Thursday, March 18, 2010

KU men’s basketball team fourth most valuable, according to Forbes study

The KU men's basketball squad was listed in Forbes as the fourth most valuable squad. The team ranks behind teams like UNC and Kentucky. The team brings in about $15 million per year.


Already No. 1 in the polls that track athletic success, Kansas University’s men’s basketball team is moving up in another set of rankings.

KU is now No. 4 in Forbes magazine’s list of most valuable squads, earning a value of $24 million, moving up one spot from last year’s rank, jumping Indiana University.

While the KU team spends a lot of money on travel and coaches’ salaries — head coach Bill Self earns $3 million per year — the Jayhawks remain a profitable enterprise for Kansas Athletics, earning a profit of $15.2 million, according to the magazine.

The magazine used four criteria to rank the teams’ values. In order of weight, they were:

• The value of contributions to the institution for academic purposes, including scholarships for basketball players.

• The net profit generated by the basketball program retained by the athletic department.

• The value contributed to conference peers via tournament revenue.

• Estimated direct spending by visitors to the county attributable to home basketball games.

The University of North Carolina led the rankings with a value of $29 million. Other teams ahead of KU were the University of Kentucky, $26.2 million, and the University of Louisville, $26 million.

The top three teams remained the same from last year’s rankings. North Carolina was able to capitalize on a year when the Tar Heels won the national title, as its value rose 12 percent over last year’s totals. KU’s value rose nearly as much, however, by 10.6 percent.

The magazine used data from the U.S. Department of Education, the U.S. Bureau of Labor Statistics, the universities, the NCAA and local chambers of commerce to determine the rankings.


jaybate 5 years ago

"Game Morning Thinking about Hoops and Privatization--Talk about Fun!"

In other words, Forbes could not figure out what each basketball program was literally worth, but wanted to a) call attention to the cash available to be ripped off, er, privatized; and b) to connect its name to the prestige of college basketball this time of year, and so Forbes invented a bunch of cockamamie variables and summed them.

Or something like that.

Oh, and, well, wouldn't it be fun to privatize college basketball in a rigorous, Fed/Investment banking/collusive sort of way?

Why should all of these mom and pop universities created by foolish, obsolete, 19th Century democratic, socialistic and populistic notions of educating citizens, so they could vote smart and maintain a vital republic, why should these mom and pop universities be getting so much gravy, when we the Fed/invesment banking nexus could be the ones goring the ox in a vastly more "efficient" way? :-)

Too bad, Forbes, one of the world's most distinguished mouthpieces of privatization vulturism, also stopped short of converting the "values" of these variables that contrived, which are really just fuzzily-defined annualized quantitative/qualitative revenue streams of one kind or another, into capitalized values; i.e., into a "market value," no wait, into a one time cash price, if the juiciest parts of the programs (i.e., the cash revenues, with the bulk of the overhead left to be paid by the tax payers) were privatized and sold off in the private sector to suckers, which may well befall college basketball one day.

Not only does the defense never rest, the privatization vultures never do either. :-)

After all since the biggest privatization of all, the Fed, we have seen all manner of governmental infrastructure stolen, er, privatized. Military and intelligence activities all now have to "compete" with private militaries and private intelligence organizations. We have private water districts and public water districts. We have private schools and public schools. We have private torturers and public torturers. Why not have private college basketball and public college basketball? Why not "take" some of the publicly owned college basketball programs private? Why not take some of the private basketball programs public? There are investment banking fees of 2% of the total value of the deal to be made either direction of migration. Taking a private basketball program public gets it access to cheap, government sector lending rates. Taking a public basketball program private allows one to leave some of the over head in the public sector, strip out the juiciest revenue streams, cap them and flip them to investment funds and bank it all in the Caymans.

Is finance fun, or what?

