Just as he promised, Mike Perrin has indeed kept the trains running on time over the last 11 months as Texas’ interim, then full-time athletic director.
The lights still worked. The beer was cold. Lo and behold, the Longhorns even managed to win some games during the 2015-16 athletic year — eight Big 12 regular-season and postseason championships. Eleven players won superlative league honors, and Texas had six coach of the year recipients.
Here in the final month of UT’s fiscal year, Perrin is close to securing a financial victory, too.
According to an executive budget summary obtained by the American-Statesman, Texas athletics is on pace to meet its $183 million budget for the year and possibly finish with a microscopic surplus of $1,241. This comes two years after athletics finished in the red for the first time since 1999-2000.
“We are on sound financial footing,” Perrin said. “It’s something that I remain concerned about all the time, both on income and expenses. But that’s true of newspapers and others that have to look at income and expenses. I’m comfortable with where we are in the process.”
Perrin strikes a different tone than his predecessor, Steve Patterson, who lasted 22 months before getting fired last September. Patterson wasn’t afraid to sound alarm bells signaling that UT athletics didn’t have as much money as outsiders believed.
A lawyer by trade, Perrin likely had no idea about the athletic department’s financial plumbing before he arrived. Yes, Texas takes in eye-popping revenues, but the department also racks up incredible expenses — almost $30 million more than anyone else. About one-quarter of the athletic department’s 318-person staff makes more than $100,000 annually.
There are reasons for concern. Donations have grown stagnant as the Longhorns have endured mediocre football results. While other schools improve their facilities, Texas currently has no concrete plans for a south end zone expansion and no real idea how to pay for a new basketball arena.
In a wide-ranging interview about UT’s finances, Perrin addressed those topics and left clear that he will always err on the side of his predecessors. Texas has long delivered what it considers a first-class experience for its athletes, and even in the face of rising costs, that’s likely not going to change.
Said Perrin: “I’ve only been coming here 54 years, OK? I started in the eighth or ninth grade coming to events at the University of Texas. You expect it. I don’t mean that in a smug, complacent sort of way.
“The quality of what you do has maybe a ripple effect on things like safety, welfare of the student-athletes, books, computers, all the academic support stuff — it’s a big package,” Perrin added. “Yes, we spend a lot of money, but I think it’s part of who we are. If we had to, we’d have to cutback.”
Top 10 Revenues vs. ExpensesUSA Today surveys all major schools for operating revenue and expense information each year. The information below was collected for the 2014-15 athletic year.
|1. Texas A&M||$192,608,876||1. Texas||$173,248,133|
|2. Texas||$183,521,028||2. Ohio State||$154,033,208|
|3. Ohio State||$167,166,065||3. Michigan||$151,144,964
|4. Michigan||$152,477,026||4. Alabama||$132,354,913
|5. Alabama||$148,911,674||5. Florida||$125,384,443|
|6. Florida||$147,105,242||6. Oklahoma||$123,017,251|
|7. LSU||$138,642,237||7. Penn State||$122,271,407|
|8. Oklahoma||$134,269,349||8. LSU||$121,947,775|
|9. Tennessee||$126,584,033||9. Wisconsin||$118,691,112|
|10. Penn State||$125,720,619||10. Auburn||$115,498,047|
|Source: USA Today. Total expense numbers do not include transfers to institutions from the athletic departments. UT athletics transferred an additional $9.8 million back to campus during the 2014-15 school year, according to audited data.|
So, how does Texas spend $183 million, anyway?
Every year, USA Today tracks athletic department revenues and expenses nationwide. Texas is usually at the top of the list in both categories. In the most recent accounting, Texas A&M took the No. 1 spot in revenues thanks to a huge fundraising push for Kyle Field renovations.
Audited financial figures obtained by the Statesman show the UT football program brought in $120.7 million alone during the 2014-15 academic year and $183.5 million total. That includes money from the Big 12’s television contracts, NCAA Tournament payouts and the Longhorn Network’s $15-million check.
Men’s basketball turned a $6.4 million profit, and baseball finished $1.6 million ahead. Every other sport at UT lost money, which is not uncommon across the country.
The football programs at Ohio State and Michigan support the rest of their athletic departments, but they spend far less overall. The Longhorns had approximately $173.2 million in expenses and transferred an additional $9.8 million back to the campus coffers, something few schools can claim. The Buckeyes spent $154 million and the Wolverines spent $151 million in the same year.
Where does all of UT’s money go? Before a single athlete stepped on the field, UT owed $25.7 million in debt service and facility rental payments, according to audited figures. Former athletic director DeLoss Dodds financed the expansion of Royal-Memorial Stadium through long-term debt; UT athletics still owes $218 million in debt payments through 2044.
Basic expenses are understandable. Athletics spent $10.6 million on scholarships, $3.3 million on sports camps and $2.1 million on uniforms and equipment.
