Texas revenue dropped $48.1 million during pandemic-impacted 2020-21 athletic year

Like everyone else, Texas athletics took a massive financial hit because of the pandemic.

Only now can one grasp the problems facing Texas athletic director Chris Del Conte as he patched gaping financial holes in the battleship.

The Longhorns’ total revenue was down about $48.1 million — roughly one-fourth from the previous year — during the 2020-21 athletic year, according to audited figures obtained by the Austin American-Statesman. Expenses were down, too, but the UT athletic department swung to a $14.6 million loss for the year after a long stretch of finishing in the black.

Even now, Del Conte admits there were some tense moments as UT officials examined scrambled financial models, unsure how the pandemic would play out. The school dipped into its reserves to cover the loss, Del Conte said, and still gave the university $6.8 million.

For years, Texas officials have taken immense pride in the following sentence that’s included in every story about the Longhorns’ finances. UT athletics is totally self-sustaining; no public money is used to fund any aspect of the athletic department. That is still true after COVID-19.

“A lot of people made a lot of sacrifices, and the pandemic was hard on everybody,” Del Conte said in an interview. “But you’re finally seeing the gravity of what we were dealing with. I’m really proud of our team, really proud of everyone in our athletic department for understating the crisis we were dealing with.”

Nowadays, UT athletics generates more than $200 million in total revenue through ticket sales, donations, merchandising and television contracts. That revenue is used to fund the entire athletic operation.

As the pandemic continued, UT’s total revenue dropped to $152.7 million overall for the 2020-21 athletic year, according to the annual audit performed by the Austin-based accounting firm Maxwell Locke & Ritter. It’s the first time Texas has fallen below the $200-million revenue threshold since the 2016-17 athletic year.

Football is the financial engine across the college athletics landscape. When football is hurting, everybody in the department hurts. The same was true for the Longhorns.

Texas football generated $146.8 million in football revenue for the 2019-20 athletic year when the pandemic was beginning. The 2020 football season was reduced to nine regular-season games and the Alamo Bowl. Overall, UT football revenue was knocked down to $98.2 million for the 2020-21 athletic year.

A massive portion was lost in ticket sales as the school faced drastic attendance measures in line with pandemic protocols. The school took in $44.1 million in football ticket revenue in 2019. In 2020, that number fell off a cliff — down to $8.8 million.

Initially, UT officials were making plans for a 50% stadium capacity for the 2020 season. The school eventually had a 25% stadium capacity at Royal-Memorial Stadium, which holds 100,119.

Donations, which are tied to priority seating, were down, too. The football program had $33.6 million in donations for 2019. That number slipped to $29.9 million the following year. As if the pandemic wasn’t bad enough, Texas officials had to deal with angry ticket holders who were unable to write off the donation portion of their football tickets because of tax law changes.

In 2019, the Texas football program generated a financial surplus of $105 million. In 2020, that surplus was just $54.5 million.

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Boosters covered the costs associated with changing football coaches. The school was required to pay the balance of Tom Herman’s contract worth $15.4 million in guaranteed money. New coach Steve Sarkisian received a six-year deal worth $34.2 million when he was hired on Jan. 2, 2021. Sarkisian’s salary comes from regular budgeting procedures.

But Del Conte showed some frugality, too. Instead of rushing to pull the trigger, Del Conte waited until after April 1, 2021, to hire men’s basketball coach Chris Beard away from Texas Tech. By waiting until April 1, Beard’s buyout dropped by $1 million. So instead of paying Tech $5 million, Texas owed only $4 million.

The Horns tightened their belts wherever they could. NCAA sports were effectively shut down from March to August 2020 because of the pandemic. The school was able to save about $19 million without paying for travel and game costs, according to internal estimates.

Still, Del Conte announced on Sept. 1, 2020, the first day of a new fiscal year, that he was laying off 17.9% of the UT athletics work force. He also asked 26 coaches to take temporary salary reductions. Although some initially refused, all UT coaches were paid back the money that was temporarily withheld.

At UT, football, men’s basketball and baseball are typically the only sports that turn profits. Men’s basketball operated at a $7.1 million loss and baseball lost $557,590. Ticket revenue was down across the board.

But the athletic department kept its word with academics. The annual transfer to the institution, listed at $6.8 million, was made per usual. Texas is one of the few schools nationwide that transfers money back to academics. From a cash flow perspective, the money comes from UT’s contract with Longhorn Network.

Athletics still carries incredible debt payments associated with Royal-Memorial Stadium’s expansion in the early 2000s. The department still owes $167.9 million in principal with a $7.265 million debt service payment due in 2022.

As of last August 31, UT athletics held cash and securities worth an estimated $65.5 million for scholarship endowments.

It’s expected the Longhorns will bounce back when the 2021-22 audited report comes out next January. The school had a full 12-game football season in 2021, albeit not as successful as fans hoped. The sports calendar was full. Business appears back to almost normal.

“And now,” Del Conte said, “we’re in a position to move forward stronger than ever.”

Contact Brian Davis by phone or text at 512-445-3957. Email bdavis@statesman.com or @BDavisAAS.

This article originally appeared on Hookem: Texas athletics 2020-21 finances impacted greatly by COVID-19 pandemic