The money machine

The University Athletic Association has built a perennial winner both on and off the field.

Image of Florida Field during the Troy game

When it comes to sports, the University of Florida isn’t just a success on the fields and courts; it’s a winner financially as well.

While 70 to 90 percent of other Division I schools lose money on intercollegiate athletics, according to the NCAA, UF’s University Athletic Association is a perennial money-maker. It turned a profit of $7.2 million on $105,805,436 in revenues in its most recent fiscal year. And its football program alone was the fifth most profitable in the nation.

What’s the secret to its success?

Teams that win.
Smart hiring.
Loyal boosters and lucrative contracts.
Shrewd management.

Programs that Are Second to None

According to the UAA mission statement, UF is committed to be second to none in intercollegiate athletics. Year after year, it has lived up to that goal.

In the last 18 years, UF teams have won 15 national titles and finished in the Top Ten 196 times, including 14 Top Ten finishes in 2009-2010, a school record.
During that period, five Gator teams ranked in the top five nationwide for attendance and Florida teams attracted 1.1 million fans in total last year alone.

Overall, the Florida athletics program is so successful that it has ranked among the Top Ten in all-sports standings (meaning rankings of all its teams) every year since the 1983-84 season. Florida’s program is the only one nationwide to earn that achievement and it has ranked among the top five for 14 of the last 21 years, according to national all-sport rankings.

Of course, leading the way on the field and in cash contribution is Gator football. In fact, its success is essential to the financial wellbeing of the entire program. “Football has to make money or we can’t run the athletics program,” says UF Athletics Director Jeremy Foley. “The only sports that make money around here are football and men’s basketball, but football generates a huge part of our budget, $65 million to $66 million. Between ticket sales, booster contributions, television revenues, concessions and gift shop and on and on, it takes all that.”

That doesn’t mean UF needs to have an undefeated football team every year to be profitable. But, Foley says, “if we don’t have a product that people want to come see, that will fill up our stands, we can’t support our other sports. That’s always the way it’s been and it’s not unique to Florida.”
To ensure that the football team—indeed all the Gator teams—are successful, one of Foley’s primary missions is choosing the right coaches to lead UF teams.

When seeking a head coach, Foley has said he looks for people who have integrity, character and commitment to NCAA rules. He also likes to hire people who have a strong work ethic and who have been accomplished in their playing careers, such as Billy Donovan, who played in the Final Four as a guard with Providence College, and Rhonda Faehn, a world-class gymnast who won a national title in the vault. Although Foley has shown a deep loyalty to successful coaching hires, he can also remove unsuccessful coaches—Ron Zook, Carolyn Peck, Andy Lopez—quickly when it appears that a change is in the best interest of the program.

The Corporate Leader

A good part of the credit for this financial dynasty is attributable to Foley.
He began at UF in 1976 as a ticket-office intern with a love of sports. Over the following years, he worked his way through most parts of the operation until 1992m when university president John Lombardi hired him to be athletic director.

It’s more than just familiarity with the program that has led him to success. He also runs the UAA as a corporate CEO would. “People don’t like to talk about college athletics being big business,” Foley says, “but it is. Our focus is developing young men and women and helping them get their degrees, as well as athletic success. The fact of the matter, though, is it’s a $100-million business so we’re going to run it like a business.”

When Foley became athletic director in 1992, he says the association was in trouble. “We had severe financial difficulties. Our football program was emerging from probation and played in an outdated stadium. We were in the red and had to borrow money to make payroll,” he says. “Those were difficult times.”

Turning that around took hard work by Foley and his team, and ultimately success on the football field. As teams coached by Steve Spurrier became more competitive, fan support and television revenues began to increase in the 1990s. In addition, the basketball program moved from its former home in the 5,000-seat Alligator Alley to the 12,000-seat O’Connell Center. Finally, a 12th football game was added, which UAA estimated to be worth $1.5 million to $2 million in additional revenue.

While the UAA is financially successful today, Foley says he still operates with an eye on the bottom line.
UAA salaries however are among the areas where Foley apparently will flex, especially to reward star coaches. The 2006-07 UAA budget for salaries, OPS (other personnel services) and fringe benefits was $22,693,414.

A two-year-old report also noted that Foley himself is well compensated for the UAA’s success. He was listed as the highest-paid athletic director among public schools in NCAA Division I, with a $965,000 guaranteed salary.

But the UAA’s investments go into more than salaries. Foley has spearheaded numerous capital improvements, including expansions to the football stadium, a multipurpose athletic field house and new facilities for tennis, track and field, lacrosse, soccer, baseball, golf, softball and swimming. “If you’re going to be a quality athletic program and take care of this great institution, you have to run it the right way,” Foley says.

The Keys to Success

How does Foley account for his remarkable success? It’s partly the result of having a good mentor who pushed him to learn all aspects of the business.