The Longhorns have four Anthony Travel employees embedded within the department. Athletics pays Anthony Travel approximately $21,500 per month, according to a UT spokesman. The school spent $7.7 million on travel for all 20 varsity sports, which includes $2.6 million on hotels. UT athletes don’t stay at the Ritz-Carlton, but they don’t stay in the slums, either.
Perrin has balked at paying a monthly fee of $26,666 to The Aspire Group, the 32-person outbound season ticket sales and service team that occupied the Royal-Memorial Stadium press box. Perrin and Aspire attorneys are currently negotiating an end to their multi-year agreement.
Texas had to spend about $2.2 million on game guarantees — paying an opponent to come to Austin for a game. That included $875,000 to North Texas and another $300,000 to BYU for games in 2014, according to records. UT doled out $100,000 for California, Rice and Texas State to come play in men’s basketball. Mid-week baseball and softball opponents usually get anywhere from $2,000 to $2,500.
The number that jumps off the page is payroll. Texas paid out $23.7 million in coaching salaries and benefits during the 2014-15 athletic year. But another $37.5 million went to support staff and other administrative compensation and benefits.
According to the payroll information of 318 UT athletic department employees, 78 are paid more than $100,000 annually. The other 240 employees make an average of $51,975, according to data obtained by the Statesman through an open records request.
“I think the day that we can’t have fresh paint, clean concrete and well positioned trash bins and all that would be a sad day for me,” Perrin said. “We strive to do things the proper way for a complete experience for our players, our coaches, the fans, the parents of the players and anybody else who comes in here.”
Does Texas have a winning problem?
Not many schools would rake in $39 million in donations and call it a problem. But at Texas, donation levels have stagnated.
Annual donations have remained in the $37-40 million range over the last seven years, according to audited figures published every year in the athletic department’s annual report. Fans stopped giving more as the winning slowed down.
Texas’ passionate fan base is extremely fickle. Or, as Perrin said upon his introduction, fans are “voting with their feet” by staying away from Royal-Memorial Stadium.
The last time there was a capacity crowd for a home UT football game was Thanksgiving night 2013, against Texas Tech (100,668).
In his first two seasons, Strong never once enjoyed the benefit of a full house. That could change with the upcoming season opener against Notre Dame. Strong has posted an 11-14 record at Texas and goes into this season needing to show significant progress to remain the head coach.
The problem goes back further than that, though. Texas is 41-35 — and only 21-17 at home — since the start of the 2010 season. It’s now rare to see national college football writers in Austin. The Longhorns haven’t even been in the Associated Press’ Top 25 poll since 2013.
And yet, many inside the athletic department believe that fans will blindly come running back whenever the Horns start winning again.
Longhorn Foundation donation history
“You think how important football is here,” football coach Charlie Strong said. “Once we start driving the vehicle and we get it headed in the right direction, then a whole lot of things will change.”
There hasn’t been much progress made on Patterson’s goal of funding endowed scholarships for all varsity sports, either. For example, football needs $105 million to endow 85 scholarships. Texas has raised just $4.1 million toward that goal, according to the Longhorn Foundation’s website.
Longhorn Foundation director Amy Folan was not made available for an interview.
Perrin believes wholeheartedly in what he called the “Flutie effect,” named after former Boston College quarterback Doug Flutie. Essentially, it’s the well-established criteria that winning athletic programs help schools in numerous ways.
“I won’t say that winning in and of itself is going to make money come pouring in,” Perrin said, “but it certainly helps.”
No fundraising for expansion
University officials unveiled a new campus master plan for UT athletics during the spring. There was a lot for Longhorns fans to get excited about within those 117 pages.
The master plan calls for a long-desired south end zone expansion to DKR. That expansion would feature a club section and probably trigger bigger renovations to the football complex itself.
A new basketball arena — which will be required due to Dell Medical School expansion — would go on the parking lot just south of Mike A. Myers Track and Soccer Stadium. New basketball and football practice facilities are outlined. An outdoor tennis center will be finalized, not to mention a host of other cosmetic improvements all around.
Perrin said he has not begun any sort of capital campaign to raise funds for the football stadium expansion. There are no known fundraising initiatives anywhere on campus for this project. UT officials are talking solely about the basketball arena, since that project will come first.
Patterson once called for public money to help pay for a new arena, but he was verbally spanked by a host of political figures and UT administrators. It’s unclear what kind of financial support UT would get from Austin city officials.
It’s likely that the majority of funds needed for a major campus facility project would have to be from private donors.
“You have a campaign. You have targets and goals, you factor in what sort of public finance you have. It’s a process,” Perrin said. “It’s something that we clearly need to be a aware of, which I think we are. Other units on campus are aware of it. Development is ongoing at a place like the University of Texas — in all departments.”
Contact Brian Davis at 512-445-3957. Email email@example.com.