAA has resisted for decades. If athletes are employees, they’re entitled to worker’s compensation for injuries and the ability to bargain collectively as a union.
“It's a good time to pause,” Brewer said of his work, “and think about how this future yellow brick road is paved.”
