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College Football's Most Valuable Teams 2013: Texas Longhorns Can't Be Stopped

Forbes

Another year, another reminder that Texas Longhorns football just can't be stopped. That's not on the field, where Texas went just 8-4, but off of it: The Longhorns are now worth $139 million, almost 20% more than any other team in the country.

Texas has been college football's most valuable team since 2009, when it usurped Notre Dame's top spot with a value of $119 million. The team's unprecedented value is built on the back of the nation's most dedicated fan base, which has helped Texas lead all schools in merchandise sales, secure the most lucrative school-specific TV deal and become the only college football team in history to cross $100 million in revenue, which the Longhorns have done for the last two seasons.

Last year Texas had income of $109 million; no other team made more than $90 million. The biggest source of revenue was ticket sales, which contributed $34.5 million last season, an increase of more than $2 million from the previous year. Texas football also collected $30 million from contributions and another $15 million from Big 12 and NCAA distributions.

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College football's second-most valuable team is Notre Dame, which rebounded 14% to $117 million after suffering a down year. That surge in value is mostly tied to the Fighting Irish "hosting" an additional home game (which was played in Chicago's Soldier Field), providing support to academic programming that's unmatched by any team in college football and qualifying for the BCS National Championship, which netted the school a unique $6.2 million payout.

Alabama has risen from sixth to third this year, with the Crimson Tide's value up 15% to $110 million. It's the first time an SEC team has cracked the top three since Georgia held the No. 3 spot in 2007. Alabama's rise stems not only from the financial rewards of dominating on the field, where the Crimson Tide have won three of the last four BCS National Championships, but also the one-time payout it received for playing Michigan in a season-opening showdown at the Dallas Cowboys' AT&T Stadium last year.

Complete Coverage: The Business of College Football

To determine college football's most valuable teams, we consider each team's value to its athletic department, its university's academic endeavors, its conference and its school's local economy. Athletic value consists of football profit that is directed toward supporting non-revenue sports, like softball or gymnastics, while a team's value to academics consists of money that supports football scholarships or other non-athletic programming, like faculty support, non-athletic scholarships or a library fund. Conference value consists of revenue generated for other conference teams by participating in a bowl game, and a team's value to its local community consists of the direct spending injected by fans visiting the area on days of the team's home games.

Our financial data is for the 2012-13 season, and we utilize team revenues and expenses as reported to the Department of Education. We also standardize those financial figures to account for differences in each school's accounting practices.

Though the top SEC teams have taken a more dominant position this year, with LSU close behind Alabama at No. 4, the conference as a whole no longer controls the front half of the list. Last year, the SEC commanded seven of the top ten spots; this year, the conference has just four teams in the top ten. Part of that has to do with how much SEC teams spend on football each year - the typical conference team spent a staggering $27 million - but it's also the result of teams like Ohio State and Oklahoma making pushes to the front.

Oklahoma jumped into the top ten (No. 7, $92 million) thanks to increased ticket sales and conference distributions that boosted revenue by $10 million over the previous year. Ohio State also cracked the top ten (No. 9, $83 million) thanks in part to hosting an eighth home game at Ohio Stadium, college football's fourth-largest stadium by capacity.

As our methodology indicates, there are some rather well-defined ways to create value with college football.

First, and most obviously, is that successful teams generate a positive operating income for a school's athletic department. Football is ordinarily an athletic department's biggest revenue driver, and that income is required to support non-revenue sports like golf and swimming. If a team is profitable enough to cover those costs and still put its athletic department in the black, then revenue can be directed back to the parent university to support academic programming.

This is particularly true for the top SEC schools. Florida led the way last year, contributing $7.2 million to academic programming, with $1.5 million of that earmarked for non-athletic scholarships. Alabama wasn't far behind, providing nearly $6.5 million to the university to help pay for scholarships, faculty support and the school's Acts of Kindness fund. Other big donors were Ohio State ($5 million) and Georgia ($4 million).

In fact, Tennessee took the biggest fall on our list, down 25% to $63 million, because its academic contributions were significantly curtailed last year. Firing former head coach Derek Dooley turned out to be an expensive affair, and his staff's buyout costs forced the Tennessee athletic department to stabilize its other expenses. As a result, Volunteers athletics went from being one of the nation's biggest academic supporters, regularly contributing over $6 million annually, to providing just $1.3 million last year.

Full List: College Football's Most Valuable Teams

The second major way for a team to create value is by competing in lucrative bowl games. The most rewarding are the five BCS bowls; this year a conference champion's bid is worth around $24 million, and an at-large berth pays an extra $6.2 million or so. Other games, like the Capital One Bowl, Chick-fil-A Bowl and Cotton Bowl, also hand out paychecks worth well over $3 million to each participating conference. That bowl revenue goes to the conferences, which ordinarily divvy up the income evenly among member schools. For a team like Alabama or Wisconsin, which regularly plays in those valuable BCS bowls, the revenue generated for fellow conference schools is immense. Our list of college football's most valuable teams includes half of the teams that competed in a BCS bowl last year; two more make our list of the best college football teams for the money. Bowl revenue is also a big part of why schools are so willing to join the SEC - this year the conference will take home a massive $52 million from bowl games, more than any other conference.

Third and finally, teams can generate value for their surrounding communities by attracting fans to home games. Notre Dame is probably the best example of how significant the economic impact can be. The school recently released an economic impact report that details how a typical home football game draws nearly 62,000 visitors and about $9.5 million in direct spending. While not many teams have the national fan base of Notre Dame, even a much smaller program like Oregon, which ranks No. 19 on our list with a value of $64 million, generates some $4.5 million in visitor spending per home game.

Complete Coverage: The Business of College Football

The only new team to our list this year is Texas A&M, which launched to No. 14 with a value of $72 million. The school claimed to only make $20,000 from Johnny Manziel's Heisman-winning season, but the numbers suggest that last season was much more lucrative for the school. The Aggies' football revenue increased by more than $9 million over the previous season, and that was despite the team hosting one fewer home game than in 2011. Other factors influencing the boost in value are the team moving to the SEC and earning a bid to the Cotton Bowl.

Michigan State was knocked off the list as a result but, along with Iowa, which fell off last year, the Spartans remain close. The ACC doesn't have a school on our list, but it's only a matter of time before one cracks the top 20. Clemson and Florida State are each worth more than $50 million and, with both teams headed to BCS bowls this season, the gap should draw even closer next year.

Full List: College Football's Most Valuable Teams

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