Texas Tech athletics reported record revenue of $146.8 million in FY 2023
The Texas Tech athletics department had $146.8 million in operating revenue for fiscal year 2023, a record for the department, its new financial report to the NCAA shows.
That's up from $110.2 million in fiscal 2022, the first year the Tech athletics budget hit nine figures. With total operating expenses of $136.4 million, Tech had an operating surplus of $10.4 million.
The financial report was obtained by The Avalanche-Journal and USA TODAY Sports through an open-records request in partnership with the Knight-Newhouse Data project at Syracuse University. The figures contained are not adjusted for inflation.
The biggest reason for the increase came in contributions the department realized — $56.25 million in fiscal 2023 nearly double the $28.75 million the year before.
Tech deputy athletics director Jonathan Botros indicated fiscal 2023 was an outlier, though, in that Tech used contributions received in previous years to pay more short-term debt on facilities projects. For example, it recognized $7.7 million in contributions to pay short-term debt on the Whitacre Center for Athletics Administration, a $9.4 million project that started in 2020, and activated $5 million in contributions to pay on the new Tech baseball team facility, a $14.5 million undertaking.
"Instead of us showing the dollars that came in, let's say three years ago, toward this project, we showed them once we actually paid the commercial paper on them," said Botros, the department's chief financial officer. "A lot of that money sat in accounts, and this was something we did on many accounts. The interest rate environment was so positive for us the past several years that it was more advantageous to bring in donations toward facility projects and let that money sit because the interest earnings on it were more than the interest expense on construction.
"So why not let it sit there? And once that kind of flipped and now we've seen a higher interest rate on debt ... that's when we started paying a lot of this debt off."
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Texas Tech strengthening debt position to take on football project payout
In June 2015, Tech athletics director Kirby Hocutt referred to long-term debt as "the Achilles heel of Texas Tech athletics." At the time, it was $111 million with nearly $12 million in debt service on the annual operating budget.
By the end of this fiscal year, Botros said Tech will have reduced the debt to about $52 million including short-term commercial paper, on track with the projection nine years ago.
"We've shrunk it considerably over the past several years," Botros said, "to put ourselves in good position when we take on additional debt for the south end zone and Womble (Football Center)."
Ongoing construction on the four-level south end zone building at Jones AT&T Stadium and the adjacent Womble Football Center are part of a two-year, $242 million project with substantial completion dates targeted for June and late August, respectively. Tech has attracted $102 million in pledges for it, meeting its original goal of at least $100 million.
When construction is complete, Tech will purchase the buildings from the Red Raider Facilities Foundation and plans to pay off the remainder via philanthropic gifts, financing, game-day premium revenue and operating revenue.
Asked if he expected to see annual operating revenue stay around $146 million, Botros said, "Yes and no. I definitely don't think it will stay there, for example, for this fiscal year, because we don't have nearly as much debt that we're going to pay down this year. We really took care of a lot of it last year.
"Now, going into FY '25, I think we could see another shift (upward), because once Red Raider Facilities Foundation allows the university to purchase back the project from them — the south end zone and the Womble Football Center — then we will have a much larger debt payment there, and then we will also have significant gifts that continue to come in that we will pay down debt with.
"So for FY '24, I wouldn't expect it to have such a large increase like we saw in '23, but I think in '25 we could see a pretty substantial increase again."
Texas Tech ticket revenue jumped 34% in fiscal year 2023
The financial report shows a jump in ticket sales revenue, to $18.21 million in fiscal 2023 from $13.56 million the year before. Most of the increase came in football ticket sales revenue, to $11.68 million from $7.74 million the year before.
"That is just truly thanks to Red Raider nation," Botros said, "and the success that we saw and the energy around many of our sports."
Revenue from licensing, advertising and sponsorships reached $15.755 million in fiscal 2023, up from $14.387 million in 2022 and $10.894 million in 2021.
"Royalties, as it relates with our partnership with Learfield's sponsorship support, is the highest it's been in the history of Texas Tech athletics," Botros said. "In addition to royalties, trademark licensing we have seen 10 to 20 percent increases the past three fiscal years. It's unbelievable the amount of licensed product our fans are purchasing."
This article originally appeared on Lubbock Avalanche-Journal: Texas Tech athletics reported record revenue of $146.8 million in FY 2023
