About this series: The University of Texas athletics department will spend about $210,000 for each of UT's 511 student-athletes.

Exactly what that money buys and why the sports budget has grown so rapidly.

The tax breaks that fuel athletics spending and the struggles of some schools to keep up.

Big payday for calling the plays


By Eric Dexheimer
Sunday, September 30, 2007

The biggest single item in the University of Texas athletics department budget is salaries, wages and benefits, which, at $32 million (plus another $900,000 set aside for anticipated incentive payments) represent almost a third of total expenses. Collectively, athletics department pay has risen 50 percent since 2000-01.

Name coaches with multimillion-dollar deals get all the attention. But the big paydays have trickled down to top assistant coaches and administrators, as well.

The money is spread across a sprawling department - about 260 full-time employees and dozens of part-timers, including former Longhorn running back Earl Campbell, who is paid $50,000 as a half-time special assistant. (Former coach Darrell Royal also draws a $50,000 part-time salary as an assistant to the university president.)

But University of Texas coaches also collectively make higher salaries than any school in the country except Ohio State (which employs nearly twice as many coaches), according to a database of NCAA financial reports. Texas A&M ranked fourth in the country.

An outsized portion of the money goes to basketball and football, where salaries have skyrocketed. Mack Brown earns $2.8 million a year, four times his starting pay in 1997. When A&M basketball coach Billy Gillispie left for a $2.3 million job at Kentucky this spring, he walked away from $1.8 million - nearly three times his starting pay just three years earlier.

University of Texas-Austin faculty, by comparison, have averaged 4.34 percent raises (the actual merit pool for continuing faculty in many colleges was well below 2%) over the past five years.

Big salaries don't always equal big wins. While Brown has rejuvenated the Longhorns' footbal program, Aggie football coach Dennis Franchione, who earns $2 million a year, has barely won more games than he's lost while at A&M.

A coach rarely pays a penalty when a team performs poorly. Franchione got a $300,000 raise in 2005, after a 7-5 season that ended with a Cotton Bowl berth. But he didn't lose any of that money the following year, when the Aggies went 5-6, 3-5 in the Big 12.

Coaches can be fired, of course. But sacking them often is expensive. According to Franchione's contract, which recently was extended through 2012, Texas A&M would have to pay him $142,000 - a month - until he finds a new job.

Adding up the extras

Athletics directors and supporters say successful coaches more than pay for themselves by attracting fans, donors and sponsors. UT football will bring in $63 million this year.

That means Brown's compensation equals about 5 percent of the Longhorn football program's total revenue. At that rate, computer magnate Michael Dell would earn about $2.8 billion a year. (His actual pay was 5 percent of that last year, according to Forbes.)

Approximately one out of every six dollars the UT men's basketball team brings in goes toward Rick Barnes's $2 million paycheck. If former UT President Larry Faulker had the same deal, he'd have averaged $47 million a year as his share of the $2 billion in development funds the university raised during his seven-year tenure. (He was paid about $520,000 a year.)

Most big-name coaches get a couple of cars and a generous expense allowance. Barnes received $7,500 for a speech at a Catholic school last year. Brown collects $120,000 annually to act as chairman of the board of the University of Texas Golf Club (where insiders say he mostly schmoozes supporters).

Incentives - official and otherwise - add more money. Brown collected more than $200,000 for winning the national championship in 2005.

Less well-known is that a group of influential alumni known as Mack Brown's Kitchen Cabinet quietly handed the football coaching staff an additional $100,000 to split after the Rose Bowl win, and gave the department $200,000 more to upgrade player facilities. Brown's newest contract contains $950,000 in possible performance incentives; Barnes's carrots total $800,000.

Salary "supplements" also boost paydays. Typically between 4 and 9 percent of their regular salary, coaches collect them for extra labor when their team reaches the post-season. For working the Rose Bowl two years ago, UT's football coaches split $388,000.

Annuities and retention bonuses are an increasingly popular perk. Brown received a $1.6 million annuity in 2004. He'll collect another $1 million if he's still on the job in 2009, and $2 million more the following year. (A provision buried in the coach's newest contract also promises him future employment in a "significant position" when he stops coaching.) UT regents recently gave Barnes two $1 million annuities, payable if he stays in the job long enough.