“In 1981 when I was running the ticket office and other stuff, athletics director Bill Carr came into my office and said, ‘I want to put you in charge of the business office’ and I said ‘You don’t want to do that, okay. I don’t have a business background, an accounting degree or anything,’ but he insisted.”

That helped Foley develop a keen sense of how to operate a major business. He says he stresses the importance of understanding business when speaking to young people who are interested in college athletics management. “I say, ‘You better understand how a business operates.’ Back in ’81 our budget was $8 or $9 million, so I learned on the job, but it would be hard to understand a $100-million budget if you didn’t have a business background and education.”

The other essential element in the UAA’s success is a highly-qualified staff. “It’s not rocket science when I say this, but you have no chance if you don’t have good people,” Foley says. “They determine the fate of your program and business. I count my blessings that I work with people like ours. When they come to work they put aside personal agendas and anything other than making this a great and successful program.
“I’m blessed to have a professional staff that is extremely competent, the best in the country.”

An example of that extreme competence is Greg McGarity, Florida’s former associate athletic director who was quickly snapped up by the University of Georgia last summer when it had an opening. Other former UAA employees who have gone on to significant jobs include Jim Weaver (AD at Virginia Tech), Richard Giannini (AD at Southern Miss), Keith Tribble (AD at UCF), Eric Poms (CEO of the Orange Bowl), and Jon McBride (AD at Nebraska Kearney).

A Living Stream of Cash

Those who criticize college athletics tend to do so because it is a business, but it is a business that provides scholarships to hundreds of young people a year and jobs for 320 full-time employees and 546 part-timers.

About one-third of the money required to operate the UAA and its athletic programs, including scholarships and capital improvements, comes from the more than 13,000 members of Gator Boosters, Inc. For the last fiscal year that group contributed $35,894,230. That includes the efforts of 600 Bull Gators—patrons who give $12,000 or more annually.

The UAA also benefits from annual ticket sales, with football ($17.5 million) and basketball ($2 million) making up the bulk. Then there’s the revenue from lucrative contracts. For 2010-2011, the UAA expects to earn $15 million from its share of bowl games in which Southeastern Conference teams play, as well as proceeds from a multimillion-dollar television contract, and championships. Another $1.5 million annually comes from apparel and equipment companies that pay the Gators to wear their gear. And the UAA generates another $4.8 million annually by licensing its logo and name to companies that produce everything from T-shirts and posters to video gaming chairs and fleece coats for dogs.

Continuing the Tradition

Looking to the future, Foley and the UAA are optimistic about continued success, but they also say Florida and the UAA must stay focused on the basics, starting with keeping the fans coming back—no small task these days.

“If there is a cloud on the horizon, it’s the economy,” Foley says. “We’re blessed with a loyal fan base, and they’ve supported us as well as any program in the country, but it doesn’t take very many people to say, ‘I can’t do this any more,’ for very legitimate reasons, to cause ticket sales and contributions to decline and have a very significant impact on our program. “That’s not a black cloud, but an area worth watching.”

To make sure the fans keep supporting the Gators, Foley says it essential to treat them well and provide a good product. “Customer service is huge and we can never take our fans for granted,” he says.

How UF Sports Help Gainesville

As well as providing revenue for the university and almost year-round sports entertainment, University of Florida intercollegiate athletic programs are important to the local economy.

“It’s amazing how important the UAA is,” says Roland Loog, director of the Alachua County Visitors and Convention Bureau. “We estimate about $6 million in direct expenditures when there is a home SEC football game. Motels and hotels rely on football season to make up for soft summers.”

Loog noted that “for football, UAA profit margins are pretty big, but other sports impact the economy positively too…basketball…but even moreso gymnastics because young women from all over the state come to watch. The impact is year-round and even the Orange & Blue Game, which often coincides with the Spring Arts Festival, is really important economically.”

A 2005-06 economic-impact study* by UF’s Alan Hodges, David Mulkey and Tom Stevens estimated total visitors to campus facilities and academic events at 3.5 million, plus another million visitors for athletic events.
The UF study suggested that these campus visitors had major impacts on the economy. Spending on campus attractions and academic events totaled $73.63 million, on football games $32.66 million and on all other athletic events $5.5 million.

UF sports also have non-monetary benefits for the city. “Success of University of Florida athletic teams puts Gainesville on the map,” says Chamber of Commerce President and CEO Brent Christensen.

Here’s an example: Each year, Gainesville and the Chamber partner with Marion County and the Heart of Florida coalition to host business consultants for a weekend. It is an opportunity to showcase area assets to influential economic development individuals. When the groups pick the date of the visit, “Usually we bring them on a football weekend,” says Christensen. Why? “Because such a great spectacle helps sell them on what our communities have to offer,” he says.

So when the next major high tech firm or venture capitalist or corporate headquarters decides to move to town, it may just be a Gator victory that swayed them.

* A revised study is underway now. Results will be available in late spring.

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