ABeesus 5 years ago


Imagine the team the Fed could field, starting w/ Helicopter Ben Bernanke.

jaybate 5 years ago

For more fun, convert a $26 million tax exempt revenue stream into a capital value by using an average rate of return on tax exempt municipal bonds, or some other rate of return on a highly secure, tax exempt government security. Let's use 2% for fun. People who like this sort of deal will know we could use a 1% rate if we use short term securitization and roll them. Persons angered by this concept will use private sector rates to make it seem worth less.

Now listen up, because this is massively complicated to do. Only licensed financial professionals should dare try it. Why it takes MIT grads and rocket scientists to do this. :-)

Divide $26 million by .02, or .01.

That would be thirteen and seven zeroes.


Now do you see some other reasons why the privatization vultures at Forbes are writing about the "value" of college basketball? :-)

I mean what if the average "value" of a D1 program were, say, only $75,000,000?

How many D1 programs does list? 347.

Okay, $75,000,000 times 347 equals $26,025,000,000.

Taking 2% investment banking fees on flipping $26 billion worth of D1 schools either public to private, or private to public (under different market conditions, you could massage these deals either direction), ought to put a few investment bankers kids through Harvard.

It has every thing privatization vultures like.

Huge numbers.

And "value" variables and potential capitalization rates with considerable wiggle room in estimation to make a deal work for investment bankers slicing out 2% up front on the total value of the deal.

Oh, I know, we could really complexify this to flummox all of the regents, and the investment funds that portions of the deal would eventually be rolled into, and we could still bundle them with "countercyclical investment instruments" in "derivatives" with "phoney baloney insurance" to geek stock and bond peddlers into schlepping them. Why we could even dust off some old, more complicated return rates, like "internal rate of return," or "modified internal rate of return," or "superdupercaliphragilistic internal rate of return" and really squid ink our trail and overstate the value of this stuff maybe 50% depending on how absurd we make the appreciation assumption in models built by "rocket scientists" and "whiz kids Ph.ds." we hire to whore for us.

There is no reason at all that KU basketball can't be even more privatized than it is. And then taken back public later, too!

Where there is a privatization vulture's will, there is always a way. It just takes time.

Privatization is money vultures taking government sector revenue streams , carving out the most profitable streams for themselves, adding a private sector required return on investment to the pro forma, and leaving as much of the overhead as possible to be paid for by the tax payer.

jaybate 5 years ago

If government were annualized robbery from us all by taxes for inadequate services, privatization is time zero robbery of everything (equity and annual revenue streams with the addition of a private sector hog factor return on invesment line in the pro forma) from us all with direct distribution to a few pirates, who then dump what they've stolen and let it go backrupt.

If you fear big government, which has some legitimacy and some voter input, be absolutely petrified of privatization, which reputedly steals,er, appropriates your publicly owned goods and services from you, then reputedly reduces the quality of the service in many cases, then reputedly after a short come on of lower prices, charges you more for the long term, once the privatized entities are either reputedly oligopolized, or reputedly run into the ground and reputedly bankrupted! .

Some of the same persons and firms that reputedly steal, er, appropriate money from you through your government reputedly steal vastly more and faster from you through privatization.

One old guy I used to know whose name I can no longer recall, and who has probably long gone to meet his maker, explained it to me this way.

First they reputedly steal, er, appropriate from you through your government.

Second, they reputedly steal, er, appropriate more from you by flipping it from your government to themselves in the private sector.

Third, they then reputedly steal, er, appropriate even more from you through oligopoly pricing of goods and services flipped into the private sector.

jaybate 5 years ago

Fourth, they reputedly lobby for government subsidies for the private oligopoly producers they created.

Fifth, they reputedly lobby for reduced taxes on the private oligopoly producers they created.

Sixth, when the oligopoly reputedly becomes moribund from lack of competition and vast subsidy, they reputedly lobby for and receive vast bailouts.

Seventh, owning the Fed, and/or cooperating with the Fed, they reputedly enable printing of Fed fiat currency reputedly to give themselves and their friends bailouts.

