Each spring, the NCAA holds its 65-team tournament to determine the nation's top college basketball program. What began with little fanfare 70 years ago has since evolved into March Madness, one of the most anticipated annual events on the sporting calendar.
More than fun, it's big business. Office pools and other tournament wagers total some $2.5 billion each year according to Federal Bureau of Investigation estimates, while the lure of buzzer-beating shots and unlikely upsets attract a TV and Internet audience to CBS of 140 million over the course of the tournament.
It's also the lifeblood of college basketball. Schools that advance to the Final Four typically bring in a rich bounty from TV revenue and merchandise royalties. Success in the tournament is integral in boasting conference coffers and drawing more donations to the athletic department from alumni and fans; not to mention it raises an athletic department's profile, making it easier to recruit players, build new venues and sell more tickets and sponsorships in subsequent seasons.
Our second annual ranking of the Most Valuable College Basketball Teams is based on the money that men's basketball programs contribute to four important beneficiaries: their university (money generated by basketball that goes to the institution for academic purposes, including scholarship payments for basketball players); athletic department (the net profit generated by the basketball program retained by the department); conference (the distribution of post-season tournament revenue); and local communities (estimated incremental spending by visitors to the county that's attributable to the program).
The North Carolina Tar Heels, who reached the national semifinals in two of the past four years, is once again the most valuable team in college basketball, worth $25.9 million. Last year the Tar Heels generated $16.4 million of operating income (second to only Louisville's $16.6 million) making North Carolina one of only a handful of colleges that made more money from basketball than football. Tar Heel merchandise, including jerseys adorned with the numbers of famed alums like Michael Jordan and Vince Carter, outsold goods from the other 11 Atlantic Coast Conference schools for the 13th consecutive year.
The defending national champion Kansas Jayhawks moved up three spots to become the fifth most valuable team, worth $21.7 million. Basketball-related merchandise royalties, driven by sales of Final Four emblazoned products, totaled $2 million last year and accounted for 80 percent of the school's licensing business. The Jayhawks collected $10 million in gate receipts from 20 games at Allen Fieldhouse and posted an operating income (in the sense of revenues less operating expense) of $12.9 million. With revenues down across their conference last year, the Jayhawks were the only Big 12 team to make our list.