The bonuses are big because coaches often get better money by job-hopping, and schools typically pay their replacements more. After 31 years as the Longhorn women's basketball coach, Jody Conradt was earning $550,000 when she retired this past year. The school replaced her with Gail Goestenkors from Duke - for $1 million, plus incentives worth $270,000.

Top coaches cost even more indirectly as administrators entice them to stay. UT recently bought a $400,000 state-of-the-art video system to help Brown analyze game and practice films. A&M hoped constructing a new $22 million, 68,000-square-foot basketball practice facility, which Gillispie helped plan and design, would keep the coach happy.

This spring the University of Kentucky lured Gillispie away anyway - where he'll practice in the Wildcats' new 100,000-square-foot, $30 million practice facility.

Trickle-down effect

The lucrative deals are filtering down. This past year, Texas A&M's three new assistant basketball coaches collectively earn $100,000 more than last year's crew. Greg Davis, the Longhorn football team's offensive coordinator, will earn $350,000 in 2007; the team's two defensive coordinators get $300,000 each. In all, Brown's nine assistants make $2 million a year, up 51 percent from 2000.

One of the hottest positions in college sports today is the strength and conditioning coach. Not so long ago a good one would be lucky to make six figures. This year, UT's football strength coach, Jeff Madden, will earn $200,000.

In all, 10 UT coaches earn more than $200,000, including baseball coach Augie Garrido ($610,000) and women's track coach Beverly Kearney ($258,000). The average salary of a full professor at UT-Austin in 2006-07 was $121,200. UT-Austin President William Powers Jr., earns $577,500.

Another beneficiary of salary creep are the administrators who oversee the growing sports departments. In the 10 years he led Texas A&M's sports program, Wallace Groff's salary rose modestly to $208,000 when he retired in 2003. His replacement, Bill Byrne, was hired from Nebraska at more than double that. His raise this year increased his annual pay to $486,000.

As one of only a small handful of universities in the country with separate athletics directors for men's and women's sports, the University of Texas is in its own superstrata of top-paying schools. In 2005, DeLoss Dodds, the men's director, earned $455,000. Raises since then have brought his salary and incentive payments to $700,000 annually, not including a $750,000 annuity he'll be paid in 2011.

Women's athletics director Christine Plonsky, meanwhile, got a 19 percent raise last year that bumped her potential compensation to $340,000. That puts the total UT pays its athletics directors over $1 million for the first time.

TGP adds: FYI and comparison here is the recent breakdown of faculty salaries (for 2006) at UT Austin.



The Longhorn economy
The University of Texas athletics department is among the nation's biggest and best. But as it prepares to spend more than $100 million this year, some ask: Are there limits?

By Eric Dexheimer
Sunday, September 30, 2007

$107.6 million

This year, the University of Texas athletics department will for the first time spend more than $100 million. That's double the amount of just six years ago. Since 2000, sports expenses have grown twice as fast as UT spending overall.


$20,000 per game The night before home football games, Longhorn players stay at a local hotel. The idea is to build team spirit - and to help keep the players free of distractions before the game.

$200,000 After the 2005 national title, the football team was rewarded with a renovation of the players lounge. The lounge now features leather recliners, TV projectors and flat screen TVs.

$50,000 per game The new Godzillatron scoreboard and sound system are expensive additions to UT games.

The UT football locker room features a lounge area with game tables, 125 personalized lockers for the players, five flat-screen TVs and a three-dimensional, lighted 20-foot Longhorn on the ceiling. The facility, which is named the Howard L. Terry-Bobby Moses Jr. Longhorn Locker Room, is described on the UT athletics department's Web site as 'one of the finest collegiate locker rooms in the country.'

$300 per day Each practice, UT football players board a bus near the football stadium and ride it to the practice field to keep them out of harm's way crossing major intersections on foot.

$155,000 The Longhorn football team recently purchased a new hydrotherapy room. This year, it added a new rehab pool with an underwater treadmill monitored by video cameras for $43,000.

The rapid growth is the result of the Longhorns' financial independence. Unlike other departments at the University of Texas, athletics gets to spend virtually everything it earns.

