[h=1]How Texas Tech, Houston show the financial gap between haves, have-nots could be getting wider[/h] [h=2]This Story is About...[/h]
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Brad Tollefson/AP
Texas Tech fans yell as Kansas' David McCormack shoots a free throw during the second half of an NCAA college basketball game Saturday, Feb. 23, 2019, in Lubbock, Texas. (AP Photo/Brad Tollefson)By
Ben Baby, Staff Writer Contact Ben Babyon Twitter:
@Ben_Baby
One of Texas Tech's most significant athletics accomplishments in January didn't happen on the court or on a field.
It happened on a spreadsheet. When Tech athletics submitted its annual financial filing to the NCAA, it reported a drop of $2.5 million in university funding it received. And in the process, the percentage of university dollars Tech used on athletics dwindled closer to zero.
That wasn't the case across the state. According to financial reports obtained through open records requests, the financial gap widened between in-state public athletic departments during the 2017-18 school year.
While the state's three public schools in "power five" conferences -- Tech, Texas and Texas A&M -- are mostly self-sufficient, more than half of the operating revenue for the five public "group of five" schools comes from university funding.
Of Tech's $89.3 million in reported revenue, only $3.3 million -- 3.74 percent -- came from student fees and institutional support. And the decreased subsidy wasn't by accident.
"We did make a concerted effort going into (2017-18) and we wanted to be able to state that exact fact, that we stand on our own two feet in that regard," said Jonathan Botros, Tech's athletic chief financial officer.
A&M and Texas each reported more than $210 million in operating revenue. Neither school receives university money for the athletic department. In 2016-17, they were two of the 14 schools in USA Today's NCAA financial survey that took no subsidy money.
According to Tech athletic director Kirby Hocutt, the reason Tech went from being 6.53 percent subsidized the previous year to what it reported in January largely stems from the success of its men's basketball program.
In Chris Beard's second season in Lubbock, the Red Raiders reached the Elite Eight of the NCAA tournament for the first time in school history. In addition to Tech's baseball success, the athletic department has surpassed its budgeted ticket revenue, Hocutt said.
And the financial success comes during a period when the football program struggled to the point that coach Kliff Kingsbury was fired at the end of the 2018 season.
"With the same level of success in football that our other athletic programs are achieving, there's limitless opportunity for us to grow our revenue side in football as well," Hocutt said.
Houston is at the other end of the spectrum. After Tom Herman left his post as the Cougars' football coach to take the same job at Texas, the team lost 11 of its next 26 games.
That made a significant impact on the athletic department's finances.
In 2017-18, Houston reported a $5.8 million drop in football revenue, according to its NCAA filing. In contrast, the Cougars saw a $4.8 million increase in money the university gave to athletics through direct transfers, bringing the total to $22.4 million.
That money, combined with $8.8 million from student fees, makes up 56.5 percent of Houston's total revenue, which put it with the rest of the state's "group of five" schools that were mostly subsidized. Houston athletic director Chris Pezman declined to comment for this story.
The financial shifts at Houston and Tech underscored the gap between the state's public Football Bowl Subdivision schools. The "power five" schools receive less than four percent of their revenue from fees, while the "group of five" programs are subsidized between 56 and 71 percent.
Jordan Robert Bass, a professor and director of the sport management program at the University of Kansas, said athletic departments in that tier typically lack the revenue from donations, ticket sales and other key areas that "power five" universities enjoy. That places great importance on money from students, especially at a time when athletic spending is increasing across the country.
"For these 'group of five' schools, if they stopped relying on them, that would be a big, big loss for them," Bass said. "They don't really have a choice if they want to keep trying to compete."
Tech recently raised its student athletic fee up to $59.20, Botros said, the first increase in seven years. He said the money will go directly to improving the in-game experience.
It will also cover the admission cost to every Tech sporting event, which a recent survey showed can cost between $850 and $1,300. Tech received just over $13,500 in direct institutional support to pay salaries for a student work program.
More and more schools could be battling to find ways to be self-sufficient in the future. Bass said in the last decade, student bodies across the country are voting against increases in student fees in greater frequency, even though they wouldn't go into effect after many who voted graduated.
"I think you're seeing a bigger awareness from college students of the student fees that they're paying to athletics," Bass said.
Hocutt said one of his primary goals over the next few years is increasing revenue without relying on money outside of the athletic department. Tech recently broke ground on a $29.5 million basketball practice facility and a standalone sports nutrition center. Both projects will be fully funded by athletics.
But even though the Red Raiders are in an improved financial situation, they still have their share of unique challenges Hocutt embraces.
"We don't have the same the budget Texas and Texas A&M do," Hocutt said. "But at the same time, we have the expectations that we're going to line up across the line from them in competition and win. And there's a sense of pride that comes from that with Red Raiders across the country." [h=2]Unequal funding[/h]
The financial gap between the state's three public "power five" schools and five "group of five" schools widened in 2017-18. A look at the funding levels: