Indiana University missed the NCAA Tournament for the second time in four years and fired coach Tom Crean, but the Hoosiers moved up to No. 3 in the NCAA Men’s Basketball Program Valuations rankings.
Ryan Brewer, an assistant professor of finance at IUPUC, researches the finances of college football and men’s basketball programs and puts out annual valuation rankings. His basketball numbers were released Thursday, just in time for this weekend’s Final Four.
IU, which was ranked No. 4 last year, generates nearly $19 million in free cash flow for the university — second only to Louisville — and is valued at nearly $278 million. Revenues grew at 9 percent, well above the national average of 3.7 percent.
“It’s a basketball state, arguably the No. 1 basketball state in the country, and Indiana is the historically premier program in the state,” Brewer said. “When Crean came, he cleaned up the program. He was a great marketing person. (Revenues) kind of plateaued recently, but there were some years when it did receive good revenue growth.”
Kentucky supplanted Louisville at the top of the rankings. Louisville, which has been beset by a prostitution scandal, fell from $367 million in 2015 to $301 million last year, but jumped to $320 million this year.
Kentucky jumped from $244 million to $343 million.
“Kentucky has an amazing growth rate,” Brewer said. “The (coach John) Calipari system is benefiting from an unexpected growth over the past few years. Louisville just generates a ton of money, despite the scandal.”
Brewer said one of the main reasons Louisville is so valuable is that it receives a sweet deal from the KFC Yum! Center, and the city of Louisville is a large metropolitan area without a professional sports team. He also noted that Louisville is one of the bourbon capitals of the world, and the Yum! Center is an alcohol-serving venue.
Purdue, meanwhile, ranks 11th at $140 million. The next in-state school is Butler in 92nd at $23 million.
Butler’s 10-year growth is nearly 15 percent. Its signigicant revenue move came between 2010-13, when its total revenue pool increased by 70 percent on the heels of back-to-back NCAA runner-up finishes in 2010 and 2011.
“They made their move awhile back with Brad Stevens,” Brewer said. “It sustained because even though they haven’t been as good, they moved into a better conference.”
The rankings show that having big-time revenue and valuation aren’t especially necessary for a school to make a deep tournament run. Among this year’s Final Four teams, North Carolina is ranked 10th, South Carolina 34th, Gonzaga 39th and Oregon 69th.
Brewer said the rankings really are about the value to each university and what they can do as a whole.
“The high-profile sport programs in college are student service organizations to develop young people for leadership in society in the future,” Brewer said. “Secondly, the organizations act as marketing vehicles for the universities to be able to attract and retain higher-caliber students, as well as faculty and support staff. So the valuations are an objective way of looking at which programs are doing exactly that.”
The men’s basketball valuation rankings by IUPUC assistant finance professor Ryan Brewer (numbers in millions):
7. Ohio State;177.892
10. North Carolina;143.015
Indiana’s other Division I schools
110. Notre Dame;13.753
144. Ball State;8.747
156. Indiana State;7.226