Editor's note: This story has been updated throughout.
Steve Patterson’s time as athletics director at the University of Texas at Austin will be remembered for his efforts to cut costs and raise revenues during a time of financial uncertainty in college athletics. His exit, meanwhile, will probably bring one more big expense for Longhorn sports.
Patterson resigned Tuesday under what UT-Austin President Greg Fenves described as a mutual agreement. He'll be replaced by Mike Perrin, a Houston lawyer and former Longhorn football player.
"This has been a decision that had been building over recent weeks," Fenves said. "I felt that the risks of not accepting his resignation at this time and trying to have him stay outweighed the benefits. I think we both mutually agreed that this was the right time."
Patterson leaves less than two years after signing a contract that pays $1.4 million per year through August 2019. He was promised a 2.5 percent raise each year and received benefits like a car allowance and a country club membership.
There was no buyout included in the deal, though the school did have the right to reassign him. After negotiations, Patterson and the university reached some sort of deal. But school officials would not discuss the terms, saying it had to be approved by the UT System Board of Regents first.
Perrin will be on contract with the school through at least August 2016, Fenves said. He'll be paid an annual rate of $750,000.
UT-Austin has already spent millions in recent years paying off departing coaches or administrators. At the end of the 2013 football season, longtime coach Mack Brown was shown the door. The school eventually agreed to pay him a $2.75 million buyout and give him a one-year job as special assistant to the president. That job paid $500,000.
Under Patterson, longtime basketball coach Rick Barnes was forced to resign. The school said this spring that it would pay him $1.75 million.
Patterson is earlier in his contract than each of those two coaches. Patterson's contract promises him more than $5 million over the next few years, but it's possible he'll get significantly less than that in the deal.
Buyouts are common in big-time college athletics, though it’s somewhat rare for a school to pay so many in such a short time period. If anyone can afford to pay, it’s UT-Austin, which usually brings in the most revenue from sports in the country. The UT-Austin athletics department generated $161 million in revenue in the 2013-14 fiscal year, according to its NCAA financial report.
Patterson joined the Longhorns in November 2013. During his tenure, he made two high-profile and popular coaching hires – football coach Charlie Strong and basketball coach Shaka Smart. The excitement about the football hire has worn off a bit lately, as the Longhorns went 6-7 last year and lost badly to Notre Dame in the 2015 season opener.
But he also generated ire from many fans and donors for his perceived narrow focus on making money for the department. Many fans complained about increased ticket and parking prices for football games. At last weekend’s home football opener, there were many empty seats. Program insiders, meanwhile, were frustrated with personnel and management decisions, including the firing of popular Assistant Athletics Director John Bianco, who handled media relations or the football team.
"I literally heard from hundreds, if not thousands, of individuals over the three months I have been president," Fenves said. "It was a wide range of opinions."
Patterson also made news for seeking to grow the international brand of the Longhorns. He explored playing a football game in Mexico City and arranged to open the basketball season with a game in China.
Patterson defended his actions by noting that the department lost money in 2013-14 and was incurring increased expenses due to the cost of feeding athletes and an NCAA rule allowing universities to pay athletes on scholarship the full cost of attending school.
Fans were unconvinced, and many questioned whether he was trying to treat the tradition-laden athletics program like a business. Patterson joined UT-Austin from Arizona State, but spent most of his career in pro sports.
In a statement released late Tuesday, Patterson said he remains devoted to his school.
"I am very proud of what we have accomplished in a relatively short period of time, including the historic addition of coaches in football and basketball, improvements to ticketing operations, facilities and other initiatives that will greatly benefit our Longhorn student-athletes and the many fans who care deeply about them," he said. "As a Longhorn myself, a graduate of the University and its law school, I want nothing but the best for my alma mater, and I wish President Fenves and everyone at UT-Austin well as we continue the journey. I leave behind a motivated and dedicated team committed to the world-class standards that all Longhorns expect."
Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. Mike Perrin is a donor to The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.