Eighth, they reputedly lobby the government to raise taxes and user fees on you to pay for what they have reputedly stolen, er, appropriated not once but three or four times along the way (double, triple and quadruple dipping).

This ol' guy always said to use the word "reputed," when you did not mean to say that you, yourself, had all the facts about something in your hot little hands.

Regardless, nice work if you can get it. :-)

(Note: The above is opining mixed with a lot of humor. The author has no reason to think anyone in the financial sector would ever,literally steal, or do anything actually illegal in relation to anything mentioned above. In this not quite depression economy bolstered by one of the most remarkably asymmetric bail-outs I can recall, so few have gone to prison for wrong doing related to, say, derivative abuses, or the bailouts themselves, that one can only infer that almost no one does much of anything wrong in the financial sector. So: quite naturally, there is an absence of malice on the part of the author.)

jaybate 5 years ago

Erratum Alert:

jaybate miscalculated. He made a math error.

Let's run the numbers again.

26,000,000/.02 = $1,300,000,000

Why that's 8 zeroes, not 7!

A zero here, a zero there, pretty soon they start to add up.

Do you see how small errors in capitalization can lead to big differences in the numbers the investment bankers take their 2% cut on?

And the mistakes compound, too!!!!

$1,300,000,000 x 347 = $451,100,000,000

Wait a minute!!!

That's $451.1 billion!!!!!!!!!!

Holy cow! That was an error almost on the magnitude of the failure of the powers that be to anticipate how much money could be lost on derivatives without proper insurance.

Well, no, that's not quite true, is it?

The bailout alone was early on something around $18 trillion, so,really, jaybate's error is small potatoes.

But, still, investment banker fees of 2% of flipping $451.1 billion worth of D1 basketball programs could send a whole lot more investment bankers' kids to Harvard, maybe even all the way to their Ph.d.s.

Yeeeee hawwwww!

Isn't finance fun?!!!!!!

aralls 5 years ago

JayBate, stick to writing; your math is way, way off. I'll correct you later if nobody else does in the meantime.

jaybate 5 years ago


The Fed would be a formidable owner of an NBA franchise, for sure. No salary would be too high. No operating loss could not be bailed out. Just print the money. It would be like having the Wizard of Oz as an owner of a team in the L. Everyone in Oz would be running around saying, "We're not in Kansas anymore."

Remember, some have reputedly suggested that L. Frank Baum wrote The Wizard of Oz as an allegorical warning about The Populists, especially the women Populists, of Kansas, in their attempts to stand up to some of the so-called robber barons of that so-called Gilded Age that would barely 15 years later fast track The Federal Reserve through the House and Senate in 1913 and the Federal Income tax amendment promising first priority on income taxes to the Fed.

Follow the follow the follow the follow the yellow brick road.

Not free silver. :-)

However, I've never been able to confirm Baum admitted to this anywhere.

jaybate 5 years ago


I will look forward to it, but I warn you, I'll check your math. :-)

Remember, what ever you do, express it ultimately in the following unit value: the number of investment bankers' kids it could finance going to Harvard in today's dollars. :-)

I like to see people running the numbers until they get them right.

Derivatives would never have happened had people simply correctly calculated the risk/return trade-off on the insurance contracts on those derivatives.

Oh, maybe it was a little more complicated than that. :-)

Jonathan Allison 5 years ago

I'm pretty sure that Newton was in it for the babes not the money.

Chris Shaw 5 years ago

I echo what Jaybate said! How come you didn't fill out a bracket, Jaybate? I wanted to see your picks!

jhox 5 years ago

For crying out loud, Jaybate, perhaps a Forbes writer was just a college basketbal fan looking for an interesting story?

KU sports is my sanctuary from reading about the greed of the right, and the attempts of the left to turn this into a socialistic country. Capitalism isn't perfect, and socialism doesn't work. Let's leave it at that and limit the talk to sports on this website.

