We’re going to be writing a bit more later this month about valuations in sports teams… but in the interim this tidbit in the WSJ caught our eye.
[blockquote background=”#f6f6f6″]The Longhorns, who still led all programs in estimated revenues, are worth $972.1 million, up from $875 million a year ago. But that was only good for No. 3. Michigan finished second at $999.1 million. Ohio State and Michigan both benefited from much-improved cash flows over the past year.[/blockquote]
One of the problems we always have when looking at these notional sports teams “valuations” is that they are revenue driven. Brewer heads the right direction here – valuing a football program is ultimately no different than valuing a business. With few exceptions, we care more about cash flow then revenues.