BYU Football Worth $136 Million?

According to the Wall Street Journal last year, BYU was the #43 most valuable football program in college football, worth a surprising $136 million:



http://s.wsj.net/public/resources/images/OB-VW798_COUNT0_G_20130106200910.jpg" alt="" loading="lazy" style="max-width:100%">



http://online.wsj.com/news/articles/SB10001424127887324391104578225802183417888" onclick="window.open(this.href);return false;



BYU was not included in the most recent update as apparently they are no longer a "major" football program.

http://online.wsj.com/news/articles/SB10001424052702304887104579302752525141772" onclick="window.open(this.href);return false;



i emailed the author.

BYU's stated football-specific revenue is down from $22 million last year to under $19 million this past year. These are the actual raw revenue numbers that BYU self-reported; their revenues dropped by 13.6%. This year, BYU came in on the valuation rank at #56, at $87.5 millioon.



Thanks,











Ryan M. Brewer, Ph.D., M.B.A.

Assistant Professor of Finance

Indiana University

Division of Business

Indiana University Purdue University Columbus

4601 Central Avenue

Columbus, Indiana 47201

office: 812.348.7253

Scott,



I'm surprised too, and it's surprising and certainly worthy of questions. There are always a few key surprises every year I do this analysis, and one of the keys is that to value any business (private, publicly traded, or even college football nonprofits...), one must begin with good accounting information!



I tell you, I could use audited financial statements, but the numbers are what they are. I think another - and in all seriousness, a bigger - point is that the numbers are only compiled and reported once per year. So, without interim reports, it's tougher to track the up-to-date economic activity. Plus details and notes would be of interest, and we see less of those with the nonprofits versus the SEC-regulated S&P type firms.



Thanks for your questions, and I'd be happy to send you a few articles I published on this over the past few years. Remind me later and I'll be happy to send them your way. Right now my campus is closed due to the deep freeze we're currently in.



Thanks again for your interest,



Ryan

Maybe we played too many road games.

Cougarbib wrote:
Maybe we played too many road games.

2013 and 2012 both had 6 games away and 6 at home. BYU probably got a decent payout at ND and WI, ND is a wash both years as they were the consistent team.....would GT pay more than WI.



It would be interesting to see what makes up revenue. Was attendance down? Did they TV deal change at all or were there any kickers/incentives that were missed? Are football related product sales the difference? The bowl payout in 2013 increased ($850k vs $500k), did BYU eat ticket sales? Were revenues realized different with ESPN 2012 vs 2013?

NDCougar wrote:

Maybe we played too many road games.

2013 and 2012 both had 6 games away and 6 at home. BYU probably got a decent payout at ND and WI, ND is a wash both years as they were the consistent team.....would GT pay more than WI.



It would be interesting to see what makes up revenue. Was attendance down? Did they TV deal change at all or were there any kickers/incentives that were missed? Are football related product sales the difference? The bowl payout in 2013 increased ($850k vs $500k), did BYU eat ticket sales? Were revenues realized different with ESPN 2012 vs 2013?

I was kidding about the road games. I think the real issue was a huge drop in Jake Heaps Jersey sales at the BYU Bookstore.



;)

I'm not positive which year the data came from. It might be too early for 2013 numbers so maybe we are comparing 2011 to 2012. 2011 had the money game with Ole Miss in it.

scott715 wrote:
I'm not positive which year the data came from. It might be too early for 2013 numbers so maybe we are comparing 2011 to 2012. 2011 had the money game with Ole Miss in it.

Makes sense. We were at Ole Miss, at Texas, TCU in Cowboy stadium, at Oregon State and the bowl game paid $1.2mm vs $500k at the Poinsettia bowl.

scott715 wrote:
BYU's stated football-specific revenue is down from $22 million last year to under $19 million this past year. These are the actual raw revenue numbers that BYU self-reported; their revenues dropped by 13.6%. This year, BYU came in on the valuation rank at #56, at $87.5 million

Wow. One disappointing 9-4 season, and BYU football gets devalued by 37.5%?? And that derived from a ~14% drop in revenues? Dropped the valuation $48.6 million.



