Who’s Making Money on Basketball in the Big Ten?

Image from Flickr via @yowzer

 If you read this site regularly or follow me on Twitter, you know that I am in Ireland from May 17-25th. While I’m away, I’m sharing with you the work of Patrick Rishe, my collegue at SportsMoney on Forbes.com. This is the fourth of a series of pieces Patrick did for SportsMoney on college basketball finance. You can find all of my pieces on football finance here.

By: Patrick Rishe

Part I of our coverage of the economics of college basketball compared the revenues of the top 14 rated Division I conferences as listed by the RPI ratings. And Part II provided an overview of the top revenue generating basketball programs in the country.

Part 3 of our assessment of college basketball financials took an in depth look at the college basketball financials of the Big East Conference.  We saw that its 16-team conference generated the most conference revenue from men’s basketball among any conference in the country, topping $154 M in revenue for the 2009-10 season.

However, the Big Ten Conference actually generates more revenue from men’s basketball per school than the Big East, showcasing that there can be some drawbacks from having a mega-conference.  Namely, you have more mouths to feed and thus more sharing must take place.

Part IV of our look at college basketball financials focuses herein on the Big Ten.

According to NCAA financial data, over the last 6 years the Big Ten has earned $82.9 M in March Madness money based on their conference’s collective postseason performance.  This amounts to $13.5 M per year, 4th best among all other Division I basketball conferences behind the Big East, Big 12, and ACC.

So with that as a framework, let’s further review the financials of individual schools within the Big Ten.  And recall from our earlier pieces that the financial data for these programs comes from the U.S. Department of Education and is for the 2009-10 academic year.  For reasons described in the afore-linked pieces, this data is highly robust and credible as schools must report their financials to the U.S. Department of Education.

WHICH BIG TEN TEAMS EARN THE MOST REVENUE?

Big Ten schools average $12.5 M from men’s basketball with a median of $13.7 M.

Wisconsin earned the most revenue from men’s basketball among Big Ten schools, with Indiana, Ohio St, and Michigan St not too far behind.  These schools earned between 29-41% more revenue than the league average.

TEAM MBB REV RATIO
Wisconsin $17,666,311 1.41
Indiana $16,570,158 1.32
Ohio St. $16,190,723 1.29
Michigan St. $16,138,167 1.29
Illinois $14,413,222 1.15
Minnesota $13,733,316 1.09
Northwestern $10,048,801 0.80
Iowa $8,796,540 0.70
Penn St. $8,384,315 0.67
Michigan $8,321,413 0.66
Purdue $7,791,967 0.62
     
MEAN $12,550,448  
MEDIAN $13,733,316  

Four schools in the conference (Iowa, Penn St, Michigan, and Purdue) earned significantly below $10 M in men’s basketball revenues for the reporting year, ranging between $7.8-8.8 M.

OHIO STATE AND WISCONSIN THE MOST PROFITABLE

When you factor in expenses, Ohio St and Wisconsin are the only 2 schools that earned profits in excess of $10 M.  Purdue again ranked last in the conference, earning only $2.6 M in men’s basketball profits.

For the conference, the average men’s basketball profits reported was $6.9 M and the median profits was $8.5 M.

TEAM MBB REV MBB EXP MBB PROFIT
Ohio St. $16,190,723 $4,554,908 $11,635,815
Wisconsin $17,666,311 $7,539,418 $10,126,893
Illinois $14,413,222 $4,980,589 $9,432,633
Indiana $16,570,158 $7,653,945 $8,916,213
Minnesota $13,733,316 $5,692,149 $8,041,167
Michigan St. $16,138,167 $8,250,450 $7,887,717
Northwestern $10,048,801 $4,158,854 $5,889,947
Penn St. $8,384,315 $4,147,124 $4,237,191
Iowa $8,796,540 $5,243,813 $3,552,727
Michigan $8,321,413 $4,913,440 $3,407,973
Purdue $7,791,967 $5,171,495 $2,620,472
       
MEAN $12,550,448 $5,664,199 $6,886,250
MEDIAN $13,733,316 $5,171,495 $8,561,821

INDIANA AND ILLINOIS HAVE THE LARGEST “BASKETBALL SHARES”

With respect to what I’ve called the “basketball reliance” metric, the table below shows that Illinois and Indiana earned 26.9% and 24.1% of their “men’s sports revenue” from basketball.  The only other schools with “basketball revenue shares” greater than 20% were Northwestern and Michigan State.

