Texas Athletics and Steve Patterson; Who is the Villain?

Steve Patterson was handed his pink slip this week and is now the former athletic director of the University of Texas. His inability to get along with his staff, coaches and boosters were known prior to the news breaking about his dismissal. What I find interesting is the position some in the media have chosen to take for his ultimate undoing in Austin.

Take for instance ESPN Senior Writer, Dana O’Neil’s article titled, Steve Patterson’s Fall Shows College ADs Can’t Be All Business. While other media personalities chose to highlight Patterson’s inability to play well with others as the source of his demise, O’Neil chose to approach his firing from the perspective of big business. Yes, that’s right; the evils of capitalism were the attributes that made Patterson public enemy number 1 at Texas.

O’Neil tells the reader that:

From a purely business standpoint, it wasn’t a bad decision.

And that, in effect, was Patterson’s undoing. College athletics may be a big business, but they still can’t be treated that way.

And that, in effect, was Patterson’s undoing. College athletics may be a big business, but they still can’t be treated that way.

Let’s be honest, college athletics is a big business and there isn’t a thing wrong with that reality. Part of the reason Steve Patterson was hired in the first place was due to the business nature of college athletics. Just look at his resume and you will see that his specialty is as a sports executive. To put it bluntly, the University of Texas knew what they were getting when they hired Patterson.

The University of Texas athletic department is run the right way. By right way, I mean that they fund themselves. Based on a 2013 report, the Longhorn athletic department is a self-funded entity that does not rely on subsidies to create the illusion that they are making a profit. They make a true profit.

Their ability to operate as a self-funded entity makes them a true producer in my mind. Wow, what a novel idea in this day and age. This is interesting to me when looking at one of Dana O’Neil’s criticisms of Patterson.

Parsing through the University of Texas athletics budget, Steve Patterson spied $250,000 dedicated to the school’s band. A quarter of a million dollars for a band seemed rather excessive, so as part of a budget fat-trimming spree, Patterson slashed the money dedicated to the Longhorn Band.

One of Patterson’s primary responsibilities as head of the athletic department was to maximize profits. His predecessors were capable of doing this and it is only logical to have placed the same expectation on Patterson. To truly run deficit free requires hard decisions to be made. Making the hard decisions are why Patterson had a multi-million dollar salary.

Even as a former band geek, I have no problem with Patterson wanting to take $250,000 away from the marching band. In addition to this, he also instituted a policy that all visiting bands would be required to purchase tickets. This procedural change in how visiting bands would be treated received attention when the Texas Tech Red Raiders beat writer sent a disparaging tweet about the topic. Truth be told, many athletic departments charge the visiting band for tickets and it has been this way for at least the past 25 years. In the specific case of the Big 12, there was a recent change in the conference agreement. Texas has defended itself on this matter by saying, in part:

Texas did not initiate the discussions on this policy. We are merely following the practice approved by the Big 12 member institutions.

Patterson’s athletic department was living subsidy free so why should he feel obligated to subsidize another department’s organization? This is all based on a simple question; are you a producer or a parasite?

It seems that ESPN’s Dana O’Neil considers Patterson the parasite in all of this simply because he’s “all business.” Being “all business” is not a bad thing and, again, is ultimately why he was hired. And if we’re being honest with ourselves, it is not why Patterson was fired. He was fired because he couldn’t play well with others and rubbed certain boosters the wrong way.

While ESPN is going after the former CEO of Texas athletics, they are also in the middle of their Longhorn Network contract with the university. So while attacking Patterson, Texas and all of college sports for being big business with their left hand, they are offering Texas a right handed hand shake that is potentially loaded with cash. Just how hypocritical can ESPN be in all of this?

The Longhorn Network has been met with scrutiny pretty much since day 1 and, from a financial standpoint, it becomes even more interesting. While Texas athletics runs at a true profit, The Longhorn Network has had its share of financial growing pains. As the linked article stated, the network has been a success for Texas, but not necessarily for ESPN.

At the outset of the network, the subscriber numbers were not as healthy as the projections forecasted. Clay Travis calculated that $25.8 million were made off of subscriber fees. In and of itself, that dollar amount looks great. However, when factoring in the cost of operating the network and the guaranteed $15 million average royalty that ESPN promised Texas, the numbers begin to look shaky.

I’m sure you remember the initial criticism that Dana O’Neil lobbed at Patterson; having to make cuts to the band budget in order to maximize profit margin. Guess what? ESPN’s parent company, Disney, has been asking ESPN to make cuts of their own in order to maximize their bottom line. If ESPN expects to make a profit, why should they have an issue with other businesses making a profit?

The network deal ESPN and Texas agreed to will be just fine provided that the network becomes profitable. If it doesn’t, ESPN will basically be subsidizing a portion of The Longhorn Network. And, since these television rights are about 1 team only, a case could be made that this is crony capitalism. I would contend that ESPN will do whatever it takes to ensure that the network does not go belly up before the contract runs out. Because if the network does start bleeding money, Disney may require ESPN to make even more difficult decisions than what Patterson was having to make at Texas.

So while Texas is doing business the right way, ESPN is yelling about the evils of capitalism in an effort to take them down. I would have more respect for ESPN and O’Neil’s article if they weren’t engaged in a network deal that seemingly requires them to be crony capitalists. And crony capitalists are who give true capitalists a bad name.