And thanks largely to income generated by the UT football team (and, to a lesser degree, men's basketball) the department earns plenty. The Longhorns' move to the Big 12 conference in 1996 gave the team additional national exposure. That, coupled with the team's on-the-field successes and an explosion in expensive luxury seating (next year the football stadium will boast three premium club seating areas and 111 suites costing between $50,000 and $88,000 a year each) have tripled football revenues over the past ten years, to about $63 million this year.

At the same time, UT has made a deliberate decision to limit the intercollegiate sports it supports. Ohio State University's athletic department also spends about $100 million per year on sports. But the Buckeyes have twice as many teams as the University of Texas, which has one full time athletic department employee for every two student-athletes.

Indeed, following a national trend, the number of Longhorn student-athletes has fallen slightly, so the amount of money the university spends per athlete has soared, from $113,000 in 2003 to $210,000 this year. That's 10 times the average of all Division I and II schools, according to the National Collegiate Athletic Association. It's eight times what the University of Texas spends educating each student.

Administrators say that because the sports program is self-supporting the importance of such numbers is exaggerated. "We eat what we kill," said Ed Goble, the athletic department's chief financial officer.

Critics disagree. "There is no justification for such escalation," said Donna Lopiano, a former UT women's athletics director and recently retired CEO of the Women's Sports Foundation. "It's an embarrassment to spend $100 million on 500 kids."

An athletic department that spends money simply because it can results in "a degree of extravagance that is totally out of whack with what transpires in the rest of the university," said UT accounting professor Michael Granof, who points to sports facilities he terms "beyond opulence." He, along with other reformers, has proposed merging athletics into the university's general fund so its rapidly growing expenditures - four coaches and an administrator now earn more than the university's president - can be reviewed alongside other departments' budgets.

UT's spending also has consequences that reach far beyond Austin, said Dan Fulks, an accounting professor at Transylvania University who studies university sports finances for the NCAA. Programs like UT's, he says, drive up the cost of all college sports - and, in some instances, the price of higher education in general - as schools with less-lucrative teams scramble to maintain a pace of spending that NCAA President Myles Brand has called "not sustainable."

Fewer than 10 out of more than 1,000 college athletic programs nationally make money or break even, according to Brand. (Fulks puts the number slightly higher.) That means 99 out of 100 schools subsidize the cost of intercollegiate sports, often in the form of student fees, which according to the College Board are rising at a rate faster than inflation.

Trying to keep up with athletic superpowers compels competitors to literally mortgage their futures for sports. At Big 12 rival Texas Tech University, four in every 10 dollars of the school's annual debt service goes to repay loans taken out to build or rehab sports facilities.

The loan payments have made Tech's football program one of the most expensive in the country, according to NCAA figures. Last year the athletic department ran a multi-million-dollar deficit, which wiped out its reserve fund.

Big-time sports can cost schools money in other ways, too. This spring, an analysis of Division I-A schools by the Journal of Sports Management found athletic department donations represent a larger and larger share of total university giving. "In some cases, the increase in athletics giving may be coming at the expense of academic gifts," said co-author Jeffrey Stinson, a North Dakota State University marketing professor.

Most schools operate on athletic budgets a fraction the size of UT's. But a review of the Longhorn's expenses by the American-Statesman shows that, in ways big and small, there is a huge difference between athletic programs that buy what they need - and those that spend $100 million.

Longer seasons, chartered jets

UT administrators cite many benefits of the school's athletic department, including rallying school spirit and increasing freshman applications. Locally and nationally, the publicity generated by the Longhorns bathes the entire university in a pleasant burnt orange glow.

"It certainly gets our alumni and community involved in our campus," said President William Powers,Jr., adding that participating in intercollegiate athletics "is a valuable experience for student-athletes."

Lucrative sports programs do allow some students to attend college who might not otherwise get the opportunity. The UT athletic department will pay the university about $7.6 million this year to cover the full or partial cost of tuition and room and board for 412 student-athletes on scholarship. A third of that goes to football players.

The scholarship figure has grown every year as the price of attending UT has risen. But it also reflects the increasingly competitive nature of big-time college sports.

