Sons of Stimulus: Breaking Down the "Reach for Excellence" Campaign
Much of the focus announcing Virginia Tech's "Reach for Excellence" campaign was spent on the high-level financial totals and VT's commitment to athletic excellence, but what does it really mean to add $400m?
Virginia Tech’s announcement of the Reach for Excellence campaign finally came amid growing buzz among the fan base that there would be an influx of financial investment from multiple funding sources including the President and BOV as well as significant private donations.
However, what the buzz failed to capture was just how transformational this investment would be, which now places Virginia Tech well into the top third echelon of the ACC as well as around the top 25 of ALL college athletic programs in terms of expenditures, according to the most recently reported USA Today NCAA Financial Rankings.
So what’s the strategy?
To execute a five pillared approach over the next few years to address the financial areas of need within the athletic department that, when implemented, will improve the performance of each team, thereby enhancing the fan experience, thereby raising the status of the VT athletics, thus elevating the celling of Virginia Tech’s overall brand as a university.
Sounds simple enough right?
Breaking it down a bit further, the Reach for Excellence campaign allocates funding towards the following areas (paraphrased from Tech’s official release):
● Football Enhancement Fund – Build a program to consistently compete at the top of the ACC, by incrementally adding $30m in Total Football Spending for recruiting, assistant coaches’ salaries, quality-control coaches, player development, and other capital needs.
● Cassell Coliseum – $75m in renovations to Cassell Coliseum ($50m raised privately).
● Drive for 25 – Increase Hokie Club membership to 25,000 donors to consistently raise $20m annually for student-athlete scholarships.
● Comprehensive Excellence For All Sports – Provide the necessary operating expenses, facility improvements, nutritional and strength & conditioning programs, and more for all Hokie athletic programs.
● Scholarship Endowments – Expand the capacity to support students and broaden the reach in recruiting.
With each area receiving some form of investment and laying out the detailed vision and path forward, fans can now understand how to better financially support VT athletics and align their donations accordingly, which is great, but what does this mean in terms of VT’s actual standing compared to other NCAA programs?
Well, let’s take a look.
Overall Impact on Hokie Athletic Department Expenditures: AKA – “The Budget”
For those wondering where Virginia Tech started before hiring Whit Babcock, in 2013, the total Athletic Department expenditures sat around $66.5m. Now it’s worth noting that under Whit’s leadership, as well as an influx of NCAA/Media Rights revenue, VT’s total athletic budget grew from $69.5m to $93.5m from 2014-18 respectively, an increase of 40% over 5 years.
And that increase should at least provide fans with the context that VT has always been focused on growth for the last half-decade, considering the total athletic budget only grew 12.9% from 2009-13, which spanned the 5 years before Whit arrived in Blacksburg.
However, the newly announced goal of increasing the athletic budget up to $125m from today’s level provides an additional 33.6% in expenditures!
So it wasn’t hyperbole when Whit Babcock stated that this new funding essentially DOUBLES the total athletic department budget from the level just before he came to Tech.
Now just imagine if VT also sees an influx of additional funding from:
● The Hokie Club’s campaign to ramp up individual donations beyond their stated goal
● An improved ACC media rights deal
● Selling out Lane Stadium and Cassell Coliseum (when back to full capacity)
● Aligning a better corporate sponsorship partnership
Where Does the Hokie Athletic Department Now Rank in Terms of Financials?
It’s one thing to hear how Tech will become a top third ACC program in terms of financials, but it’s another to see where you actually stand in terms of dollars and ranking.
Starting with the total athletic department budget, according to the same 2018-19 USA Today NCAA Financial Rankings, Virginia Tech with $93.9m in reported expenses sat at 48th overall which placed Tech AT OR NEAR THE BOTTOM of every other Power 5 conference program, but only around 8th or 9th in the ACC, which is more of a reality that half of the ACC consists of small private schools that lack significant financial capacity.
However, with the new influx of cash to $125m, Tech would theoretically leap to around 25th overall, sitting among programs like Oregon, UCLA, and Nebraska, which is uncharted territory considering each of those schools are infinitely larger national brands.
