Moving the chains, dollar by dollar
Competing with SEC's financial muscle as big a challenge as winning on the field
TALLAHASSEE, Fla. -- The sun baked the practice fields as Florida State opened its fall camp this week, but the first stretches and drills endured by players came in the relative comfort of the school's new $15 million indoor practice facility.
There are few bells and whistles, really. It's a football field housed within a giant warehouse, a practical escape from the oppressive August heat and regular afternoon thunderstorms, an investment in maintaining routine. But more than that, head coach Jimbo Fisher said, it's a symbol of the school's commitment to athletics, dollars spent to show future recruits that Florida State is a place where money is no object and winning has no price tag.
On the other side of the country, just as Florida State's players dug their cleats into the artificial turf for the first time, Oregon celebrated the opening of a new football operations building of its own. The complex cost $68 million, funded largely by Nike founder Phil Knight, and it features everything from a nearly 300-foot wall of televisions to a weight room furnished with Brazilian hardwood floors. The opulence of the building gained national headlines, but it's simply the latest in an escalating bid by top-tier football programs with deep-pocketed boosters to gain an edge on the field by outspending the competition off of it.
"It's an arms race," said Stan Wilcox, who was introduced as Florida State's new athletic director Wednesday. "That's the reality of college athletics … and we can't allow other universities to continue to have an upper hand on us."
That's the mandate as Wilcox begins his term as the leader of the school's athletic department, and it's a massive undertaking. The financial landscape has changed dramatically even since Florida State last hired an AD in 2008, and while Oregon's gleaming new facilities may not thwart Fisher's recruiting pitch, immense challenges from SEC schools in the region mean the budgetary arms race will only intensify.
It's an arms race. That's the reality of college athletics … and we can't allow other universities to continue to have an upper hand on us.
--Florida State athletic director Stan Wilcox
Among ACC teams, Florida State is the frontrunner in the race for dollars -- at least among public universities subject to open records laws -- outpacing North Carolina by $18 million in revenue in 2012, according to financial documents. But even as it resides near the top of the food chain among big-budget public universities, Florida State still faces immense pressure to keep pace in an evolving -- and increasingly costly -- financial landscape that threatens to overwhelm smaller programs.
According to documents obtained through open records requests, the FSU athletic department, boosters and development fund generated more than $100 million in revenue last year and put nearly $90 million toward expenses. The athletics department alone shelled out nearly $60 million in operating costs, with more than 20 percent of that going toward football. Those numbers are projected to increase in 2013.
But when it comes to attracting top recruits, hiring coaches and support staff, bringing fans to the stadium and attracting TV viewers, top SEC schools still have a financial advantage -- and it's not simply about conference payouts.
Both Alabama and Florida spent more than $110 million on athletics in 2012, according to documents provided by the schools, while their take from SEC and NCAA distributions amounted to only about $6 million more than Florida State's payout as an ACC member (about $17 million).
Meanwhile, Florida earned nearly $18 million last year in royalties and sponsorships. Georgia takes in more than $10 million annually in multimedia rights deals. Alabama's football program generated more than $30 million in ticket sales alone on its way to a second straight national title in 2012. Top programs aren't simply relying on TV and conference dollars but are finding new streams of revenue that are then invested back into the program.
"You have to be vigilant about looking at not only your current streams of revenue, but your future streams of revenue," Wilcox said.
There's no direct correlation between spending and wins -- Tennessee and Auburn, a combined 8-16 last season, both outspent FSU, too -- but when those additional resources are allocated wisely, there are distinct advantages.
"The investment [SEC teams] make in what they do, it's paid off. The proof's in the pudding," Fisher said. "Not just in coaches salaries, but all phases of your program. It's critical. And fundraising and booster contributions is the key to all of that."
Fundraising might be paramount, but it's a symbiotic relationship between donors and the teams they fund. Top-notch facilities and winning programs generate demand, but ticket sales are the starting point for revenue streams needed to fund stadium upgrades and athletic budgets.
At Florida State, finding money for major capital projects is an immediate concern. The basketball arena needs massive upgrades, and a recent budget proposal pegged costs as high as $100 million. Plans to refurbish areas of Doak Campbell Stadium with more fan-friendly amenities have been widely discussed as well, with FSU joining a host of other programs in a battle to pry fans away from their televisions and into their arenas.
"With the modernization of everything digital, trying to get the fans into the stadium when they can have at home, a refrigerator, big-screen TVs, big, wide chairs," Wilcox said. "We have to get those individuals off those comfy chairs and into our stadium, so we have to create a fan experience that's second to none within our stadium."