At schools like UT, many athletes stay in school year-round. For football and basketball players, summer sessions are virtually mandatory to get a jump on conditioning and to take summer courses to supplement academic calendars later cramped by practices and games. The extra summer sessions cost $364,000 for football alone.

A winning season adds more to the scholarship bill. Post-season play means athletes are still "in school" when others are home on vacation, so their expenses must be covered then, too. That cost $222,000 last year for football players. When added to the summer costs, one in every four football scholarship dollars is spent on covering expenses incurred when most other students are not in class.

The trend of year-round sports is spreading. Last year the men's swim team's summer scholarship bill tripled; the women's track and field summer costs doubled. In all, $1.27 million will go toward covering athletes' summer and post-season costs this year.

An athlete's education costs more than a regular student's in other ways, too. The athletic department this year will pay $1.79 million-- $450,000 for the football team alone - to tutor and assist Longhorn athletes with their classwork. That's up more than a quarter from two years ago and works out to $3,500 per student-athlete, in addition to the regular $8,000 annual cost of tuition. Academic counselors who travel with the teams add more in travel costs.

UT hires about 200 tutors each year, not all simply to help with classwork. While the Longhorns don't break down tutors' tasks, a review of Texas A&M's athletic budget shows the department paid $30,000 to "class checkers" who make sure athletes attend classes. UT pays $32,000 a year on "quality control" - essentially football dorm supervisors who help the coaches.

The cost of travel rises yearly, and Texas spends more on it than any school except Wisconsin, Ohio State and Florida - all of which boast more student-athletes than UT, according to a database of financial information compiled by the Indianapolis Star.

The Longhorns' success is partly responsible. Arranged at the last minute, post-season travel costs more than regular season trips. The UT baseball team's travel bill doubled between 2005 and 2006, thanks to post-season play.

When the Longhorn football team won the 2005 national championship, it was invited to the White House. The athletic department picked up the tab - $143,000, plus $19,000 for lunch. (A&M spent $16,000 on tickets to Seaworld and the San Diego Zoo during its Holiday Bowl trip last year.)

The Longhorns also travel in higher style than many other schools. Every year the athletic department charters about 20 flights, at approximately $90,000 each, from Continental Airlines.

Sometimes it's to get players back to school more quickly, to get to locations not easily serviced by regular flights or simply to make trips easier on the team. This year's men's basketball travel budget jumped by nearly a third after the team started taking larger commercial charters instead of regional jets so they could avoid refueling stops.

Other times the Longhorns spend the money because they can. By tradition and Mack Brown's preference, the football team charters planes to football games in nearby Houston and Dallas. Each practice, football players board a bus near the football stadium and ride it to the practice field to keep them out of harm's way crossing major intersections on foot. The service costs about $300 per day.

Hydroworx and PlayStations

Big-time schools know that attracting a steady stream of top high school athletes is crucial to their continued success, and the University of Texas spends about $1 million a year recruiting and flying star prospects to Austin. What the teenagers see when they arrive is important, and the school is constantly burnishing its facilities.

Darrell K. Royal-Memorial Stadium is in the midst of a $175 million rehab eight years after a $90 million upgrade; the baseball stadium is getting a $26 million facelift. The golf teams play out of a new $1.5 million clubhouse on a course that just got a $500,000 upgrade.

After the facilities are completed, the meter keeps running. Thanks primarily to the football stadium upgrades, the Longhorn athletic department's yearly debt service will double over the next year, to about $15 million annually. Utilities - air conditioning, heat, water - and maintenance cost the athletic department another $4.75 million a year - $115,000 just to keep the department's grass football, softball and soccer fields soft and green.

Heavily recruited high schoolers expect flashier personal amenities, too, and UT obliges. Following its Rose Bowl victory, the football team was rewarded with a $200,000 renovation of its players lounge, a retreat with four TV projectors (screens drop from the ceiling at the push of a button embedded in a six-foot replica of the UT tower), six flat screen TVs, four X-boxes and three PlayStations.

