The most valuable franchises in North America's major pro sports leagues are well-documented. But, as private equity firms aim to enter college sports, what would valuations of the top athletic programs look like?
CNBC's Michael Ozanian on Thursday unveiled his rankings of the 75 most valuable college athletic programs in 2024. The list includes valuations ranging from around $150 million all the way up to $1.3 billion.
There are four athletic programs with a valuation above the $1 billion mark, led by Ohio State at $1.318 billion. The Buckeyes generated the most revenue of any program at $280 million, and Ozanian said football accounts for roughly 75% of the revenue at most of the big athletic programs.
The Texas Longhorns rank second with a valuation of $1.281 billion followed by the Texas A&M Aggies ($1.264 billion) and Michigan Wolverines ($1.062 billion). The Alabama Crimson Tide sit fifth at $978 million.
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Rounding out the top 10 are the Notre Dame Fighting Irish ($969 million), Georgia Bulldogs ($950 million), Nebraska Cornhuskers ($943 million), Tennessee Volunteers ($940 million) and Oklahoma Sooners ($928 million).
The other programs with a valuation above $900 million are the Penn State Nittany Lions ($924 million), USC Trojans ($923 million) and LSU Tigers ($916 million).
You can check out the full top 75 list below:
The rankings follow Ozanian's previous valuations of NFL and NHL franchises. So, how did he come up with the college edition?
Well, after speaking with sports bankers and people looking to invest into college athletic programs, Ozanian began calculating the valuations with a revenue multiple of four. For context, Ozanian said the revenue multiple typically ranges from around five to 10 for pro franchise valuations.
With an initial revenue multiple set, the figure was then slightly adjusted up or down based on a number of different factors, from TV revenue, size of alumni and fan bases, value of NIL deals, and whether a program is reliant on subsidies from students or the school.
The rankings are dominated by Big Ten and SEC programs, which Ozanian said is a reflection of the massive TV deals those conferences hold. Programs from the Big Ten and SEC make up 21 of the top 22 spots, with sixth-ranked Notre Dame being the outlier.
Ozanian noted two things that he was surprised by while putting together the list: how much money some programs get from donors and how little some programs make in areas like sponsorships, licensing and merchandise.
"I think that's one of the things private equity is looking at and why we did these valuations," Ozanian said, "because I think they're looking at the pros and saying, 'Geez, when you look at the interest in college football ... that passion and that fan base is there, we can make more money from these things.'"
The potential of private equity money entering college sports comes as the NCAA moves closer to finalizing a massive antitrust lawsuit settlement. The agreement would see the five biggest conferences would pay out $2.78 billion over 10 years to thousands of former and current athletes, while also opening the door for athletes to be paid directly by schools moving forward. Ozanian said investments from private equity groups could help programs with those future expenses.
But the idea doesn't exactly have unanimous support. In October, Big Ten Commissioner Tony Petitti and SEC Commissioner Greg Sankey came out together against pitches from private equity groups.
"I have yet to see a single thing in any plan that I've learned details about that contains things that we couldn't do ourselves and our A4 colleagues as well," Petitti said at the time, via ESPN. "At the end of the day, there's a strong commitment that you have the ability to do all of this ourselves.
"... The notion that college football is broken -- what we do is broken -- is just not right."
