What to watch for in 2023: OSU's athletic department budget will reach $100 million for the first time

Editor’s note: This story is part of a series examining significant developments expected this year involving sports in Oklahoma.

STILLWATER — Oklahoma State’s annual athletic department budget has more than doubled during the past 13 years, keeping the university in line with the finances of most Big 12 schools.

A budget that amounted to $46.9 million in 2009-10 is at $99.6 million for the current fiscal year, according to information obtained by the Tulsa World through an open-records request. The upcoming budget, which will take effect in July, will surpass $100 million for the first time.

“We believe that we are good stewards of our resources and we are spending those resources in the best way that we can to be competitive,” athletic director Chad Weiberg said. “That in the end is what we’re here to do — provide a great experience for our student-athletes and compete because part of a good experience for our student-athletes is (the ability) to compete.

“But we also want to provide them all the support in the process, whether that’s academics or strength and conditioning or nutrition and all of those things that go into being successful on the field and in the classroom.”

Less than a decade ago, $100 million was viewed as a figure only the highest-funded and most profitable athletic departments could generate.

“Texas, Alabama, Oklahoma — all of those schools (have) $100 million or more in their budget,” previous athletic director Mike Holder said in 2014. “And we’re sitting back here at $70 million, and we’re trying to compete against Texas at $179 million. There’s a wide gulf there.”

OSU’s budget is comparable with the Big 12 schools that will remain in the league after the departures of Texas and Oklahoma to the SEC. Kansas had a $100 million athletics budget last year while Iowa State topped $100 million in sports revenue for the first time.

“There’s generally always been Texas and then Oklahoma has been next, but significantly lower than Texas,” Weiberg said. “Once you get (past those), all the rest of us are really grouped (close together).”

Kansas State, another Big 12 school, has an $83.6 million budget for the current fiscal year. The most significant discrepancy with OSU’s budget is a $10 million difference in sports operating, which includes coaches’ salaries and team travel and varies depending on how many sports a school fields.

In OSU’s case, the operating budget has increased partly because the university has upped its financial commitment to its long-term and successful coaches. Mike Gundy, the highest-paid football coach in the Big 12, will make $7.625 million in 2023.

Aside from sports operating (44.8%), the next biggest expense is athletic scholarships (10.3%). The athletic department pays $10 million to the university for having athletes on scholarship — where the first $10 million raised by the POSSE donor group goes.

Established in 1964 to fund scholarships, POSSE stands for Providing Opportunities for Scholastic and Sports Excellence. In total, the organization supplies a third of the athletic department’s revenue.

The other large piece of the pie is the $41 million that comes from the Big 12 and includes the football contract with ESPN and Fox along with money from the NCAA for the men’s basketball tournament. But more comes from fans in the form of donor contributions ($32.8 million) and ticket sales ($2.5 million).

“As important as that Big 12 revenue is,” Weiberg said, “our fans still are the most important thing.”

An additional budget item introduced last fall was the POSSE STAR Fund, which incentivizes academic success as the means for scholarship athletes to receive $5,980 per year, the maximum allowed by the NCAA. That results in $2.3 million in expenses.

“We had to find how to bring in $2.3 million,” Weiberg said. “We have been very fortunate. I think we have raised a little over half of that from additional contributions that people have made to it and we are still working on the fundraising for that.”

OSU prides itself on having a low student fee and minimal debt service. That debt stems from completed projects like the expansions of Gallagher-Iba Arena and Boone Pickens Stadium.

“That (debt amount of $2,425,551) is probably the lowest in the Big 12,” Weiberg said. “We will increase this next year … because of our stadium renovations. We are bonding that, so the debt service will go up but still will be low in comparison to other (schools).

“The reason why that number is so low is because we’ve had incredible support step up and help us make these things possible without us taking on a lot of debt.”

The budget, which doesn’t include separately fundraised projects requiring major gifts, is a collective effort featuring chief financial officer Jason Lewis and deputy athletic director Reid Sigmon along with Weiberg. The goal is obvious: keep the expenses lower than the revenue.

“We want to have a balanced budget,” Weiberg said. “Ideally, we end up with a surplus. If we do, then that gives us the option to build up and put that into reserve so that we have it in times of (need). I think that’s just part of operating very fiscally responsibly.”

COVID-19 resulted in a rare time of need when the athletic department had to rely on funding from the university. The annual budget is $1.5 billion for the OSU system, which includes campuses in Stillwater and Tulsa.

“We are one of, I think, the few athletic departments that are fully funded on our own,” Weiberg said. “We don’t want to be a burden on the institution. … If we’re operating over here on our own resources, then we don’t have to look to them for help.”