Two floors down, the football locker room boasts another new lounge area, with five flat-screen TVs and a three-dimensional, lighted 20-foot Longhorn on the ceiling. Men's and women's basketball players can relax in their own private living rooms, each with large TVs, video games and recliners. (New recliners cost $15,020 last year.) The golf teams have a private player lounge at their new clubhouse.

The Longhorns spend about $3 million a year to outfit and staff athletic facilities with trainers, therapists, physicians, chiropractors and masseuses. There are four weight rooms. The football team recently purchased the latest in treatment for sore muscles and recovering bodies: a new hydrotherapy room costing $155,000. This year, it added a rehab pool with an underwater treadmill monitored by video cameras ($43,000) and cold-water pool ($23,000).

Nutritional supplements - Gatorade, Powerbars, etc. - cost $180,000 last year. Medical bills - what the university pays to treat its injured athletes beyond what their personal insurance covers - added just over $600,000, 40 percent of that to treat football players. A high-tech system that monitors an athlete's core body temperature from afar cost $7,000.

The athletic department continues to show its appreciation once recruits become Longhorns. Each year, it gives various rewards to players and personnel - letter jackets and blankets, but also rings, watches, iPods and other swag earned for conference victories and championships. The gifts totalled $537,000 last year.

The department spends about $35,000 annually on the Hall of Fame luncheon for female athletes. By tradition, the football team goes to a movie the night before games: $700.

UT athletes never lack for the best gear, either. Under a sponsorship deal (being renegotiated), Nike provides a $1.6 million annual allowance for equipment purchases, which the Longhorns regularly exceed.

The football team alone bought $408,000 worth of gear in 2006. Upon arriving on campus, each player receives 40 separate pieces of gear and apparel, including multiple shirts, shorts, tights, sweats, gloves, warm-ups, towels, practice shoes, game shoes, running shoes, cross-training shoes and sandals. Everything is replaced when torn, broken or well-worn.

'If the world were different'

The Longhorns' other constituency is those it depends on for revenue - paying fans. Much of the sports program's soaring income is attributable to the explosion in premium seating and well-heeled fans, in particular, are lavished with attention.

Last year, the department spent $380,000 to rehab Athletics Director DeLoss Dodds' suite overlooking the football field, where he hosts donors and dignitaries. (The suite's food and drink bill for last year's Ohio State game: $1,257.) Another $340,000 was spent entertaining the Letterwinners Association, comprised of former athletes.

Money spent wooing and thanking big-spending fans - part of "development" - will come to $3.6 million this year. That includes subsidized parking and parties for big donors on game days in premium seating areas - this year the Goalpost Club was added to the Endzone Club and Centennial Room - and gatherings throughout the year for Longhorn Foundation supporters. The Longhorns employ 14 full-time athletics fundraisers. (The Aggies have 18.)

About $262,000 will be spent in 2007 preparing, cleaning, maintaining and stocking the luxury suites for football, baseball and basketball. (Stocking the football coaches' wives suite costs about $800 a game).

Making money costs money, and last year the athletic department hired two new salesmen to hawk basketball tickets more aggressively. Transforming the department-produced TV show, "Longhorn Sports Center," from a seasonal to a year-round feature added $160,000.

Today's fans demand more than just a game; Longhorn fans demand even more. The football stadium's new high-definition video and sound system that debuted last year cost about $9 million, much of that for the scoreboard. Less known is that UT also paid $3.9 million to buy out the company that owned advertising space on the old board.

Each home football game costs about $400,000 to host, a quarter of that for security, including $3,500 per game for bomb-sniffing dogs, an expense added since the Sept. 11, 2001, terrorist attacks; and $682 a game for the Texas Ranger who shadows Brown. The $50,000-per-game cost of running the football scoreboard doesn't include special programming; last year's new Running of the Horns introduction cost $23,830.

Every game also typically features a theme to entertain and inspire fans. Hence last year's bills for "rental of camo decor package" ($2,030), "wagon props for visual motivation" ($3,200) and "cage with wildcats for visual motivation" ($1,125). A "Just Do What You Do" banner cost $3,900.

Other diversions add up. Paying the Longhorn band to go to the Rose Bowl cost about $500,000. Entertainers who perform at basketball games cost between $500 and $1,000 a game.

