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Texas athletics overwhelm rivals in revenue and spending
By Steve Wieberg, Jodi Upton and Steve Berkowitz, USA TODAY
AUSTIN – Out the window of Mack Brown's office sits the sixth-largest stadium in college football, empty and quiet on a warm spring morning but the center of the Texas universe, packing in 100,000-plus, on game days in the fall.
Big is good in this state. Bigger is better still. A short walk away is a 20,000-square-foot weight room and an equally recruiting-friendly, state-of-the-art locker room complete with gaming stations and a nutrition bar. Brown, himself, is one of the highest-paid coaches in his sport — at better than $5 million a year, pulling down more than four NCAA Division I schools spend on their entire athletics program.
"The thing you know at the University of Texas," he says, "is that you're going to be able to have the best of the best and you're going to have it on a yearly basis. … I wouldn't swap with anybody."
Football merely fronts the largesse. In the past three years, USA TODAY Sports' annual analysis of college athletics finances shows, no college athletics program has out-earned or outspent the colossus that is Texas.
The Longhorns took in a little more than $150 million in 2010-11, the most recent year for which public schools' filings with the NCAA are available. That outdistanced second-place Ohio State by $18.5 million. The 'Horns' outlay for football and 19 other varsity sports was $133.7 million, almost $11.5 million more than Ohio State put into its 36 teams.
Texas' program is one of only 22 across Division I that operate in the black — it generated enough revenue to cover athletics expenses — an increasingly touchy issue in times of shrinking state allocations and economic stress in higher education. Moreover, the Longhorns kicked $6 million back to the school's academic side a year ago. For five years, half of the take from their new statewide, 24-hour cable television venture, the Longhorn Network, is earmarked for academics.
The school's unabashed athletics growth comes, however, as the NCAA continues to preach fiscal temperance, particularly to schools spending beyond their means in the chase for athletics success. Their bar — for coaches' salaries, for cushy facilities — is ever higher.
And the Longhorns underscore a long and growing criticism of major-college athletics, that it's more big business than ancillary educational activity. Ten programs, all anchored by football, made or spent better than $100 million a year ago, USA TODAY Sports' findings show. Nearly two dozen topped $80 million on one side of the ledger or both.
Spending across 227 public schools in the NCAA's Division I from which USA TODAY Sports obtained information rose by $267 million from a year earlier.
"There's nothing to stop Texas or other very successful financial enterprises with these gigantic television contracts from continuing to grow, grow, grow because their revenues match their expenditures," says former Arizona President Peter Likins, who several years ago headed a high-level NCAA panel that examined the cost of college athletics. "But the disconnect between what's happening in athletics and what's happening elsewhere in the same universities creates stress, and … the stresses will create a breakdown."
He's braced for governmental intervention. "Somebody's going to decide, either out of anger or just out of good government, that this is an unrelated business enterprise and has to be treated as such in terms of tax policies and that kind of thing," Likins predicts.
Brown doesn't blink. "I think, when we make it, we have a right to spend it," he says. "That's the way America is."
Apart from athletics, Texas is among the scores of public universities struggling to make ends meet. It cut 200 jobs — mostly in administrative and other non-academic areas — in fiscal 2011, and has targeted another 400 for elimination this year and next. Included among the latter are some 95 teaching positions. With that will come larger class sizes and fewer course offerings.
State appropriations to the school are falling by $92 million, a little more than 16%, in fiscal 2012 and 2013.
The athletics program, meanwhile, saw annual athletics revenue grow by close to $53 million in the five-year period ending in 2010-11. Both the Longhorns' income and spending in fiscal 2011 were nearly triple the median in the NCAA's top-tier Division I bowl subdivision.
They outspent the first three schools on the schedule of their coming football season — Wyoming, New Mexico and Mississippi — by nearly $18.5 million that year. Combined.
Those gaps don't figure to shrink. The Longhorn Network has just started paying off: a first installment of about $8 million, with a total of $247.5 million due over a 20-year contract with ESPN. Overall athletics revenue for 2011-12 is projected to approach $160 million, expenditures to rise by almost $20 million to $153.5 million.
"They do everything they can to set themselves apart, that they are the very best, they are the elite," says Bill Byrne, who retired last week after 10 years as Texas A&M's athletics director. "I believe DeLoss (Dodds, the Longhorns' longtime AD) said 'we are the Joneses.' They act that way, and they spend that way."
If that smacks of envy, it's tinged with an archrival's grudging admiration.
"They're absolutely committed to having the best athletics program in the country," Byrne says. "You've got to tip your hat to them."
The Longhorn edge
Texas boasts some built-in advantages. A dominant brand in a state of almost 26 million. An alumni base of some 450,000. Oil and technology wealth, and a statewide economy that weathered the recession better than the country's as a whole.
The school made its own breaks, too. Dodds and other decision-makers kicked off a wholesale upgrade of facilities in the 1990s, tending first and foremost to the football stadium. Not insignificant was the addition of suites and other premium seating that, beyond the cost of admittance, required various levels of donations to the athletics program. Premium seating now accounts for more than a third of Memorial Stadium's capacity, and Texas has moved to improve the game-day experience for those and other paying customers with a mammoth, 55-foot-high video board, an enhanced sound system and nicer concourses, among other things.
"People want amenities, and they'll pay for them," says Chris Plonsky, Texas' women's athletics director and director of both men's and women's athletics external services. "And that will pay for a lot of other things."
