UT Athletics: A successful business model
Eleven months after quarterback Vince Young dashed to his right and ran into immortality as the Longhorns claimed the 2005 National Championship in the Rose Bowl, Ed Goble, the associate athletics director for business, still shakes his head at the public's misconceptions about the impact of that game.
The financial impact to UT Athletics, that is.
"People will read about how a Bowl Championship Series (BCS) game is worth $14, $15 or $16 million dollars to a school," Goble began. "Well, it's only worth that to Notre Dame because they are not a member of a conference."
Goble, who was a football coach before becoming a CPA, is in his 14th season at Texas. He has been in his current position for nine years.
"The Big 12 Conference treats all BCS games the same, whether or not it is the National Championship game," he continued. "All bowl game monies go directly to the Big 12 and the conference disburses the monies to teams throughout the conference.
"Now what the Big 12 does is allow teams a 'participation allowance.' Last year (from the National Championship game), we received $1.7 million for that.
"Also, if the school in a bowl game sells more than its ticket allowance, it gets to keep those revenues. Last year, our ticket allotment for the Rose Bowl was 22,000. Well, we sold more than that and were able to wind up with $2.5 million from the National Championship game. But we spent $2.3 million. It's really challenging breaking even on a bowl game.
"I hope that dispels the notion of how we got 'all that money.'"
That said, Goble hastens to add his remarks certainly are not intended to downplay winning the National Championship.
"Naturally, it was a very good year because of the National Championship," he said. "But, it was a much greater year in other aspects. Merchandise and licensing sales were up. And that benefits The University as a whole."
It also helped since the Longhorns played only five home football games in 2005. Each home game grosses about $4.5 million in revenue.
"It makes me nervous to have only five home games." Goble said, noting that in 2006 the Horns played seven home games. "In spite of only five home games in 2005, it was a good year financially."
The year Goble references is Sept. 1, 2005 through Aug. 31, 2006.
"Make no mistake that football is our cash cow," he said. "Football generates the revenue that allows us to do what we do."
And as far as his remark on how the National Championship impacted other aspects of the UT Athletics program...
"It's just that when you are in a sellout situation (in DKR-Texas Memorial Stadium) as we are, it is harder to capitalize on the team's success," Goble said.
Texas has been in a sellout situation for about eight years, which coincides with Mack Brown becoming head coach.
"We don't have an opportunity to sell more tickets," Goble said.
There were 4,000 additional bleacher seats in the south end zone for the 2006 season, which he said were sold.
"But those seats were added looking forward to the 2007 season when some of our longtime season ticket holders will be displaced by the north end construction project," Goble added.
By 2008, the capacity of the stadium will top 90,000. There will be 47 suites, an 18,000-square-foot academic center and a student center with wireless Internet access and a food court as part of the north end project.
"The people who bought the bleacher seats in the south end in 2006 knew that they would not be able to buy those seats in 2007, but would have first choice in 2008," Goble explained. "We netted $1.2 million with those seats, but we also spent most of that just installing the seats."
Goble reported that there would be an additional 9,000 seats to sell for the 2008 season when the north end renovation project is completed.
"That's when we'll have additional inventory (seats) available," he said.
That's when winning translates into added ticket sales.
Goble points out how college athletics has changed from a business perspective in his years at Texas. He notes that the athletics department is "quite a little business." He expects the budget, which is a little more than $93 million today, to exceed $100 million in the next year or two.
And Goble credits Men's Athletics Director DeLoss Dodds for Texas' business success.
"I call him ‘The Master,'" Goble says, talking about the man who celebrated his 25th anniversary as athletics director this year.
"And I say that with full sincerity," Goble continues. "DeLoss is a master negotiator. He is a master at identifying new sources of revenue, working marketing agreements, the rights package with Host Communications (UT's multimedia rights holder), with concessions and merchandising. He really helps out.
"DeLoss also takes care of his coaches and their staffs. He takes care of his staff. While he is knowledgeable about all aspects of the business operation, DeLoss hires good, knowledgeable people, gives them the resources they need and let's them do their jobs."
In continuing his point on the evolution of college athletics in the last decade-plus, Goble said that college athletics today is very much an entertainment business.
"And DeLoss is a genius at that," said Goble, who also recognized the contributions of Chris Plonsky, the women's athletics director and external services chief.
"Chris is a marketing genius," he said. "What she has been able to do with multimedia, maximizing its effectiveness for the department...
"There is a lot of blood, sweat and tears from both DeLoss and Chris that has made Texas the nationally-respected athletics department it is. People want to know how we do things so well and that all goes back to DeLoss and Chris."
Goble states that Dodds and Plonsky's involvement on a national level with the Big 12's television contracts is important to UT.
And all of this, Goble says, relates to Dodds' goal when he became athletics director -- that the athletics department be a self-supporting entity.
"We take no money from the school for what we do," Goble said. "And we operate in the black. Some years are more profitable than others are, surely -- but we operate in the black."
That ties into another aspect of Dodds' influence -- fundraising.
"DeLoss is such a relationship builder," Goble said. "He connects so well with people. The Longhorn Foundation was his idea, tying in some grassroots organizations under the athletics department. The Foundation has revenues of $24 million today.
"DeLoss is a visionary."
The new videoboard -- the 55 feet tall and 134 feet wide structure in the south end of the football stadium -- is a further example of that. The 7,340-square-foot structure, as of this writing, is the largest such scoreboard in the world.
The videoboard, which was manufactured by South Dakota-based Daktronics, Inc., cost $8 million.
"It was a significant expense," Goble admitted. "But, we felt it was worth it. In addition to what it provides the fans in the stadium on game day, the board provides added revenue opportunities for us.
"You really do have to spend money to make money."
Aggressive. Progressive. That business model has proven to be a success for Texas.