A total of 129 teams compete in Football Bowl Subdivision, the highest level of college football in the US. Recently a study was conducted which ranked the college football programs on the basis of their valuation in the market assuming that these teams can be bought and sold.
Parameters such as income, expenditure, risk management, and growth estimate are used to determine the worth of a professional sports organisation. The same parameters have been used by the study conducted by Ryan Brewer, who teaches finance at IUPUC.
The study reveals that a couple of these college programs are worth a billion dollars. Compare that with some of the world’s richest soccer clubs and you will understand the magnitude of college football in the US.
Currently the least valuable team in The American
According to Brewer’s study the East Carolina Pirates are at the bottom in terms of its valuation at just twenty-eight million dollars as opposed to the UCF Knights who are at the top in AAC with an astounding sixty-eight million dollars.
It goes without saying that the ECU is faced with one of the biggest challenges in its history even after having generated over eighteen million dollars in revenue in 2018. East Carolina has failed to win the Division I in four consecutive years which has cost them significantly.
It was thought that a coaching change would turn things around for the Pirates so they appointed new coach Mike Houston. The idea was that improvement in playing style would result in improved results and thus in turn aide in tickets sales and generating more revenue. There is no immediate answer to the Pirates’ troubles hence they must stay patient with the new coach and give him time to turn things around.
The UAB shut down is a warning call
The Blazers are enjoying a good run of form since its restoration in the Division I. But a few years back the UAB was shut down on account of being financially unsustainable. After that in just two years from its reinstatement the team has reached a valuation of US$ 48.5mn and earned a staggering twenty-eight million dollars in the year 2018.
The major reason for the downfall of the Blazers’ was the massive decline in attendance to their matches. Thus the Pirates’ must learn their lesson from the UAB and avoid the same fate as the Blazers.
Devaluation of college properties is also a concern
One important statistic from Brewer’s analysis is the revenue generated by the teams across Division I. The net income of the teams adds up to a huge US$ 5.6bn which is 6.4% more than the previous year. The value of teams’ sports facilities is also considered while determining their worth and the deterioration of the same also has an impact on the team values.
Despite their difficulties there are a number of players with massive potential and if the team maintains stability, in the next few years things could start to change for the Pirates.