      MBB REV AS
TEAM MBB REV TOT REV % OF TOT REV
Illinois $14,413,222 $53,502,485 26.90%
Indiana $16,570,158 $68,769,582 24.10%
Northwestern $10,048,801 $48,921,823 20.50%
Michigan St. $16,138,167 $80,064,147 20.20%
Wisconsin $17,666,311 $93,901,820 18.80%
Minnesota $13,733,316 $73,599,999 18.70%
Ohio St. $16,190,723 $89,375,805 18.10%
Purdue $7,791,967 $61,508,748 12.70%
Iowa $8,796,540 $88,510,052 9.90%
Penn St. $8,384,315 $106,614,724 7.90%
Michigan $8,321,413 $106,666,191 7.80%
       
MEAN $12,550,448 $79,221,398 16.90%
MEDIAN $13,733,316 $80,064,147 18.70%

In short, the data shows that the typical Big Ten school earned roughly 17% of its “men’s sports revenue” from men’s basketball.

Schools like Michigan, Penn St, and Iowa received less than 10% of their overall men’s revenues from  basketball, largely because of the relative disparity between their revenue-generating ability in football relative to their basketball programs.

To this point:

TEAM MBB REV FB REV FB REV / MBB REV
Penn St. $8,384,315 $70,208,584 8.37
Michigan $8,321,413 $63,189,417 7.59
Iowa $8,796,540 $45,854,764 5.21
Ohio St. $16,190,723 $63,750,000 3.94
Michigan St. $16,138,167 $44,462,659 2.76
Minnesota $13,733,316 $32,322,688 2.35
Purdue $7,791,967 $18,118,898 2.33
Northwestern $10,048,801 $22,704,959 2.26
Wisconsin $17,666,311 $38,662,971 2.19
Illinois $14,413,222 $25,301,783 1.76
Indiana $16,570,158 $21,783,185 1.31
       
MEAN $12,550,448 $40,578,173 3.64
MEDIAN $13,733,316 $38,662,971 2.35

This shows that (a) the average football revenue for Big Ten schools was $40.6 M per school, and (b) Big Ten schools averaged $364 in football revenue for every $100 in men’s basketball revenue.

Penn St, Michigan, and Iowa were the only schools to earn at least 5 times more football revenue than men’s basketball revenue.

REVENUE GROWTH FOR THE CONFERENCE

Big 10 2009 2003 Ratio
MBB Revenues $138,054,933 $43,976,630 3.14
WBB Revenues $8,619,769 $12,837,167 0.67
Total Rev – Men+Women Sports $656,351,301 $493,419,907 1.33
       
MBB Rev as % of Total 21.0% 6.7% 3.14
WBB Rev as % of Total 1.3% 2.0% 0.67
Basketball as % of Total 22.3% 11.5% 1.94

Comparing aggregate conference revenue data from 2003 to 2009 and controlling for inflation by measuring both years in constant 2009 dollars, we can surmise that:

- Men’s basketball revenues have grown roughly 214% during that span while women’s basketball revenues have shrunk by 33%;

- Men’s and women’s basketball comprised 22.3% of aggregate revenue from men’s and women’s sports in 2009, significantly up from 11.5% in 2003.

One must surmise that the creation of The Big Ten Network has had a significant impact on the growth of men’s basketball revenues.

BIG TEN TOURNAMENT – A WEAKER DRAW AMONG BCS CONFERENCES

Lastly, based on attendance data from the NCAA for the 2009-2010 season:

- The Big Ten tournament ranked 5th in average attendance per session in 2010 with 16,325 fans per session (ACC, Big East, Big 12, and SEC Tournaments all had higher attendances per session);

This stands in contrast to the regular season, where in 2009-2010 the Big Ten was the only conference with an average attendance in excess of 12,000 fans per game.

All in all, and likely in large part to the creation of The Big Ten Network, the Big Ten’s men’s basketball revenues are among the best in the nation.

Many thanks to Saint Louis University Sports Business students Bryan Beasley, Jacob Fish, Brett Goldman, Jeff Tiedman, Jordan Erk, and Andrew Moses for their contributions to this article.

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Follow Patrick on Twitter @ SportsDocRock or visit www.patrickrishe.net

3 thoughts on “Who’s Making Money on Basketball in the Big Ten?”

  1. Heath, I too was at the games tonight, South girls are very imiserspve!! They have a great combination of players that can do it all, they are fun to watch. The boys game was very one sided, it was like watching the soph team (South)playing the Varsity (North). the blog looks cool, please keep doing it.

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