DeLoss Dodds: The Warren Buffett of Collegiate Athletics
Like a lot of folks over the past couple of years, several big-time collegiate athletic programs have seen their endowment portfolios drop faster and deeper than a Cole Green curveball.
According to the Bloomberg News, however, UT is one of the few programs who actually saw its operating revenues go up since 2007, thanks to its investing in stadium expansions rather than securities.
Bloomberg News reports that of the athletic departments with more than $90 million in operating revenue, the biggest gainers were the Texas, up 32 percent to $138.5 million; LSU, up 32 percent to $100.9 million; and Texas A&M, up 33 percent to $98.1 million.
Bloomberg News received financial statements for the fiscal years ending in 2007 through 2009 from 51 public universities in the Atlantic Coast, Big East, Big Ten, Big 12, Southeastern and Pacific 10 conferences after filing open-records requests.
For Texas, the robust figures were driven by the decision in 2006 to renovate both DKR Texas Memorial Stadium and UFCU Disch-Falk Field.

Texas is already realizing a $10 million a year return on its investment in expanding DKR.
The annual debt on the renovations to DKR is $14 million. However, the addition of 13,000 seats along with 2,200 club seats starting at a minimum $2,000 annual donation, as well as 47 suites priced from $62,000 to $75,000 has helped to generate an additional $24 million for football.

UFC Disch-Falk Field now has 19 suites priced from $32,000 to $40,000 plus catering; 400 club seats at field level priced at a minimum $750 annual donation plus the tickets to help increase the revenue stream for baseball.
Meanwhile again according to Bllomberg News, 45 of the largest U.S. college athletic programs lost a combined $209 million in their investment portfolios between June 30, 2007, and June 30, 2009.
Texas' decision to invest in expansion rather than equities proved to be a case of perfect timing.
“Had we gone with endowments, we'd be down 30 percent,” Dodds said. “This is a huge success.”
Most of the programs won't know the total damage done by this recession on their bottom line at least until the 2009-10 data becomes available later this year. Meanwhile, thanks to the combination of on-the-field success, and an upgrade of facilities, UT expects donations to increase this fall.
Facility upgrades are just part of the story of the overall strength of the UT athletics program. A look at the revenue breakdown from 2008 (the last year where full numbers are available) paints a picture of a program that was well positioned to take advantage of the success of the football team beginning with the Vince Young Era.
Ticket Sales: $44,691,119
Texas led the nation in combined ticket sales revenue (Football, Basketball and Baseball).
Contributions and donations to athletics: $35,057,421
Again, winning makes it easier to hit the alumni and donor pocketbooks.
Money from the NCAA and conferences: $11,346,333
There is still a great deal of resentment among other Big 12 members for Texas blocking any kind plan that is an NFL-style revenue sharing plan. When the Big 12 implodes, this will be used by some of the programs left behind as a reason to bitch.
Money from licensed products, advertisements and sponsorships: $16,639,171
When Dodds arrived at Texas, the football and basketball coaches were making their own TV and radio deals for extra income. It was a system fraught with peril, including possible conflict of interests and money laundering problems. It led Texas to be a pioneer among major athletics programs in outsourcing first the local media rights to Host Communications, thus taking the coaches out of the money raising business, to eventually making a turn-key deal with IMG for everything from media to sponsorships and licensing.
It has been a rousing success.

Ever since Vince Young led the Horns over Michigan in the 2005 Rose Bowl, Texas has led the nation in licensed apparel sales.
When Texas defeated USC for the national championship in 2006, the Horns set a record for licensed apparel sales with over $8 million. Michael Jordan helped put North Carolina at the top of the sales charts on a yearly basis for almost two decades, and now Texas has been the champ for the last five years.
Alabama was second this past year, and has seen their sales increase 46% since the hiring of Nick Saban.
The Texas basketball teams' fall from grace this past season has been chronicled here on Barking Carnival in painful detail. It remains to be seen if it is just a blip on the Rick Barnes Era radar, or if it is the indication of fundamental cracks in the program. Right now, the financial bottom line is still thriving.

