Big Football, Small Finances
University of South Florida is among the smallest spenders on football. Yet the Bulls are among the top-ranked teams this season. Brett Huebner, South Florida's financial chief for athletics, talks about playing with a small budget.
By JOE MANTONE
October 19, 2007
University of South Florida's football team is sitting just behind top-ranked Ohio State University -- but the two schools aren't close when it comes to athletic-department spending.
South Florida spent $24.3 million on athletics for the 2005-06 season, while Ohio State spent $101.8 million (see a related chart). The main reason for the discrepancy is that Ohio State funds more sports, such as ice hockey, synchronized swimming and rifle, and more athletes: 896 vs. 427 at South Florida (see related article). But even within football, OSU is a big spender, shelling out more than $60 million on its team, compared with just $6.7 million at South Florida.
Still, South Florida has been able to compete with major college football programs like Ohio State this season. (Thursday night, South Florida lost to Rutgers, 30-27, and will fall in the polls.) Brett Huebner, South Florida's athletics chief financial officer, talked with The Wall Street Journal about South Florida's budget and what it's like competing with the big spenders.
WSJ.com: Does South Florida's small athletic budget put its teams at a disadvantage?
Mr. Huebner: Certainly, having additional resources gives you flexibility and the opportunity to do some more things. But I think it's impressive what (football) coach Jim Leavitt has been able to achieve here. We came from humble beginnings and we are very conscious of our spending and resources. And we are achieving sustainable growth. We are relatively young. Ohio State has been at this a lot longer than we have. But we are bridging that gap on these other schools. But a $100 million budget, we have a ways to go.
WSJ.com: Do you feel pressure to increase spending on athletics?
Mr. Huebner: We have no other choice but to balance our budget as we have consistently done. So obviously we have fiscal responsibility. We remain very disciplined in our habits. We know we're growing our budget to compete with some of these schools at a higher financial level. We are able to put on the field very strong student-athletes and obviously we've identified very good coaches.
WSJ.com: What's included under South Florida's operating expenses?
Mr. Huebner: You have team travel -- particularly to away games. You have equipment costs and then you have game-related expenses. For us that's primarily game officials. Our biggest line item is team travel. Of the $1.6 million (for football operating expenses), team travel was $1.1 million.
WSJ.com: Do the teams fly commercial?
Mr. Huebner: We determine on a case-by-case basis. For example, if the student-athletes need to get back early the next morning for class after an away event, we're more likely to book a charter flight. But we do a mix of both charter and commercial.
WSJ.com: Obviously, the football team needs to charter.
Mr. Huebner: Yes the football team charters. For other sports, primarily basketball, it's a case-by-case basis.
WSJ.com: How much revenue does South Florida generate by going to a bowl game?
Mr. Huebner: We don't see the bowl game necessarily as a revenue source. Generally a bowl game is often a break-even proposition. The bowl game does bring in revenue, but has often equal or offsetting expenditures. We hope to budget conservatively so that we see a net profit but we don't necessarily see it as a revenue-generating event. You do receive a check from the conference to help budget bowl expenses and the school has not subsidized either of our bowl game trips. USF has been able to balance its bowl game budget for each of its two bowl games. Any profit that USF has recognized related to a bowl game has been minimal and not material to its overall operation.
WSJ.com: But there has to be some marketing and down-the-road benefits.
Mr. Huebner: There's probably a ripple effect with going to a bowl game. It increases your support, your visibility. It attracts awareness with alumni and students. So due to going to a bowl game there may be more revenue opportunities.
WSJ.com: Have you seen more of those revenue opportunities this year?
Mr. Huebner: I would say our prospects look good. We're only halfway through the football season -- certainly anything could happen at this point. We're very fortunate to be in the position we're in right now. Being a member of the Big East conference has put us in a position to achieve this level of success. For this current year we haven't been able to make a final determination, but I'd expect to see increases in ticket sales, licensing, TV appearances, merchandise, and probably have an effect on donations. It also increases the value of our corporate sponsorships.
WSJ.com: So the more times ESPN selects South Florida football games, the more revenue the program sees?
Mr. Huebner: Generally, yes. If we are selected there's different tiers based on the scheduling. Whether it's on ESPN or ESPN2 or ABC, there's a different arrangement. But generally yes, if were selected for national appearance there would be incremental revenue to USF.
WSJ.com: Do you think the success of the program leads to more donations?
Mr. Huebner: I don't know if that could be statistically proven but being a young university -- we're only 50 years in existence with a football program that is just over 10 years -- I think we're beginning to scratch the surface. And I think having the success we've had has attracted interest from the community. We've really appreciated the support from the Tampa Bay community.
WSJ.com: How much does the rental of Raymond James Stadium account for in expenses?
Mr. Huebner: USF pays a license fee of $105,000 per game for the 2007 season. We typically have $25,000 per game in additional game expenses associated with the facility. I also estimate that we will pay the Tampa Sports Authority a total ticket surcharge payment of $300,000 for this current season. Altogether, that would equate to $780,000 in facility rent expenses and $300,000 in surcharges.
WSJ.com: South Florida joined the Big East in 2005. Why?
Mr. Huebner: It was part of the vision of our president. Part of the university fabric is having a recognizable athletic program. By going to the Big East, that's showing the commitment to perform at the highest level.
WSJ.com: What's been the cost impact of joining the conference?
Mr. Huebner: That's a difficult figure to determine. With whatever increases we've had in costs in the last few years, we've been able to generate on the revenue side. While our budget is growing, we make a conscious effort to make sure to spend our resources wisely and effectively. We want to have sustainable growth. And if costs are being raised because of our commitment to the Big East we're certainly being diligent in identifying new revenue streams.
WSJ.com: In your mind, does USF have the best football program in Florida history?
Mr. Huebner: Some of those (other Florida schools) have very impressive histories, but we're closing that gap.
Source:
http://online.wsj.com/article/SB119265021917962321.html?mod=Sports