LPH_hawkfan 5 years ago

Oh holy goodness, thank you JHOX. Please let us just be happy in our KUsports world. I second everything that you said about the right and the left and this "oasis" of a website.

jaybate 5 years ago


I know that's just your begrudging way of admitting I'm right. :-)


Capitalism regulated by a republic is great; that's what we used to have. Pure democracy regulating pure capitalism would be even better and what I support as a worthwhile goal to work towards. Pure state socialism doesn't work. And the nearly pure Corporate Socialism that we have now evolved is perhaps worse than pure state socialism, because it has succeeded in overtaking our republican/capitalist country, whereas state socialism failed in this attempt. Corporate socialism fosters oligopolies that crush all sectors of the economy without utilitarian regulation efficiently, effectively, appropriately and fairly applied.

If you have any capitalist huevos at all left, you should be clamoring to get the oligopolies and monopolies off our backs, so we can all get this economy working and productive again. The reality is that practically every part of our economy is run by a producer, wholesaler,or retailer oligopoly, where effective producer competition is marginalized, price fixing rules with the help of subsidies and bailouts, and the producer oligopolies leave larger and larger markets of demand underserved, or just unserved,while charging more and more for their goods and services.

jaybate 5 years ago

Start to dig out of our moribund economy by liberalizing the ultimate oligopoly--the Federal Reserve--to free its strangle hold on interest rate and money supply policy that is uses to pick winners and losers, to reward friends and marginalize competitors. The Federal Reserve inevitably reflects the too narrow base of interests decisive owners. Since you seem to like capitalism, as I do, I trust I can count you in on this. Either end the producer oligopolies (my preference though it would be very complicated to do) and put teeth back into the little d in democracy, or enable the rapid scaling up of consumer oligopolies that would be big enough to bargain effectively with the producer oligopolies. You and I as individuals cannot. Walmart is effectively a retail step in this direction. Whether you like Walmart, or not, it beats up producers in China all the time to get us consumers lower prices. The former path is democratic capitalism, which I prefer. The latter path is symmetric oligopolism--the producers and the consumers are organized to have equal clout. Either path would be a vast improvement on the current oligopoly corporate socialism that has bankrupted our nation, outsourced our firms and our jobs, and left us at the mercy of an undemocratic Federal Reserve which cast its lot with an outright communist People's Republic of China, starting a couple decades back when it chose to finance it into eclipsing America's hard earned economic and military supremacy. The trouble with symmetric oligopolism is that it is very prone to first subordinating and then marginalizing representative government; this is why I always have been and likely always will be such a strong advocate of highly democratic and highly capitalistic democratic capitialism. It remains the surest, safest way to impose and revise regulation that optimizes the purest, most efficient capitalism possible to ensure the broadest possible matching of supply with demand, of food with hunger, drink with thirst, jobs with labor, medicine with sickness, and so on.

jaybate 5 years ago

Frankly, I am amazed that I live in an America, where I actually have to argue Americans back into supporting democratic capitalism. I would think Americans would instinctively bridle at corporate socialism just as strongly as they should at state socialism. Any ism that does not advocate regulation of the purest possible capitalism by the broadest possible democratic feedback short of oligopoly influence peddling seems a product of a mind that has surrendered itself to authoritarianism, however it may nominally refer to itself. Come back into the democratic-capitalist waters, jhox, the water is fine. The current reign of oligopoly corporate socialism is already pretty much over, because it doesn't work. The only real question is: what will succeed it. I favor sound legacies. Democratic Capitalism is the soundest legacy humanity has to build on. It has worked even though it has been marginalized of late by the oligopoly corporate socialists. People like it. They came from all over the world just on the promise that it would be tried here in America. Religious freedom. One person, one vote. A constitution for all to see. A bill of rights for all human beings. Good ideas are good ideas. Time after time.


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