Forbes Values UGA and Top NCAA Football Programs – Buy at Their Price

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By Garrett Shearman:

The Georgia Bulldogs have once again been ranked as one of the most valuable programs in collegiate football. At a value estimated by Forbes Magazine to be $102 million, UGA football ranks sixth nationally in monetary value, trailing only Texas, Notre Dame, Tennessee, Louisiana State and Michigan. That’s three SEC teams in the top six for total valuation; an additional six SEC teams—Alabama at #8, Auburn at #10, Arkansas at #12, Florida at #15, Texas A&M at #16 and South Carolina at #18—make appearances in the top twenty.

Georgia had revenues of $76 million and a highly desirable operating profit of $50 million for the fiscal year.

In ranking these programs, Forbes factors in various components of how an athletic department handles their finances, including gross revenue, net revenue and profit margin. Factors like profit margin have lifted programs like Tennessee, who was one of just eight teams to post a profit margin greater than sixty percent (at an impressive 74%), and have hurt teams like Alabama, who spent $51 million of the $97 million it made in revenue during the fiscal year. Some schools are hurt by having to pay for coaching buyouts, some for giving raises to staffers, and private schools’ profitability is hurt by giving scholarships that are valued higher (or simply put, more expensive) than the tuition of a public school.

For UGA, a school that rarely exits the top ten, 2015 brings a higher rank than all but one of UGA’s previous rankings this decade. In the past five years, Georgia was ranked at #7 in 2011, peaked at #5 in 2012, dropped to #8 in 2013, then to #10 in 2014 before making it five consecutive years in the top 10 this year (Forbes did not publish a ranking in 2010). Georgia’s highest ranking in history was in 2007, when they were ranked third nationally in profitability—good enough for top conference honors and ranked only behind perennial list-toppers Texas and Notre Dame.

For comparative purposes, the NFL’s Green Bay Packers had net revenues of nearly $375 million and an operating profit totaling $39.4 million in 2014. The Packers have an estimated market value of approximately $2.5 billion.

We asked an investment banker to value UGA football and its comparable SEC rivals as if they were privately-held, for profit companies. Taking into consideration an SEC schools’ player labor costs are primarily tuition, housing and board, versus an NFL team’s player salaries, his valuation for any of the top six SEC teams was $500 million. He stated the value of the Georgia or Alabama brand alone was worth nearly the $100 million value Forbes placed on the entire program.

Frankly, most SEC fans know their football programs are priceless.

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