The '90s also saw the Longhorns make a couple of key coaching hires, Brown in football and Rick Barnes in men's basketball. Count baseball's Augie Garrido as a third. They've delivered a combined winning percentage of better than .700, and Garrido (two) and Brown (one) have won national championships. Barnes guided Texas in 2003 to its first NCAA tournament Final Four in 56 years.
In a football-first state, Brown's national title in 2005 — secured with a breathtaking, 41-38 win against favored Southern California in the Rose Bowl — was the real difference-maker. "Fairy dust," as Plonsky puts it.
NCAA filings show Texas' licensing and royalties revenue climbed 86%, before adjusting for inflation, in the three years that followed. Contributions rose 41%. All told, athletics earnings went from a little less than $98 million in 2005-06 to more than $138 million in '08-09.
The Longhorns' spending kept pace, going from about $91 million to almost $128 million to overtake Ohio State. The Buckeyes spread their money across 16 more teams, however.
Brown's winning ways
"Hiring Mack Brown was huge. I can't understate that," says Dodds, who took over as AD in 1981. "What we've been able to do with him here is just unbelievable. It's not something you plan for. It's more than we planned for."
Brown, who has won 141 games in his 14 seasons with the Longhorns, figures prominently in where Texas' money goes. He's making $5.2 million this year, not including bonuses, and the school has written annual $100,000 raises into a contract that was extended in January to 2020.
Texas' entire outlay for coaches' salaries a year ago was $22.2 million, highest among the 227 Division I schools from which USA TODAY Sports obtained NCAA-mandated financial reports. Private schools are exempt from state laws requiring disclosure.
Nowhere do the Longhorns scrimp. They also spent $27.7 million, more than anyone in Division I, on administrative and other support-staff compensation in 2010-11. Only five schools sank more into the upkeep of their athletics facilities ($23.4 million). And the 'Horns were among the top 10 spenders on travel ($7 million-plus) and recruiting (almost $1.5 million).
"Whatever we do, we want to do it well," Dodds says. "Whatever sport we have, we want it totally funded — I mean totally funded. We want it to be the right experience for every youngster on all of our teams. Whether it be travel or housing or whatever it is, we want it to be first class."
And so Texas teams do little busing to games beyond the two-hour-or-so rides to College Station and Texas A&M, which are about to come to an end with A&M's move from the Big 12 to the Southeastern Conference. Most everything else, even trips across the Red River to Oklahoma and Oklahoma State, are by charter flight.
Consequently, "The attitude that people give you is, 'You should never lose a game, ever,' " Brown says. "More than at any place I've ever been."
Texas fares reasonably well on the field, finishing 12th and 15th the past two years in the Directors' Cup standings, which were developed by National Association of Collegiate Directors of Athletics and USA TODAY to recognize the most successful overall program in the country. This year's final rankings will be released after baseball's College World Series in late June; the Longhorns were ninth coming into the spring.
But of late, their hefty financial investment isn't paying off in national championships. Since winning four in a two-year stretch in 2004-05 and 2005-06 — in football, baseball and both women's indoor and outdoor track — Texas has celebrated only a men's swimming and diving title in March 2010.
In the two years since the school bumped Brown's pay from $3.1 million to a little more than $5 million, his teams have gone 6-11 in the Big 12 and a nondescript 13-12 overall.
Nonetheless, there's not a hint of buyer's remorse. "From a business point of view," Texas President William Powers says of Brown's salary, which will hit $5.3 million plus bonuses in 2012-13, "that is a very sound investment in the revenue-generating side of our football program."
Powers is a staunch defender of the high-dollar pursuit of athletics excellence, pointing to the role of successful teams in attracting students and donors and the fact that the Texas program supports itself — and then some. Money from the Longhorn Network, for example, is going into the endowment of chairs in philosophy, physics, art, art history and other academic areas.
"It's hard to understand what's out of whack when it's a big contributor to academics rather than a drain," he says.
Growing sports spending
Likins, who was Arizona's president from 1997 to 2006, doesn't object to Texas' approach specifically. Just to what it represents: unbridled escalation that dwarfs the growth of universities in general and all but mocks the financial straits that have led many schools to pull back on the academic side.
"At Texas, it may be sustainable," Likins says of athletics spending. "But think about the schools that are desperately struggling to stay in the game and are dramatically increasing the university's subsidy of intercollegiate athletics and aren't succeeding in improving their financial position.
"Texas, in a certain sense, elevates the stakes of the game so that schools … are further motivated to make financial commitments to try to catch up."
Does that in any way tug at the Longhorns' conscience? Should it?
"I don't think it's our concern. People just have to live within their means, whatever it is," Dodds says. "Someday, somebody's going to have a budget bigger than ours. We're not going to try to spend money we don't have to stay up with them. We're going to be where we are."
"If the point of view is other schools are having a hard time competing," Powers says, "… we're cognizant of that. But it would be an odd value in competitive athletics to punish fairly gained success —Albert Pujols has hit too many home runs in this game so we're not going to let him come up to bat in the ninth inning.
"Over a long period of time, there are schools that have invested a lot. Not just money, but a lot in reputation, in facilities. I'm not sure how we take that off the table."
Or how to stop schools from adding to what's on the table. The NCAA can call for moderation but acknowledges it can't dictate what institutions choose to spend on coaches' salaries, facilities and other athletics amenities.
"I've always felt like, in America, you don't pull everybody down to the one who can't get there," Brown says. "You pull everybody up to the ones who have."
The one, for now, is Texas.
Ten biggest spenders
Operating exp. (millions)
Sources: Individual schools, compiled by USA TODAY in conjunction with Indiana University's National Sports Journalism Center.