Cost cuttings signal troubled future for Texas

By John Hillman  |   Sunday, June 28, 2009  |  Comments( 5 )

Texas Longhorns
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At the University of Texas, free soft drinks for employees have disappeared. Printers often sit silently, and thermostats register temperatures on the fringe of the comfort zone.

However, these cost-cutting measures signal just the tip of the iceberg. Although Longhorn athletic officials won’t admit it, Orangeblood fan support may have reached its apex.

It’s difficult to believe Texas suffers from a financial crunch. The Horns topped in the nation in athletic revenue during the 2007-08 academic year, totaling just over $120 million. Ohio State finished second at $118 million, and Florida came in third with $106 million.

But frugality remains the watchword on the 40 Acres. Athletic director DeLoss Dodds now urges his employees to park in the outlying airport lots and shop around for the best deals on hotels and rental cars.

Starting this fall, media guides have been eliminated for all sports except football, and that publication will cease for all Big XII schools in another year. Dodds has already warned all UT coaches to expect fewer charter flights, a greater reliance on commercial air transportation, more bus trips, and a preference toward playing teams from nearby locales.

These guidelines will probably generate over $1 million in savings for the Longhorn athletic budget. But that amount can’t begin to offset a decrease in revenue.

Last season, the Horns averaged over 98,000 fans for seven home contests. But even the prospect of a national championship run won’t guarantee those numbers hold in 2009.

Texas plays an extremely weak nonconference slate next year, hosting Louisiana-Monroe, Wyoming, UTEP, and Central Florida. That lineup doesn’t thrill Orange and White fans who must pay almost $100 per ticket for a seat at DKR Memorial Stadium. If attendance drops by only 5,000 per game, the Longhorns will suffer a $3.5 million decrease in football revenue next season.

An excellent team combined with a winning tradition certainly solves many of the financial the problems. However, the golden age of college football appears to have ended. Dodds can no longer expect unlimited funding from the Longhorn Foundation and UT football fans.

In the future, top athletic directors will not be judged on their ability to hire and retain quality coaches. Rather, their primary responsibility will be to produce on the bottom line.
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About John Hillman

John Hillman graduated from Baylor University in 1974 with a BBA in accounting and earned an MBA from Baylor in 1987. He worked for accounting firms until 1982 when he became the chief financial officer for an independent insurance claims adjusting service, a position he still holds today. ...
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