When the football team won the national championship, the party the department threw for the campus a week later cost $92,838.67.

In all, the Longhorns expect to spend $107.6 million in the 2007-08 season. UT president Powers says that while such a large tab is "always an issue, to a large extent, it's a business decision."

"If our revenues decreased, if the world were different, we'd have to change," Goble said. "But we're able to maintain our philosophy. Because we have the resources."

edexheimer@statesman.com; 445-1774


UT athletics officials wary of sharing profits

Find this article at:

Sunday, September 30, 2007

Last summer, the University of Texas came up with a way for it and the Ex-Students' Association - the Texas Exes - to make tens of millions of dollars off the UT football team.

According to the deal, the Exes pay UT to reserve rooms at the new on-campus Executive Education and Conference Center on home football game weekends over the next 15 years. Cost: $110,000 per room for 90 weekends. The alumni organization then offers the room packages to big donors in exchange for contributions ranging from $198,000 to $1.5 million, according to a spokesman, and keeps the profits.

If all rooms sell out as expected, the university will collect about $33 million. The Exes will pocket millions more.

Such creative deals are important because, while the Longhorns boast one of the more profitable intercollegiate sports programs in the United States, the athletics department spends virtually every dollar it collects making the sports program bigger and better.

Athletics department officials say they are reluctant to share profits with the university for fear of sparking divisiveness. "We have to be careful," said Nick Voinis, associate athletics director for communications. "You don't want to give money to, say, the business school, because then the engineering school will ask for money."

He said that the volatile nature of college sports also makes generosity risky. "We could lose three or four great players at the beginning of the year and just bottom out. Or, heaven forbid, something happens to Mack Brown."

As the cost of university athletics has soared in recent years and criticism of the spending has sharpened, a handful of successful sports programs have begun pitching in money to support their school's educational mission.

The University of Kentucky's athletics department donated $1 million toward the school's new library. It also has pledged $10 million over several years to fund academic scholarships. Last fall, Ohio State University's athletics department made a $5 million contribution toward its library renovation.

This past August, the University of Florida Athletic Association gave $6 million to the university to cover the costs of academic scholarships threatened by state budget cuts. The Louisiana State University athletics department contributes annually to the Chancellor's Excellence Fund, and a dollar from every football and men's basketball ticket also goes into the Campus Beautification Fund.

The Longhorn athletics department gives relatively little to UT directly or regularly. The athletics department pays about $1.5 million a year to the university's general fund as reimbursement for athletics-related administrative services.

About $600,000 of the $5 million to $6 million UT earns annually from nationally licensed sales of shirts, hats and other paraphernalia festooned with burnt orange insignia also flows to the president's office for use at his discretion. The remainder goes to the athletics department, which, in good years, may give the university more. That last happened the year after the national championship season, when sports gave the school $2.65 million, including $500,000 to endow the Mack Brown Distinguished Chair for Leadership in Global Studies. President William Powers Jr. said the remainder of the money was spent on "high priority" academic programs.

Like the hotel deal, the university also enjoys various windfalls from the teams' popularity. Revenues from football and men's basketball subsidize unprofitable sports, primarily women's teams. Michael Granof, an accounting professor and board member of the University Co-op, said most apparel sales are to students. Those sales spike after big victories, particularly in football.

How to divvy up sports profits is rarely discussed on college campuses. When all expenses are accounted for, the NCAA estimates that only a half-dozen schools can claim excess revenues. (Others say the number is as high as 19.) For the rest, sports must be subsidized. Colleges and universities paid about $3.6 billion last year to support teams, according to NCAA President Myles Brand's testimony to Congress this year.

Texas law prevents state schools from using state money or tuition on sports programs. Universities skirt the rule by drawing cash from student fees and other money generated on campus. The University of Texas-El Paso pays about $10 million annually to prop up its sports program. The Cougars cost the University of Houston about $9 million a year more than the teams earn.

Even UT, which says its Longhorns are totally self-sufficient, chips in some money to sports. The university is picking up about $11 million of the $175 million tab for the football stadium's current renovation, to pay for parts of the stadium that will be used by the student body as a whole. The office of the UT president also pays $100,000 a year for the use of two luxury suites at the stadium.

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