Athletics continues to be a high-dollar enterprise for Texas colleges. The eight public Texas universities that play in the Football Bowl Subdivision — the top level of college football — spent more than $525 million on athletics in the 2014-15 school year. Football is consistently the top revenue-producing sport, followed by men’s basketball. This series looks at the finances of Texas universities’ athletic departments.More in this series
Last August, as the University of North Texas football team was gearing up for what would be a 1-11 season, Athletic Director Rick Villarreal asked his school's oversight board for a financial boost.
His department was working hard to keep up with the rising costs of college sports, he said. But current revenue and private donations could only do so much. He needed more money from students to cover the department's needs.
"We feel like it is a plausible move at this time to make sure that we continue to move forward," he said, adding that sports are important to the entire university.
Minutes later, the UNT System Board of Regents unanimously approved his request with no debate. The move added up to $15 to the athletics fee included on full-time students' per-semester bills.
With that quick action, the university furthered a growing trend of Texas schools reaching into their students’ pockets to help pay for their athletic ambitions. The Texas Tribune reviewed annual financial reports submitted to the NCAA by all eight public universities in Texas that play in the highest level of college football, the Football Bowl Subdivision. (Private colleges also have to submit records but don’t have to make them available under state open records laws.) In 2008, the schools collected $27 million in student fees that went to athletics. In the 2015 fiscal year, that number had more than doubled to $57 million.
The UNT hike was no one-time thing. The university and its students had already been chipping in significantly in past years. And although UNT’s sports revenue has been on the rise since 2010, expenses grew even more. Records filed by UNT indicate that the athletic department has relied on subsidies from the university and student fees to fill the gap.
In the 2010 fiscal year, the department had collected $5 million in subsidies from those two sources to round out its budget. By 2015, that number had quadrupled to $20 million.
The situation is the same at many Texas universities. All of the schools that play FBS football are grappling with growing expenses brought upon by conference realignment, fast-growing coaches’ salaries and new rules pertaining to athletic scholarships and benefits.
For the major programs like Texas A&M University, Texas Tech University and the University of Texas at Austin, those costs are manageable. Revenues are growing just as fast. But the rest — UNT, Texas State University, the University of Houston, the University of Texas at El Paso and the University of Texas at San Antonio — are having a hard time keeping up.
Athletic department officials say the fees are ultimately good for their schools. Successful sports teams provide millions of dollars’ worth of university marketing, encourage school spirit and inspire alumni to donate to their alma maters, they say.
“Athletics brings alumni and community together,” said UTEP Athletic Director Bob Stull.
Plus, students at most schools that pay athletics fees get free admission to games, while students at non-fee schools like UT-Austin and A&M can buy tickets at a discounted rate. But by not imposing student fees, UT-Austin and A&M students are able to opt out of sending money to athletics. Students at the schools that collect fees don’t have any choice but to pay.
The growing use of those students’ money is alarming to some people inside and outside the universities.
“It's getting worse and worse and it's going to continue to get worse and worse,” said Andrew Zimbalist, a sports economist at Smith College. “There really has to be some structural reform, and neither the NCAA nor the conferences are coming to grips adequately with it.”
Big money changes
Many of the new expenses are, ironically, the result of how much more money college sports are generating. College football, the big athletics cash cow, has never been a more valuable television commodity. Millions of fans watch games each fall weekend. And live sports are vastly more important to television networks than they were even a decade ago, because so many people watch the games live and can’t use their DVRs to fast-forward through commercials.
The right to broadcast games are controlled by the conferences, which sell them in multibillion-dollar packages to networks like ESPN and Fox. That money helps drive up costs like coaching salaries. But it has also shaken up how college sports are organized. The conferences, which were once collections of regional schools, have found that they can bring in more money if they have broad geographic appeal. That has helped drive all of the biggest conferences to add teams from outside their traditional geographic areas in the past decade.
The smaller conferences haven’t seen as much of an influx in television money. But the realignment has caused a ripple effect that reaches their schools, too. For example, the University of Houston was for decades a part of Southwest Conference, which was mostly made up of teams from Texas. In 1996, UH moved to Conference USA. But the recent round of realignment moved it to the American Athletic Conference, where it competes against teams in Philadelphia, Storrs, Conn., and Tampa, Fla.
Meanwhile, Conference USA, which currently includes UTSA, UTEP and UNT, has teams from 10 states. And that means the conference’s Texas teams must regularly fly to play Marshall University in West Virginia and Florida International University in Miami, among other locations.