For the moment, BEVO can still relax, since Texas basketball turned a $6.9 million dollar profit in 2008-09.
Texas basketball still remains among the elite when it comes to making money. In 2008-09, the program was the 8th most profitable D-1 basketball program. According to a CNBC survey, Louisville turned the most profit at $16.9 million. Kansas was sixth on the list, while Oklahoma State was 12th.
As for on-the-court success, nine of 15 most profitable basketball programs did not make it out of the first weekend of play in the 2010 Tournament. Michigan State and Kentucky were the two programs listed just behind Texas in the Top Ten.
Dodds has been Athletics Director at Texas for 29 years, and has taken more than his share of hits over that time, especially for some of his hiring decisions. There can be no doubt however that over the past two decades he has helped guide Texas through some economic shark-infested waters and has the set program as the Gold Standard of collegiate athletics.
At 72 he obviously is nearing retirement. Perhaps he has one more task to attend to -- leveraging this unique position of strength into the best possible deal for Texas when the next round of musical chairs takes place in the BCS conferences.
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“athletic programs have seen their endowment portfolios drop faster and deeper than …
a Cole Green curveball"
You took the high road there. Good for you sir.
by UT_06 on May 4, 2010 10:02 PM CDT reply actions
12th most profitable basketball program and a half full arena every game. Ticket prices are astronomical in Stillwater.
by Ibas water bottle on May 4, 2010 10:19 PM CDT reply actions
Texas only made $11 million in ‘08 from the NCAA and the Big 12? That doesn’t sound right. I thought the Big 12 football TV package alone netted Texas over $15 million per year. With all the talk of conference TV deals swirling around, maybe I have my numbers mixed up, but this sounds low.
That photo of burnt orange Texas gear shouldn’t be taken for granted. When I was a freshman (’96), I went down to the Co-op to get an orange shirt. There were two (2!) in the whole store, and one was a replica football jersey. Everything was white, grey, and dark blue. (Go back and watch your old tape of the ’96 Notre Dame game, and see how much orange is in the stands; almost none outside the band.) While Vince and crew sure did their part, I have to credit Mack Brown. Since the day he arrived in ’08, he got the fans to start supporting the team more like a Big 8/ SEC fanbase.
by hoju on May 4, 2010 10:22 PM CDT reply actions
I thought the Big 12 football TV package alone netted Texas over $15 million per year.
Not even close — each school gets about $7 million from the current TV contract — Texas gets a little bit more because of the weighted distribution (the more times you are on TV the more you get) but it isn’t that much more.
by srr50 on May 4, 2010 11:12 PM CDT reply actions
To compare this, SRR, what does Mississippi State make on their TV deal? Northwestern?
by Sailor Ripley on May 4, 2010 11:14 PM CDT reply actions
Thanks Sailor
Vanderbilt gets around $18 million a year from the SEC TV contract, and Northwestern pulls in about the same amount from the Big 10.
by srr50 on May 4, 2010 11:17 PM CDT reply actions
by Sailor Ripley on May 4, 2010 11:22 PM CDT reply actions
Was pleased to see A&M moving up, as we should be. Bill Byrne – as much as I detest him – has done an admirable job of growing the business and increasing revenue.
Both programs need to control their cost sides a little better – A&M obvioulsy moreso that y’all. Both programs ran at a pretty slim surplus last year.
by Ag_in_TX on May 5, 2010 9:22 AM CDT reply actions
“Money from the NCAA and conferences: $11,346,333
There is still a great deal of resentment among other Big 12 members for Texas blocking any kind plan that is an NFL-style revenue sharing plan. When the Big 12 implodes, this will be used by some of the programs left behind as a reason to bitch.”
The difference in revenue between what UT gets and what Baylor gets is just a few million- not enough to seriously hurt Texas if it was shared, nor enough to make Baylor athletics self-sufficient if it were shared. This should not be a source of envy and resentment. It should be an incentive for other programs to market smarter. It’s like the bitter employee who refuses to work late on the new product launch because he resents the new guy making 5% more than him.
by TaylorTRoom on May 5, 2010 9:44 AM CDT reply actions
A&M had a larger percentage increase than Texas—that’s the bigger story if true given all their issues. Texas success is the product of an overdue expansion compared to securities investment made while the market plummeted. The schools that invested wisely are doing much better this year.
by the clapper on May 5, 2010 9:59 AM CDT reply actions
Yeah. Srr provides better info on this topic and the impending realignment of BCS conferences than anyone.
Doesn’t he get all or most of his info from his Bill Little?
by beowulf on May 5, 2010 10:37 AM CDT reply actions
“Go back and watch your old tape of the ‘96 Notre Dame game, and see how much orange is in the stands”
