Editor’s note: This article was originally published by USA TODAY Sports and has been republished in its entirety below.
COVID-19 didn’t completely stop the Texas athletic department, but new figures shed light on how the pandemic had an impact on the Longhorns’ bottom line.
UT athletics still turned an eye-popping $22.1 million profit for the 2019-20 athletic year, according to audited figures. However, the total revenue dropped more than $23 million down to $200.8 million for the fiscal year that ended Aug. 31 — approximately a 10% drop from the 2018-19 athletic year.
Yes, Texas makes a lot of money, but the Horns spend a lot, too. The athletic department spent $178.7 million in expenses for things such as scholarships ($11.8 million), head coaches’ salaries and benefits ($20.5 million) and team travel ($7.5 million).
The audited figures obtained by the American-Statesman through an open records request show the Longhorns took financial hits in men’s and women’s basketball and baseball. All three major sports were cut short once the pandemic took hold in March 2020.
Still, UT athletic director Chris Del Conte guided the financial behemoth well into the black on the strength of $146.8 million in football revenue, department-wide salary cuts, layoffs and belt-tightening across the board.
“It’s been a trying and difficult time for us all, but I’m proud of our entire team’s effort to put us in the best possible position to be successful,” Del Conte told the Statesman.
The annual audit by Austin accounting firm Maxwell, Locke & Ritter lays bare just how important football is to the entire UT operation.
The Longhorns played a full 12-game season in 2019 and won the Alamo Bowl. The school took in $44.1 million in ticket revenue for 2019, almost a $2 million jump the year coming off a Sugar Bowl victory at the end of the 2018 season.
Texas fans made $33.6 million in football donations, and football generated $26.6 million through licensing and sponsorships. Thanks to Longhorn Network’s annual $15 million check, UT took in $20.6 million in media rights, according to the report.
The report also singles out one donor for a $6.5 million cash contribution that accounts for “approximately 13% of all contributions received by the Department.” Texas athletics showed a total of $49,357,250 in donations for the 2019-20 fiscal year.
The UT athletic department is a self-sustaining operation. No public money is used for any aspect of UT athletics.
All in, Texas had $146.8 million in football revenue against $41.8 million in expenses.
That surplus — $104,923,030 to be exact — is what funds the rest of the athletic department. Football, men’s basketball and baseball are typically the only three Longhorns sports that turn a profit.
But the pandemic cut the basketball season short. The Big 12 wound up canceling the men’s and women’s tournaments in Kansas City, Mo., and both NCAA Tournaments also were canceled. That resulted in lost revenue to the conference, which splits the money with its members.
UT men’s basketball finished the 2019-20 athletic year taking in only $13.5 million compared to $16.7 the previous fiscal year. Women’s basketball brought in $2.1 million compared to $2.5 million the year before.
Baseball saw a huge drop. Ticket revenue saw a dramatic drop since the majority of the season was canceled. The Horns took in $451,076 in baseball ticket revenue during the 2020 season. The previous year, that number was $1.5 million.
Overall, the baseball program brought in $6.1 million during the 2019 season. With the pandemic canceling everything, the Horns made only $2.9 million in baseball revenue in 2020.
Softball also saw a similar decline, going from $1.3 million in 2019 down to $935,547 in 2020.
Del Conte waited until Sept. 1, the first day of a new fiscal year, to announce department layoffs and “voluntary” salary reductions. The school announced it was shedding its work force by 17.9% and cutting salaries.
UT announced at the time that 274 athletic department employees would see pay cuts and 11 staffers would be temporarily furloughed with benefits. Another 35 were laid off and 35 more vacant positions would go unfilled. At the time, UT budgeted for 390 athletic department employees. The moves were designed to save $54.3 million overall.
Del Conte hoped that the department’s 26 coaches would agree to temporary salary reductions. However, some balked and demanded no reductions at all. Technically, no coach had to give up pay since the terms were contractually agreed upon.
Del Conte later said the money would be deferred, and those who accepted the temporarily reduction would eventually be made whole.
The athletic department continued an annual contribution back to the school. For the 2019-20 fiscal year, UT athletics sent $5 million to administrators.
The Longhorns still carry a substantial debt load. UT athletics still owes $174.9 million to creditors, and debt service payments are scheduled through 2044. The school used long-term debt to fund the first major expansion of Royal-Memorial Stadium earlier this decade.
Texas has an $8.7 million principal payment and $7.3 in interest due for the 2021-22 fiscal year, according to the report. University of Texas general obligation municipal bonds carry a “AAA” rating, the highest possible.
It’s unclear how these numbers will look going forward considering the pandemic isn’t over yet and the 2020 football season started at the beginning of the current fiscal year.
Football ticket renewals happen in the spring. Some ticket money for the 2020 football season was accounted for in the 2019-20 report. Ticket renewals are now underway for the 2021 season. A drop in ticket revenue may show up on next year’s report.
If donors big or small withdrew their support after “The Eyes of Texas” school song imbroglio, that won’t show up until next year’s report, either.
If the Horns play a full 12-game season with a full Royal-Memorial Stadium, the department should have no problem turning out eye-popping numbers for its 2021-22 fiscal year. The school is expected to bring its new south end zone expansion project online in 2021, too. The new project features more premium seating and stadium club amenities.
The 2020 football season featured only five home games, one less than a normal season usually has. School officials also allowed only 25% capacity and moved season ticket holders from their normal seat locations. Many fans opted to freeze their tickets for one year, or they could have requested a refund.
Texas averaged 17,138 fans in five games during the pandemic. Royal-Memorial Stadium holds just over 100,000 normally, but the construction project temporarily reduced that to the mid-90,000s.
Changing football coaches shouldn’t be a huge financial burden, either. Former UT coach Tom Herman was owed at least $15 million in guaranteed money for the final three years of his contract. Some of Herman’s assistants were owed millions in guaranteed money, too.
New coach Steve Sarkisian is expected to receive a six-year contract worth more than $30 million in guaranteed money. All contracts must be approved by the UT System Board of Regents.
As of Aug. 31, 2020, the UT athletic department had $50.1 million earmarked for the school’s endowment accounts that totaled $4.7 billion, according to the report. That number would have encompassed the S&P 500’s huge market drawdown when the pandemic began and its rapid recovery off the March 2020 lows.
In short, UT athletics managed its way through the pandemic rather well, financially speaking. The Horns just didn’t make as much money as they normally do.
But have no fear, Texas fans. The Longhorns’ streak of generating at least $200 million in annual revenue is now at three years and counting.