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In the big-time football spending war, the rich get richer

Before second-ranked Texas Tech faces fifth-ranked Oklahoma on Saturday in Norman, writers and talking heads will hype the game as the plucky upstart with the funky offense against the bastion of college football tradition. The implied message? Texas Tech is the noble peasant who scrapes his pennies together. Oklahoma is the feudal lord with the castle on the hill and enough gold in his war chest to quell any uprising.

So, it might come as a surprise to learn that, according to information schools are required by the Equity in Athletics Disclosure Act (EADA) to submit to the U.S. Department of Education, Texas Tech outspent Oklahoma by $4.3 million to operate its football program between the 2002-03 and 2006-07 school years. An examination of the football revenues and expenses of the top 20 schools in this week's BCS standings showed that the Red Raiders spent $77,437,091 on football during that span. Oklahoma spent $73,100,833.

Because the EADA numbers do not take into account capital expenditures (stadium renovation, new academic centers, weight rooms, etc.), and because the information is gathered from public and private institutions with wildly varied accounting practices regarding how donations and salaries are counted, the figures do not prove that Texas Tech -- which has risen to football prominence during coach Mike Leach's nine-year tenure -- has closed the gap on Oklahoma, one of a handful of brand-name college football programs. The numbers do, however, suggest that by pouring money into football, Texas Tech's athletic department has helped narrow the distance between itself and some of its more established Big 12 brethren.

Using Texas Tech's example, it seems logical that any school that hopes to eventually build a self-sustaining athletic department that uses no public money would do so by pumping funds into football, a sport that seems to grow into a more powerful revenue generator every year. And that is precisely what some schools are doing, but a leading sports economist believes the practice ultimately will lead to more athletic departments draining dollars from already cash-strapped universities.

"Most schools are chasing the Holy Grail," said Andrew Zimbalist, the Smith College economics professor who in 1999 wrote Unpaid Professionals: Commercialism and Conflict in Big-time College Sports.

Zimbalist estimates that of the hundreds of college athletic departments in America, only about six generate a surplus in a given year. But athletic directors see those big-money departments and believe that if they turn their football program into a juggernaut, they might someday join the ranks of Ohio State, Florida and Texas, which have parlayed football success and prestige into high eight- and low nine-figure revenues. Zimbalist said only a select few departments can sustain such success; the others merely will keep spending donor and taxpayer dollars in an attempt to stay competitive.

In Texas Tech's case, the Red Raiders had little choice but to find funds for football. When the Big 12 merged former members of the Southwest Conference and Big 8 in 1996, the Red Raiders found themselves swimming in a deep ocean with some big fish. Texas, Texas A&M, Oklahoma and Nebraska brought in massive revenues, and to compete with those schools, Texas Tech would have to spend.

"It wasn't overnight that, all of a sudden, we had an outstanding football team," Texas Tech athletic director Gerald Myers said. "We've been working on this for years."

According to the EADA figures, Texas Tech's football spending jumped from $7.3 million in 2002-03 to $15.3 million in 2003-04. In the meantime, to keep up with the Joneses, Texas Tech also had to keep up Jones. That's Jones stadium, now named Jones AT&T Stadium after a $20 million donation in 2000 from SBC Communications to kick off a three-phase renovation of the Red Raiders' home field. The first phase, completed in 2003, added a new press box and club suites at a cost of $51.9 million. The second phase, completed before the 2006 season, included the installation of a new FieldTurf playing surface. The third phase, which includes more lucrative club seats, was postponed, but after raising almost $25 million for the project this year, Texas Tech should be able to begin construction when the season concludes.

Myers said the department never could have committed so much money to football without the support of university administrators. He also said Texas Tech's admission to the Big 12 left the department little choice but to ramp up spending. The league -- which distributes television and bowl revenue to all teams -- expects teams to stay competitive. But Myers, in spite of an operating budget that, according to Myers' bio on the Texas Tech athletics Web site, rose from $9 million in 1996 to $42 million in 2006, and in spite of the EADA numbers, said Texas Tech is not yet playing on a level field with Oklahoma or Texas. "The problem with the EADA numbers," he said, "is I don't think it's always apples to apples."

