The University of Texas Wants Texas Athletics to Support Students

The funding of Black and inner-city student outreach and support should fall to the university, not the athletic department

Today, the University of Texas at Austin, where I am a student, released a statement titled A More Diverse and Welcoming Campus in response to a letter of demands from UT football players back in early June.

Many of these changes are long overdue, including the renaming of Robert L. Moore Hall to the Physics, Math, and Astronomy Building and honoring Heman M. Sweatt, Julius Whittier, Earl Campbell, and Ricky Williams in a variety of ways.

The first change listed in Interim President, Jay Hartzell’s, letter is “allocating a multimillion-dollar investment from Athletics’ revenue” to recruit and support Black students through a variety of means and programs. I 100% support this initiative and believe it’s overdue but it’s the clause about “Athletics’ revenue” that raises my eyebrows. I believe that the University of Texas should be the ones responsible for providing support to underrepresented students, not the athletic department.

So, where is that athletics money going to come from?

I took a dive into the University’s operating budget and publicly available financial numbers from 2017-onwards to see if/how Texas Athletics can afford another multimillion-dollar investment (I chose 2017 because the current Athletic Director, Chris Del Conte, was hired in December of 2017). Unless there’s different information than what the university has available, I’m not sure that Texas Athletics has that money to invest and the current COVID-19 situation that wiped out most of the baseball season, won’t help.

Darrell K Royal Stadium last season on September 7th when UT played LSU (photo taken by me)

In a 2019 Houston Chronicle article on Texas Athletics’ finances using documents from a public records request, author Nick Moyle wrote that Texas Athletics has $190.6 million in athletics-related debt. A more recent article has that total around $181.9 million with payments stretching out to 2044 and a $14.6 million payment due in 2020. The debt stems from the expansion of DKR Stadium’s east side under DeLoss Doss. The North End Zone project required donations to begin and the new basketball arena is “free,” except for the $60 million practice basketball arena that Texas Athletics is on the hook for.

That makes sense and is roughly in line with the ~ $15+ million in debt service that the athletic department has been paying over the last few years according to their annual operating budgets. The nearly $11 million in Transfers Out on the 2018–2019 FY Operating Budget initially confused me until I realized that it accounted for the approximately $10 million per year of excess revenue that the athletic department has been sending to the University of Texas. That money has reportedly been used to subsidize student programs, notably eliminating fees for the counseling and mental health programs on campus.

When comparing the Athletics Estimated Income versus Budgeted Expenses/Debt Service/Other over the last few years, it appears that the department operates around a net-profit of $0 once they send the excess to the University.

Keep in mind that these figures are for the 2016–2019 fiscal years, years, where there was no interruption from COVID-19 and Texas Athletics, was able to play every single game they had planned. According to the same Houston Chronicle article I referenced earlier, in 2018 Texas Athletics received about $67 million in ticket sales, $32 million in royalties, $1 million from appearing in the Sugar Bowl, and $20 million in media rights. That comes out to about $120 million in estimated income for the 2018–2019 FY plus about $24 million from the Frank Erwin Center, which in the FY Operating budgets is listed with Intercollegiate Athletics, brings you to around $144 million accounted for and within $6 million of the $150+ million listed in Texas Athletics estimated income for 2018–2019.

I think that we can comfortably assume that Texas Athletics’ income and expenses for the 2019–2020 fiscal year, which spans from September 1st to August 31st according to their Operating budgets. The football season was unencumbered by COVID-19 and the football team went to the Alamo Bowl and achieved success. Basketball played 95% of their season, losing out on the Men’s and Women’s Big 12 and NCAA tournaments. Baseball (the only other “profitable” sport beyond football/men’s basketball), had its season cut short, but only generated around $1.6 million in revenue, making it (mostly) inconsequential for this purpose. Expenses again would likely have remained stable with the athletic department ending up around a net of $0 after conveying their debt money and excess to UT.

Based off of the last few years, Texas Athletics clearly had the excess money for the type of multimillion-dollar investment that Interim President Hartzell talked about; the university would’ve likely kept the approximately $10 million from the athletic department and repurposed it towards these new initiatives.

As of July 13th, I think it’s doubtful that the Athletic Department has that sort of excess within the next few years, not to mention their debt payments. I doubt there is a meaningful number of fans in the DKR Stadium come September and beyond, conservatively wiping out approximately $50 million in revenue, even if capacity returns to normal in the Spring. That could be catastrophic; while UT announced a hiring and raise freeze back in March, there has been no indication of layoffs or firings from the athletic department, leaving them with approximately $40 million in employee salaries + $25 million to coaches, the administrative fees they have (about $30 million in 2018) and the remainder of the construction for the South End Zone project in DKR. All of this is without accounting for a loss of season ticket holders over the long-term or donors who have to pull their money back due to COVID-19.

Without tickets, it’s hard to see Texas Athletics covering all necessary costs (salaries + debt + fees/construction) while still having enough excess profit to invest multiple millions with the University. I don’t project Texas Athletics to approach anywhere near their record-levels of revenue the last few years and I have no idea how they’d have multiple millions to invest without taking on more debt (which I think would be insane considering they still owe about $180 million for old projects).

I’m worried that by putting Texas Athletics on the hook for this investment, the university is side-stepping their responsibility to recruit and support students and that money won’t materialize as Texas Athletics deals with the COVID-19 fallout. The university is responsible for its students, not the athletic department.

With that in mind, the university has an endowment worth a shocking $31 Billion dollars, receiving a payout of $1 billion dollars in 2018. UT-Austin and the UT system has the money available to make a multimillion-dollar investment in Black and inner-city students and should be the ones responsible for that money, not the athletic department, especially as Texas Athletics likely won’t bring in the revenue numbers they’ve gotten used to in the last few years.

Sophomore studying Sport Management and Economics at the University of Texas. Writing about Baseball from an analytical and scouting perspective

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