The Texas Longhorns are still college football's biggest cash cow, but the team's lead on the rest of the field has shrunk this year. Texas is now worth $131 million, down 6% from a $139 million valuation last year. You might expect that struggles on the field have hurt the Longhorns' income, but revenue was actually up year-over-year. The team collected $34 million from ticket sales for six home games plus another $31 million in football-related contributions; those two revenue streams comprised almost 60% of the team's total revenue. Rather, the dip in value is largely associated with expenses that surged 40% to $38.4 million last year. That $10.8 million increase in spending was almost entirely the result of an expensive coaching transition.
Last year Mack Brown retired from his job as the Longhorns' head coach after 16 years, an impressive run during which the team went to six BCS bowls, including two national title games. He was replaced by Louisville's Charlie Strong. Buying out the coach's former contract with the Cardinals alone cost Texas $4.4 million, and that was in addition to the severance pay that went to Brown's former staff. And yet despite the spending surge, Texas is still worth more than 7% than any other team in college football.
Closing in on Texas this year is Notre Dame, once again at No. 2 with a value of $122 million, up from $117 million last year. In 2013 the school negotiated an extension with NBC for its unique TV deal, thought to be worth close to $20 million annually. It now runs through 2025. And though the Irish lost one of the best agreements in sports when the BCS evaporated, taking with it an annual payout of $1.9 million, the team replaced it with another great deal: The new college football playoff will pay the team an annual distribution of $2.3 million. For some context, consider that college football's three other independent teams have to share less than $1 million.
The top five are rounded out by Michigan (worth $117 million), Alabama ($107 million) and LSU ($103 million). The SEC has a commanding position as usual, with five of the top ten teams.
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Unlike our pro sports valuations, these numbers don't represent what a team might sell for on the open market. College football teams can't be bought and sold, after all. Instead, we attempt to measure the value that college football's top teams generate for four key areas: their athletic departments, their universities, their conferences and their local economies.
We apply the heaviest weight to money that goes towards academic programming, which includes both football scholarships and direct contributions to university initiatives like a library fund or non-athletic scholarship programs. A shining example of this is LSU, which last year contributed over $7 million to academic programming. Athletic value, which is next in the weighting order, is the remaining football profit that goes toward supporting non-revenue sports like softball and soccer. The final two areas, conference and community, are comprised of money earned from playing in bowl games and the economic impact generated by home football games, respectively.
For some of the nation's top programs, like Texas and Notre Dame, financial success is often the result of decades of history and accompanying legions of fans living from coast to coast. But that doesn't mean winning on the field isn't important. In fact, if a team loses badly enough, or for long enough, it can take a serious toll on team value, impacting all four areas that we consider in our methodology.
The easiest to notice is a direct dip in football revenue. This can come from failing to make a bowl game, which cost Florida some $2 million last year. Other areas to suffer are ticket sales or even merchandise. In 2012-13, Wisconsin had gone to three straight Rose Bowls and ranked 13th in merchandise sales among the Collegiate Licensing Company's affiliated schools; as of May, following the team's Capital One Bowl loss to South Carolina, it was down to No. 18. Florida, which used to be third on the list behind Texas and Alabama when it was a regular title contender, now fails to crack the top five.
If things get dire enough, then that means terminating a head coach's contract and bringing in someone new to run the team. That's a costly affair. Texas is just one such example of how a coaching change can impact the bottom line. Another is Auburn, which fired Gene Chizik in 2012 and wound up setting aside $8.8 million in just contract buyouts.
Those extra expenses mean that less money can go toward supporting non-revenue sports and academics. Just look at Tennessee. In 2012, the year that Derek Dooley's contract was terminated, the Volunteers were the ninth-most valuable team, worth $84 million, and contributing over $6 million annually to academic programming. Value took a nose dive as Dooley's buyout hit the books, with Tennessee winding up at No. 20 the following year, worth just $63 million. As a result, academic support dried up. Last year Tennessee's athletic department sent $1.13 million back to the university for academic programming. It's still more than most athletic departments can afford, but a shadow of Tennessee's former academic support.
And it's not just the university that stands to suffer from on-field losing - even local businesses can take a hit. Fans are less likely to travel to see a team that's struggling to win, and locals won't stay long at area bars and restaurants after a losing effort. That's the case even for a major program like Michigan. As early as September the businesses of Ann Arbor were worrying about how the Wolverines' struggles were drying up the consumer base.
Of course the opposite is true as well. Auburn went from missing a bowl entirely in 2012-13 to competing in last year's national championship game; the Tigers saw value increase 26% to $97 million, and the sport's sixth-most valuable team was also responsible for netting the SEC a massive $23.9 million payout from the BCS. That sort of performance certainly helps justify the financial burden of a coach buyout.
Just missing the cut this year is Florida State, which has been hovering right outside the top 20 for several years now. Last year's undefeated trip to a BCS national championship victory over Auburn pushed revenue up $14 million, or 33%, to $57 million, while expenses also rose by more than $9 million. Just behind the Seminoles are former list members Iowa, Wisconsin and Oklahoma State; Clemson, which beat Ohio State in last year's Orange Bowl, is also in the mix.
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