Friday, March 19, 2010

ROI vs. RPI: NCAA basketball return-on-investment

From David Biderman in the WSJ...

[who] filled out a bracket that rewards teams for the revenue they produce relative to their expenses.

The results showed that when it comes to money, the Big Ten dominates, boasting three of the four teams to reach the ROI Final Four. In the end, Ohio State cuts down the nets on the strength of its basketball team's 243% return on investment. The Buckeyes put $4.7 million into their men's basketball program in 2008-09 and had $16.1 million in revenue (the biggest arena in the Big Ten might help). Generally, state schools have the most success, taking up 12 spots in the Sweet Sixteen. Louisville reaches the finals with a 196% return on the $8.63 million it spent.

On the other end of the spectrum, Duke, which showed a 14.6% loss, gets sent home by play-in-game winner Arkansas Pine Bluff in the first round (Pine Bluff made a nice 48% return on the humble $505,000 it spent)....


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