How would you feel as an investor if your stock took a 37.5% bath?

snoscythe wrote:

BYU's stated football-specific revenue is down from $22 million last year to under $19 million this past year. These are the actual raw revenue numbers that BYU self-reported; their revenues dropped by 13.6%. This year, BYU came in on the valuation rank at #56, at $87.5 million

Wow. One disappointing 9-4 season, and BYU football gets devalued by 37.5%?? And that derived from a ~14% drop in revenues? Dropped the valuation $48.6 million.



How would you feel as an investor if your stock took a 37.5% bath?

That is why college programs pay big bucks for their coaches, if there is excitement they spend more money and attend games. Having the wrong coach does not just hurt you on the field but the wallet. Even though Mack Brown is gone, look at the increase in revenues in his time at UT....unbelievable he deserved every penny he made IMO.

Pretty sure the loss in value is attributable to Airwolf refusing to buy any more $7 burritos.... ;)

snoscythe wrote:

BYU's stated football-specific revenue is down from $22 million last year to under $19 million this past year. These are the actual raw revenue numbers that BYU self-reported; their revenues dropped by 13.6%. This year, BYU came in on the valuation rank at #56, at $87.5 million

Wow. One disappointing 9-4 season, and BYU football gets devalued by 37.5%?? And that derived from a ~14% drop in revenues? Dropped the valuation $48.6 million.



How would you feel as an investor if your stock took a 37.5% bath?

Check AMRN. That was even worse. FA basically decided that although their drug was proven to reduce tryglicerides significantly - it was not clear that reducing tryglicerides really reduces risk of heart disease.



BAM minus 80% or so in a day or so. That was in about November.



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PS



the value of BYU Football has not dropped 37% in one year. This just puts a huge spotlight on a big flaw in his model. Sure -valuation is based on revenue streams. Not this year's or last year's or the last decade.



The value is based on FUTURE revenue streams adjusted for present valuation of those future streams. Current and past revenue streams may be useful to predict future revenue streams, but when the valuation swings this much without some obvious future issue popping out, either year1 or year 2 or both were valued incorrectly.



Predicting the future is key to any valuation.



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Wasn't attendance down this year? I know ticket prices weren't.



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Gunk wrote:
Wasn't attendance down this year? I know ticket prices weren't.



[ Post made via Mobile Device ] http://cougarcorner.com/images/mobile.png" alt="" loading="lazy" style="max-width:100%">

I don't have any proof; but it definitely looked like attendance was down. Lots of empty seats in the endzone this year. Maybe it had to do with the student section being moved and more tickets were at a higher price this year.(student section eats up mostly endzone seats and opened up east bench seats for sale)

I don't get it...this is the best home schedule I've ever seen for a BYU team, and attendance dropped.



Why should Holmoe try to get good teams to come in. It's not like attendance seems to correlate to who the opponent is.

stuckinbig10country wrote:
I don't get it...this is the best home schedule I've ever seen for a BYU team, and attendance dropped.



Why should Holmoe try to get good teams to come in. It's not like attendance seems to correlate to who the opponent is.

I think momentum has played a roll in our attendance dip. If we were on fire coming into the 2013 season and were good this year........ IF we would have beaten Utah I think the attendance vs BSU and GT would have been better.

Look at the attendance in 2002, should have been bad right? 2001 mattered.

Byu has a fickle fan base. Add in poor tail gating tradition/late arrivals/large familes. etc etc. Byu has to be good to sustain sale out's, tradition doesn't carry us like a ND or most SEC schools.

stgeorgefan wrote:

I don't get it...this is the best home schedule I've ever seen for a BYU team, and attendance dropped.



Why should Holmoe try to get good teams to come in. It's not like attendance seems to correlate to who the opponent is.

I think momentum has played a roll in our attendance dip. If we were on fire coming into the 2013 season and were good this year........ IF we would have beaten Utah I think the attendance vs BSU and GT would have been better.

Look at the attendance in 2002, should have been bad right? 2001 mattered.

Byu has a fickle fan base. Add in poor tail gating tradition/late arrivals/large familes. etc etc. Byu has to be good to sustain sale out's, tradition doesn't carry us like a ND or most SEC schools.

I know you're right, and it's the same for a lot of teams. Most attendance numbers for most teams are on about a one year delay.