It's another great year to root for Louisville. The Cardinals won a second consecutive Big East tournament title in a thrilling 78-61 victory over Syracuse. The team's success this year led to a No. 1 seed in the upcoming NCAA tournament, which Louisville hasn't missed since 2006. And, once again, Louisville is college basketball's most valuable team, now worth $38.5 million, up from $36.1 million last year.
The team's financial success is largely tied to the KFC Yum! Center, the waterfront arena that opened in 2010. The new arena had an immediate impact, driving ticket sales up 28 percent to $14.2 million and generating over $20 million in contributions to the team, an 84-percent increase from the prior year. Income from program sales, concessions, parking and other sources also increased by more than $2 million.
And the financial impact is a lasting one. Contributions to the team are still up, reaching $20.4 million last year, as is revenue from concessions and parking. Ticket revenue was down slightly, but Louisville played one fewer home game and has little reason to worry about the future – the Cardinals have ranked third in average home game attendance every year since the arena opened.
Louisville is also on a path to even greater riches. The Cardinals are moving to the ACC in 2014 and will cash in on the conference's new TV deal with ESPN that pays about $17 million per school annually, a massive increase from the $3 million or so that Louisville is used to getting in the Big East.
There was very little turnover in the top ranks of college basketball's most valuable teams. Just like last year, Kansas (now worth $32.9 million), North Carolina ($32.8 million) and Kentucky ($32.1 million) sit just behind Louisville. Kansas jumped North Carolina for the No. 2 spot and Kentucky is up from No. 5 last year, but the three teams are in an incredibly tight race and blowing away the rest of the field. In fact, the three basketball teams each had a profit of $19.9 million last season; only five other schools generated as much in basketball revenue.
Duke took a slide this year, now ranked 11th with a value of $17.1 million, thanks partly to changes in the athletic department's accounting practices. The Blue Devils also fell because they simply spend more than any other team. In fact, Duke is one of just six teams to break $25 million in basketball revenue, but it ranks 12th in terms of team profit.
As we noted in our annual ranking of college football's most valuable teams, fluctuations in revenue and expenses are often tied to changes in the number of home games. Kentucky, Michigan State and Minnesota are all teams that hosted more home games last year than the previous season, and each team enjoyed a subsequent surge in revenue, which increased by an average $3.7 million.
But simply hosting a lot of basketball games, while one way to increase cash flow, is not a surefire way of topping our list. Rather, the best way to the top is to follow in Louisville's footsteps by moving into a state-of-the-art arena and filling it nightly with stellar on-court play.
Our ranking of college basketball's most valuable teams utilizes a weighted methodology with three components. They are, in order of weight, basketball revenue spent on athlete scholarships and other academic programming, profit kept by the athletic department to support athletic endeavors and conference revenue generated via NCAA tournament play. Valuations are based on revenues and expenses from the 2011-12 season.
College basketball's 20 most valuable programs have an average value of $20.4 million, up from $19.1 million last year.
New to the list this year are No. 19 Kansas State at $13.6 million and and No. 20 North Carolina State, worth $13.1 million. They replace Pittsburgh and Purdue, which held the bottom two spots last year. The Wildcats and Wolfpack both enjoyed increased conference distributions and ticket sales last year, but Pittsburgh may soon come clawing back when it joins the ACC next year.
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With reporting by John Axelrod.