When Forbes Magazine released its yearly list of the most valuable college football programs last month, a canyon-sized gap jumped off the page.
Michigan was worth nearly twice as much as Ohio State.
Using a formula that weighs football revenue and profit among other measures, Forbes valued the Wolverines at $120 million. Ohio State's program — the engine of the largest athletic department in the nation — ranked 20th nationally at $63 million.
The verdict gained national attention. Had Michigan suddenly lapped its rivals in the Big Ten arms race?
A closer look suggests ... not so fast.
The appraised distance between Michigan and Ohio State depends on how you work the numbers, casting a spotlight on the lack of standardization in the annual financial reports schools must file to the federal government.
What’s clear is OSU and Michigan athletics rake in more cash than every school but Texas nationally. How they allocate that money for the report used by Forbes is where it gets complicated.
“You've got to dig deeper into the numbers because of the way each university reports,” said Pete Hagan, Ohio State associate athletic director for finance. “There’s a pretty broad interpretation in some of these guidelines.”
Total Revenue (millions)
1. Texas $163
2. Ohio State $142
3. Michigan $129
4. Alabama $124
5. Florida $120
6. Louisana State $114
7. Penn State $108
8. Auburn $106
9. Oklahoma $106
10. Tennessee $106
1. Texas $129
2. Ohio State $116
3. Florida $111
4. Tennessee $106
5. Michigan $101
6. Wisconsin $100
7. Alabama $98
8. Oklahoma $98
9. Auburn $96
10. Louisiana State $96
Source: U.S. Department of Education
According to the annual Equity in Athletics Disclosure report, which is widely cited by national media outlets and helps forge perception of a program's status, Ohio State's $142 million in total revenue ranked second nationally while Michigan was third with $129 million.
Yet although the titanic footprints of their football programs accounted for most of this, Michigan’s gridiron revenue vanquishes OSU’s reported gain. Michigan reported $85.2 million in football revenue between July 31, 2011 and June 30, 2012. OSU took in $58.1 million.
The numbers are skewed in part by Michigan playing one more home game than OSU in 2011 and the different ways schools assign revenue, which makes it difficult to truly compare the value of two programs.
What counts as a football-designated revenue stream is largely open to interpretation. Michigan, for instance, includes $22.5 million in donations as part of its football take — the second largest source of revenue after ticket sales from eight home games ($46.4 million). Ohio State counts donations as non-allocated revenue, its football earnings comprised mostly of the gate from seven home games ($37 million) and television and broadcasting payouts ($12.8 million).
Ohio State also counts football-related revenue earmarked toward debt service payments for the $194 million renovation to Ohio Stadium completed in 2001 as non-allocated. Last year, that included $9.3 million in sales of club seats and luxury suites and and $3.5 million from ticket surcharges.
In all, Ohio State reported $52 million in non-allocated revenue to Michigan’s $28.3 million. As an example of the lax reporting standards, Michigan State had only $2.2 million in non-allocated revenue, instead assigning virtually all of its proceeds to football and men’s basketball.
While Michigan State’s $79 million in total revenue was dwarfed by Ohio State, that accounting helped make its football program more valuable in the widely publicized Forbes report. The Spartans’ reported $30 million in football profit — $50 in revenue, $20 million in expenses. The Buckeyes reported a $24 million profit after spending $34 million on football, a commitment that trailed only only two-time defending national champion Alabama's $36.9 million budget.
Michigan associate athletic director David Ablauf said, “apples to apples, it's hard to compare [schools] unless there was one way that everybody had to handle their expenses and revenues.”
He added: “I know that we've done our numbers the same way for years.”
David Bergeron, a senior official at the U.S. Department of Education, called it impractical to issue a specific set of guidelines for how athletic departments report their finances.
“You’re dealing with the full range of D-I with football all the way through D-III, and not just staying within the NCAA realm,” said Bergeron, acting assistant secretary for postsecondary education, in a phone interview last year. “Going into NAIA and the sanctioning body for community colleges, they’re all over the map in terms of the size and complexity of their athletic programs.
“It makes it really hard to be prescriptive about what they have to do. You’d basically have to have a set of standards for each of those levels of sanction and sanctioning body and, really, that’s way beyond what we would do. Then you would end up with a compliance handbook manual for doing EADA that would be multiple times larger than the NCAA regulations. I get criticized enough for overregulating higher education.”
By any measure, OSU and Michigan are thriving financially. At UM, its recent football revival and the addition of 83 luxury boxes and 3,000-plus club seats as part of a $226 million renovation of Michigan Stadium have proven a boon. Its football revenue climbed $33 million over the last three years while its athletic department continues to close the gap in total spending with OSU.
Michigan, which as recently as 2006 spent $41 million less than OSU, spent $101 million on its 27 varsity teams last year. The Buckeyes spent $116 million on 36 sports.
As for which football program is more valuable, consider it a good-spirited rivalry debate.
Depends on which side you ask.
“All these reports are interesting,” Hagan said. “Some people take them at face value and don't ask enough questions.”
Contact David Briggs at: firstname.lastname@example.org, 419-724-6084, or on Twitter @ DBriggsBlade.