University Revenue Model

Sam Parr and Shaan Puri discuss the impressive business model of top universities, particularly Harvard, revealing how these institutions generate massive revenue through multiple streams while maintaining significant tax advantages.

• Harvard Business School's Revenue Breakdown (2019: $925M):

  • Publishing arm: $262M (28%) - largest revenue stream
    • 18M case studies sold annually at $10-20 each
    • 400,000 subscribers paying $10-50 monthly
  • Endowment/gifts: $250M (25%)
  • Executive education: $240M (24%)
  • MBA tuition: Only 15% of revenue
  • Online courses: 5%
  • Housing/other: 3%

• Harvard's Financial Power:

  • $40B endowment
  • ~$4B annual return (7%)
  • Could provide free tuition and still profit hundreds of millions annually
  • Publishing arm alone valued at $1.2B (using NYT multiple)

• Other University Publishing Success:

  • Oxford Press: ~$1B annual sales
  • MIT Tech Review: $20M+ revenue
  • University of Virginia: Second-highest case study sales

• Tax Advantages:

  • Minimal federal taxes as non-profit
  • Previously paid only $12M in federal taxes
  • Recent bill increased tax to ~$50M, still minimal for billion-dollar enterprise

• Business Efficiency:

  • Harvard Business Review: Highest revenue per employee ($582,000)
  • Outperforms major publications like NYT, Economist, Forbes in efficiency