That's a potentially tall order at Florida State.
The program has among the most displaced fan bases in the nation, making travel an expensive proposition for fans. Meanwhile, facilities are in need of upgrades in order to offset the allure of those comfortable living room viewing environments. Add in several seasons of lackluster schedules, and it becomes difficult for Florida State to create the demand for tickets that drives fundraising at SEC schools like Alabama, Florida and Georgia -- all of which noticeably outpaced FSU in football ticket revenue last season.
"When you have a full stadium, you have a demand for seats, and it has a very positive influence on contributions," said Jerry Kutz, director of communications for Seminole Boosters. "Programs where they can be thought leaders in how to fill a stadium and how to schedule to where it's an attractive schedule for the customer, that's really important."
Florida State is taking steps to boost both ticket sales and donations. Former coach Bobby Bowden has inked a deal to work with the boosters as a fundraiser, and he'll attend games at Doak Campbell Stadium this fall for the first time since his ouster following the 2009 season. Meanwhile, the schedule should provide a boost to season ticket sales in 2014, with a neutral-site game against Oklahoma State and home dates against Notre Dame, Clemson and Florida driving demand.
Increased revenue is essential to offset the rising costs of doing business. Football expenses have grown sharply in the past decade, with scholarship costs rising annually and recruiting expenses and coaching salaries increasing at an unprecedented rate. It's a changing landscape, and maintaining financial flexibility is a priority.
"This requires a different thinking for everyone," FSU president Eric Barron said. "It's managing a race well."
That race doesn't always go to the richest, but those added resources do provide distinct advantages.
This offseason, Fisher hired Jeremy Pruitt as his new defensive coordinator at a cost of $542,000 per year. Pruitt's last job was at Alabama, where just three years ago he worked as an off-field member of the team's operations staff before being promoted to defensive backs coach. His quick rise to prominence is part of a pipeline Alabama coach Nick Saban has developed within his program, not only employing top assistants, but a vast network of support staff to oversee every detail of daily operations.
Saban's model is one Fisher has worked to implement at Florida State, but the scale is hardly the same. In 2012, FSU spent $8.3 million on salaries for Fisher, his assistants, and a support staff of about a dozen quality control and operations people. Alabama, meanwhile, spent more than $13 million and employs a support staff nearly three times that size, including former Clemson defensive coordinator Kevin Steele as a player personnel director at a salary similar to many on-field coaches at other schools. Those support personnel contribute directly to recruiting, film study and player development.
"It's huge. It's about the person you can hire when that money's very good," Fisher said. "You can hire guys, develop your coaches, have guys who can watch film, evaluate film, guys you can trust that you know that's time you can spend more coaching or doing other things. You know things are getting taken care of."
Beyond having the staff in place to identify, target and pitch top recruits, there's a need to invest in the luxury amenities that set a program apart, too.
When you're asking guys to come from a distance and bypass a lot of places, there has to be a reason to go there besides just winning. That's a big thing, but other things do affect it.
--Florida State head coach Jimbo Fisher
The indoor practice facility is a major step in that direction at Florida State, Fisher said, and he predicts a new off-campus housing facility currently underway could sway five or six recruits a year. But FSU is hardly alone in its rampant growth, and with each new palace erected at programs like Oregon or Arkansas, the ever-growing game of one-upmanship takes another step forward.
It's a matter of keeping up with the Joneses, and while all that extra spending might be largely superficial, Fisher said, it's a game top schools can't risk sitting out.
"Guys do notice a difference," Fisher said. "It's not the end all, and it shouldn't be, but it's like when you go to buy a house -- and for them, the cost is the same. You're going to look at other amenities and little things you may fall in love with. … When you're asking guys to come from a distance and bypass a lot of places, there has to be a reason to go there besides just winning. That's a big thing, but other things do affect it."
Through his first three seasons as head coach, Fisher has received enough resources from Florida State to recruit those players to Tallahassee and win with them on the field, but the battle for any extra edge rages on.
When Barron effectively demoted former AD Randy Spetman two months ago, it was with an eye toward a future in which Florida State ranks alongside the elite programs in the country, both on the field and with its checkbook. Wilcox's hire this week was the first step toward ensuring a battle plan is in place for the financial arms race that awaits.
"We want to be in the race," Wilcox said. "We want to be No. 1, not only in the ACC, but in the country."
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