In the big-time football spending war, the rich get richer (cont.)
Myers is correct. While Texas Tech reported total revenues of $53.6 million in 2006-07, Oklahoma made $69.4 million, including $37.4 million on football alone. That allows Oklahoma to offer more competitive salaries for coaches, tutors and athletic department administrators. Economist Rod Fort said a good gauge of a program's place in the college football financial world is how much it pays its head coach. Thanks to a $3 million one-time bonus he's scheduled to receive, Oklahoma's Bob Stoops is on pace to make about $6 million this year. Leach is scheduled to make $1.75 million.
Those revenues also allow the Sooners to quickly raise money for amenities that help football recruiting. They also help Oklahoma pay for other sports. Over a five-year period, Oklahoma spent an average of 43.5 percent of football revenue on football. Texas Tech plowed 90 percent of football revenue back into the football program in the same period. By comparison, top-ranked Alabama used 37.6 percent of its revenue ($39.9 million a year), and third-ranked Texas used 28.2 percent of a revenue stream that brought in an average of $53.2 million a year.
Of course, Texas Tech did not run a deficit. During the same five-year period, Ball State spent 324 percent of its football revenues on football. In its sixth season under coach Brady Hoke, Ball State will put its 10-0 record on the line Wednesday against Central Michigan in a game televised on ESPN2. The school, previously best known for alumnus David Letterman, has given Hoke what he has needed to make the football program competitive for a MAC title, including a privately funded $13 million stadium renovation completed last year. Unfortunately for Ball State, a public school financed by Indiana taxpayers, the football program ran a deficit from 2002-06. In 2006-07, the program made $1.6 million and spent $4.6 million. Despite the devotion of resources to the program, Ball State hasn't seen the leap in revenue Texas Tech has enjoyed.
This type of spending concerns economists, who point out that the very nature of the game dictates that not every program can play its way to a windfall. "It's a zero-sum game," said Brad Humphreys, a professor at the University of Alberta who has done extensive research on the economics of U.S. college sports. "Wins from one program become losses for another program in the conference."
Eventually, Utah athletic director Chris Hill said, departments will have to take a realistic view of what their program should be. Utah is unique because it was the first program from a non-BCS conference to play in a BCS bowl game. The Utes went 12-0 in 2004, beating Pittsburgh in a Fiesta Bowl appearance that was a boon to the program and to the Mountain West Conference. Utah can cash in again this weekend; a win against rival BYU likely would clinch another BCS berth for the Utes, who would pocket $4.5 million for the department.
That rise may have had as much to do with timing as it did the hiring of coaches Urban Meyer (2002) and Kyle Whittingham (2004). Hill explained that Utah raised the money for 10-year-old Rice-Eccles Stadium and for the Utes' training facility in the go-go late '90s, when construction costs were relatively low and when a booming economy made donors more generous. To build Rice-Eccles now, Hill said, would cost at least twice as much. And good luck raising the money or securing financing.
Hill said schools invest in football for "financial reasons, public relations reasons and community building reasons," but he said schools will have to spend prudently. He said that while the money and prestige from the BCS appearance has allowed Utah to put some distance between its football revenues and expenses, "It doesn't change who you are." Though Hill did not address the issue, it would seem that if a wealthy program threw a $3 million annual contract at Whittingham, matching the offer would prove difficult.
Hill believes that, eventually, presidents at schools outside the football elite will have to take a closer look at football spending and choose whether they want their department to keep pouring money into the dream of football prosperity. "We're going to live within our means [at Utah]," Hill said. "Presidents are going to get involved and decide what level of competition they want."
At Texas Tech, the Red Raiders are spending and playing their way to the highest level of competition. Will that last? It's impossible to tell, but one thing is certain: rivals Texas and Oklahoma won't stop spending. Myers has said the school will renegotiate Leach's contract at season's end, but keeping him certainly will require a bidding war. Meanwhile, other schools will try to follow Texas Tech's example, but their odds of success remain low. More than likely, many will keep spending with little to show in return.
"You're not really gaining an advantage over your competitors," Humphreys said. "You're just doing all that spending to keep up."