Sports Valuation and Analytics
Georgia Tech VIP Team
About
Adapt corporate valuation models to model the value of college sports; analyze the impact of transfers on team value; use fantasy/professional sports to study risk and return. The Sports Valuation and Analytics (SVA) team works on the development and application of discounted cash flow and comparable analysis models to value collegiate sports teams. We also will develop “dashboards” which will use analytical programs and tools so that model output is easily organized and understood. We will analyze issues such as the impact of the transfer portal on the value of an athletic program. We will also use fantasy sports data (professional sports) to compare the risk and return characteristics of fantasy participants to those in the stock market. With the changing landscape of collegiate sports, the need for detailed valuation of sports teams is critical. Such analysis requires collection of unique data and understanding how to apply traditional valuation models (typically applied to a firm) to a sports team. While some of the data has already been collected by Dr. Garner, valuation requires the perpetual updating of new data; students will learn what data is relevant, collect this data, and build models to “value” and “price” sports teams. “Value” and “Price,” are different, despite many in the finance (and sports world) using these terms interchangeably. We will also examine the impact of transfer portal activity and NIL value on team performance, ticket sales, and recruiting expenses. Finally, sports betting and daily fantasy sports impacts sports valuation. Daily fantasy sports lineups are analogous to an investor’s stock portfolio. However, those lineups are terminated each week, with the option of creating an entirely new lineup in a new tournament. As Markowitz (2021) finds, “sports betting markets offer a novel laboratory to evaluate theories of cross-sectional asset pricing anomalies.” The absence of systematic risk and terminal values being exogenous to betting “evade the joint hypothesis problem, allowing mispricing to be detected.” Therefore, daily fantasy sports create a natural experiment to test behavioral finance theory, and as such, we can assess the impact of past performance on future risk taking.
Majors
General Management, IT Management, Marketing, Operations and Supply Chain Management, Strategy and Innovation, Algorithms, Combinatorics and Optimization, Computational Media, Computer Science, Computer Engineering, Industrial Engineering
How to apply
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