That distance combined with, until recently, high energy prices has pushed up travel costs for those four universities up by more than 50 percent in the last seven years, to a combined $11 million in 2015, according to NCAA reports.
Separately, those massive new television deals have raised complaints that universities are exploiting their athletes. In response, the NCAA has loosened regulations on the benefits that universities can provide. Colleges can now feed their athletes an unlimited amount of meals and snacks each day. And schools are now allowed to cover more than just their athletes’ tuition; they can include in their scholarships the full cost of attending college. (The cost of scholarships has also gone up as college continues to become more expensive.)
Many university officials have lauded the new benefits for athletes. “It gives the student-athlete the same opportunity for financial aid as a regular student,” said Stull, the UTEP athletic director.
But the changes have added hundreds of thousands of dollars in annual expenses to many schools’ budgets. UTEP, UTSA, Texas State, UNT and UH’s combined costs in 2015 were $70.1 million above what they were seven years earlier. Earned revenue during that time grew by less than half that.
Making dramatic cuts wasn’t much of an option if the athletic departments wanted to remain competitive. So that left two choices: They could ask their universities for “direct institutional transfers,” which are dollars sent from the university to athletics. Or they could take more money in student fees.
In most cases, the schools did both. In 2008, UNT athletics collected $4.6 million from student fees. By 2015, that figure had more than doubled to $10.7 million. At UTSA, the number nearly doubled from $6.1 million to $12 million in the same time frame. At Texas State, it more than tripled from $5.3 million to $17.3 million.
A portion of those increases can be attributed to enrollment growth — more students paying fees means more money coming in. But costs have gone up for each individual student, too.
Institutional transfers also grew at UNT, UTEP, Texas State and UH. In 2008, UNT gave its athletics department just over $14,000 to supplement its sports revenue. In 2015, it provided $9.3 million. UTEP, UH and Texas State each increased their transfers by between $2 million and $5 million over the same period.
The universities often say they are increasing institutional transfers and student fees to keep pace with their competitors. Stull defended UTEP’s student fees by noting that it collects the smallest subsidy out of anyone in Conference USA. When Villarreal proposed increasing the student athletic fee at UNT, he told regents that UTSA and Texas State each collected more than his department. And when a UTSA vice president was asked about athletic fees during a student forum this fall, he noted that almost every college in the country relies on some kind of subsidy.
“The basic problem in college athletics is that the departments of athletics don't respond to stockholders and hence don't have direct market pressure on them to show profits at the end of every year,” said Zimbalist, the sports economist. “In college sports, even though you'll have a college president saying ‘I don't want you to lose money’ or ‘I want you to be careful,’ the fundamental pressure on the athletic director and on the coaches is to win.”
Student support for the fees has been mixed. In most cases, students voted overwhelmingly in campus referendums to approve student fees at their schools. Often, students rallied around the idea that the fees will make their teams better.
But more money doesn’t necessarily guarantee success. In 2008, UNT students voted 58 percent in favor of a new $10 fee devoted to athletics. But UNT’s football team has only reached a bowl game once since 2008. Attendance at 2015 home games averaged a paltry 13,631 — at a school with more than 32,000 undergraduates.
The team’s only win last year came against UTSA, which had similar high hopes in 2007 when two-thirds of its students voted to allow its university to double its athletics fee.
That money was used to help create a football team from scratch. UTSA hired Larry Coker, a former national championship-winning coach at the University of Miami, at an annual salary of $200,000. He had two winning seasons in his first three years, but resigned after going 3-9 in 2015. His replacement, Frank Wilson, was hired with a four-year contract that pays him $650,000.
During the difficult 2015 season, UTSA considered increasing tuition and fees again. But while that was under consideration, UTSA’s student government surveyed students. Many supported increased tuition, and said they backed a plan to raise fees for more bus services. The one idea they opposed? More fees for athletics.
“They wanted to invest it in something else,” said Student Body President Ileana Gonzalez. “People were like, we are not even winning. Why is our money going to athletics when we are here in college to get an education?”
Jamie Lovegrove contributed to this report.
Disclosure: The University of Texas at Austin, Texas A&M University, Texas Tech University, the University of Houston and the University of Texas at San Antonio are corporate sponsors of The Texas Tribune. The University of North Texas was a corporate sponsor of the Tribune in 2014. The University of Texas at El Paso was a sponsor of the Tribune in 2012. A complete list of Tribune donors and sponsors can be viewed here.