Myers is correct. While Texas Tech reported total revenues of $53.6 million in 2006-07, Oklahoma made $69.4 million, including $37.4 million on football alone. That allows Oklahoma to offer more competitive salaries for coaches, tutors and athletic department administrators. Economist Rod Fort said a good gauge of a program's place in the college football financial world is how much it pays its head coach. Thanks to a $3 million one-time bonus he's scheduled to receive, Oklahoma's Bob Stoops is on pace to make about $6 million this year. Leach is scheduled to make $1.75 million.

Those revenues also allow the Sooners to quickly raise money for amenities that help football recruiting. They also help Oklahoma pay for other sports. Over a five-year period, Oklahoma spent an average of 43.5 percent of football revenue on football. Texas Tech plowed 90 percent of football revenue back into the football program in the same period. By comparison, top-ranked Alabama used 37.6 percent of its revenue ($39.9 million a year), and third-ranked Texas used 28.2 percent of a revenue stream that brought in an average of $53.2 million a year.

Of course, Texas Tech did not run a deficit. During the same five-year period, Ball State spent 324 percent of its football revenues on football. In its sixth season under coach Brady Hoke, Ball State will put its 10-0 record on the line Wednesday against Central Michigan in a game televised on ESPN2. The school, previously best known for alumnus David Letterman, has given Hoke what he has needed to make the football program competitive for a MAC title, including a privately funded $13 million stadium renovation completed last year. Unfortunately for Ball State, a public school financed by Indiana taxpayers, the football program ran a deficit from 2002-06. In 2006-07, the program made $1.6 million and spent $4.6 million. Despite the devotion of resources to the program, Ball State hasn't seen the leap in revenue Texas Tech has enjoyed.

This type of spending concerns economists, who point out that the very nature of the game dictates that not every program can play its way to a windfall. "It's a zero-sum game," said Brad Humphreys, a professor at the University of Alberta who has done extensive research on the economics of U.S. college sports. "Wins from one program become losses for another program in the conference."

Eventually, Utah athletic director Chris Hill said, departments will have to take a realistic view of what their program should be. Utah is unique because it was the first program from a non-BCS conference to play in a BCS bowl game. The Utes went 12-0 in 2004, beating Pittsburgh in a Fiesta Bowl appearance that was a boon to the program and to the Mountain West Conference. Utah can cash in again this weekend; a win against rival BYU likely would clinch another BCS berth for the Utes, who would pocket $4.5 million for the department.

That rise may have had as much to do with timing as it did the hiring of coaches Urban Meyer (2002) and Kyle Whittingham (2004). Hill explained that Utah raised the money for 10-year-old Rice-Eccles Stadium and for the Utes' training facility in the go-go late '90s, when construction costs were relatively low and when a booming economy made donors more generous. To build Rice-Eccles now, Hill said, would cost at least twice as much. And good luck raising the money or securing financing.

Hill said schools invest in football for "financial reasons, public relations reasons and community building reasons," but he said schools will have to spend prudently. He said that while the money and prestige from the BCS appearance has allowed Utah to put some distance between its football revenues and expenses, "It doesn't change who you are." Though Hill did not address the issue, it would seem that if a wealthy program threw a $3 million annual contract at Whittingham, matching the offer would prove difficult.

Hill believes that, eventually, presidents at schools outside the football elite will have to take a closer look at football spending and choose whether they want their department to keep pouring money into the dream of football prosperity. "We're going to live within our means [at Utah]," Hill said. "Presidents are going to get involved and decide what level of competition they want."

At Texas Tech, the Red Raiders are spending and playing their way to the highest level of competition. Will that last? It's impossible to tell, but one thing is certain: rivals Texas and Oklahoma won't stop spending. Myers has said the school will renegotiate Leach's contract at season's end, but keeping him certainly will require a bidding war. Meanwhile, other schools will try to follow Texas Tech's example, but their odds of success remain low. More than likely, many will keep spending with little to show in return.

"You're not really gaining an advantage over your competitors," Humphreys said. "You're just doing all that spending to keep up."

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