I would, but right now I’m busy with the 1997 UCLA game, and home movies of my grandfather’s chemo and funeral.
by nordberg on May 5, 2010 11:48 AM CDT reply actions
srr50 -
Fantastic stuff. I think I knew some of these pieces individually, but never saw them weaved together in one place. This is a good future bookmark and reference for me.
DeLoss has had his ups and downs, and the last 10+ years have been ups, but aside from his fluency on the business end, he has always done a good job of sublimating his ego. Not an easy thing to do in that position. He makes it about the kids and the coaches and seems a tad apologetic when the spotlight is on him. Contrast and compare with Bill Byrne. You don’t have to read many of his Weekly Wednesdays to get a sense that it’s about him.
There’s no question that making Texas athletically successful and economically viable isn’t too tough a task, but I do question whether just any athletic director could maximize as well as Dodds has.
Re: Northwestern – I believe their payout was 22 million, same as the other Big 10 schools. But what’s 4 million dollars to men such as us? HA HA HA HA.
by Scipio Tex on May 5, 2010 12:31 PM CDT reply actions
Don’t forget that trick he does where he whistles(rrrrrwwww) when he talks(rrrrrwww). Love that one.
Bill Byrne covers his loins in bat guano before he goes to bed. True story.
by Vasherized on May 5, 2010 12:49 PM CDT reply actions
23rd is unacceptable.
The Suns inspired the Ags to wear special uniforms tonight. “Texas A&M” will be replaced with “Los Ers.”
by Truth in advertising on May 5, 2010 1:05 PM CDT reply actions
Dodds earns the Buffett comparison only when he gets seen at the Beijing Macdonald’s in the company of Bill Gates.
Using coupons.
True story.
by parlin on May 5, 2010 1:22 PM CDT reply actions
Well written piece. But I have to say, as I’ve watched all these reports with interest, there is one key piece of data that tends to escape mention:
Austin is the largest city in the country that has no tier-one (read: MLB, NBA, NFL, or NHL) professional sports team.
As well as our on-the-field performance has gone, as well as the program profile development has gone, as well as the fundraising, stadium-building, and empire-building has gone, you can’t tell me tht fact doesn’t play some role. As UT has built itself, so have the NBA, the NFL, and to some degree MLB (no comment on hockey). As people everywhere have flocked to more sporting events, become more willing to shell out more to be involved, and as Austin has grown by leaps and bounds in terms of people and affluence, what degree of this success has come from Austin’s very unique situation as a college town with no pro sports?
I’ll hang up and listen.
by WLHorn on May 5, 2010 4:47 PM CDT reply actions
Austin is the largest city in the country that has no tier-one (read: MLB, NBA, NFL, or NHL) professional sports team.
Of course it is an advantage, as it is for Ohio State (like you I discount the NHL), USC (no NFL franchise) and other teams in smaller markets like Alabama, Florida, Penn State and Wisconsin.
The Austinmetro area has only recently reached a population base that might support a tier one pro team — thanks to explosive growth over the past decade. As it is, Austin is the perfect size to support elite level minor league franchises while keeping UT as the center of the sports universe.
Those minor league franchises (Round Rock Express, Texas Stars) correctly assumed that building state-of-the-art facilities would best succeed outside Austin, where they could get the suburbs to help financially while also still being a viable leisure time choice for those within the Austin city limits.
by srr50 on May 5, 2010 6:58 PM CDT reply actions
Scip: Thanks. I have a couple of friends who graduated from UT then went to Northwestern for graduate school, and they found the discrepency among TV dollars between the Big 12 and the Big 10 very amusing.
BTW, the Big 10 network is now available in Austin for $6.99 a month on TWC.
by srr50 on May 5, 2010 7:39 PM CDT reply actions
srr, we get the Big 10 net here in Austin on Uverse, not sure about satellite.
by tim on May 5, 2010 9:16 PM CDT reply actions
Aggie – Why would there be any need in college athletics to run a surplus? Break even or just above is optimum for maximum performance on the field and best experience for athletes and students and fans who enjoy the sports. Universities are not corporations.
by MoFo on May 7, 2010 12:25 AM CDT reply actions
For facilities upgrades, now that the universities are forcing schools to pay for it themselves.
by Ag_in_TX on May 7, 2010 12:41 PM CDT reply actions
“tim said:
May 5th, 2010 at 7:16 pm
srr, we get the Big 10 net here in Austin on Uverse, not sure about satellite."
might want to change your account name. unless you are the Tim
by dick on May 7, 2010 1:11 PM CDT reply actions
WLHorn
I thought Las Vegas was the biggest city without a tier one team…
by steve wynn on May 9, 2010 9:14 PM CDT reply actions
Vegas far surpasses Austin in douchebags with Ed Hardy shirts, jorts and straightbilled caps, but that’s about it. Austin population is 700k+ to Vegas’ 500k. Throw in the homeless and Austin is creeping up on a million.
by WLHorn on May 10, 2010 12:40 PM CDT reply actions

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