As for the ACC, being in the top third equates to a ranking just below Clemson ($131.9m) or Notre Dame (whose budget is not listed as a private school), meaning Tech now probably ranks 5th overall in the ACC and is well-positioned among the elite programs, especially in terms of Total Football Spending which we will get to later.
Want some more good news?
Using the same 2018 financials, the Commonwealth Cup gap in terms of total athletic department capacity between Virginia Tech and Virginia ($112.6m) is essentially reversed, with the Hokies going from $19m behind the Hoos to roughly $13m ahead.
What Does Adding $30m in Football Enhancements Mean?
In case you haven’t been paying attention, the landscape of how to compete in Power 5 football has changed more in the last 5 years than probably the entire 29-year Frank Beamer era, especially when it comes to recruiting, where traditionally college coaches attempted to compete for the attention of the nation’s highest regarded football recruits based on their regional reputation and the use of on-campus and in-home visits, coaching camps, and prior relationships with local high school coaches.
And while that system remains largely intact, the influx of new mediums such as online recruiting databases, self-promotion mediums, and social media has flipped the traditional script, where the majority of recruits now seem to be the ones competing for the attention of college coaches.
There has never been more evaluative film existing on the internet than today, which will only be usurped by the additional recruiting footage uploaded tomorrow.
Whittling it all down, VT just needs more recruiting eyeballs from an experienced group of trained professionals, in the form of quality-control coaches, player development personnel, graduate assistants, and other staff to better evaluate the massive annual pool of high school athletes.
Also, if you factor in the new tidal wave of Transfer Portal players, who are now authorized to switch programs mid college career without having to sit out a year, the demand to process the significant amount of film for all potential high school recruits AND college transfers has never been higher.
Meaning, the emphasis on how to immediately improve the program is clear… the Hokies need to massively expand its recruiting budget.
Luckily, that expansion has arrived, and the newly announced $30m Football Enhancement Fund that is set to fund several areas of needs over the next few years, is broken down into the following goals:
● Recruiting: $5 million
● Assistant coach salary pool: $10 million
● Quality control coaches: $5 million
● Student-athlete development: $2 million
● Capital needs: $8 million
What today’s announcement didn’t fully clarify was HOW the $30m would be added over the next 5 years, i.e. $6m year-over-year or by varying amounts, making it difficult to benchmark the immediate impact of how VT’s Total Football Spending budget would increase, in comparison to other ACC and Power 5 programs.
However, one realistic benchmark of how this funding would potentially increase Tech's standing among the competition is to show what even a “partial implementation” would look like since the total $30m is spread out over 5 years.
To start, as of 2018, Virginia Tech’s “Total Football Spending” ranked the Hokies 25th overall among Power 5 programs, at a total of $32.5m, which if you break it down by the available CAFI database financials looked something like this:
● Coaches Salaries: $9.3m (includes head coach)
● Recruiting: $563k
● Remaining Football Budget: $22.6m
In this instance, let’s equate a “partial implementation” of the total $30m Football Enhancement Fund as one-third or $10m, provided to the program in Year 1 to instantly address recruiting and staff.
If immediately added to the budget, VT’s football spending would increase to $42.5m, bumping them from 25th to 15th overall in terms of total spending, right between Michigan and Texas.
Take a minute to consider that.
By adding only ONE-THIRD of the total $30m Football Enhancement Fund, Tech’s football budget is already elevated to an ELITE level of spending, without raising ticket prices, adding corporate sponsorships, or waiting on a better ACC media deal.
As for the ACC, according to the same 2018 rankings, Virginia Tech’s potential $42.5m football budget would still place them 3rd overall (not factoring in Notre Dame, who is no longer an ACC football member next season). However, the gap between the Hokies and Clemson is significantly diminished with the Tigers reporting a $46.2m football budget that same year.
To summarize, while this funding does not provide as much flash as the $75m Cassell Coliseum renovation plan, it fundamentally transforms the recruiting budget by 10x the current amount as well as increases the capacity to hire and retain the necessary staff to facilitate the recruiting and development plan, which in turn, defines the path forward on how Virginia Tech can compete at the highest levels of the ACC, as well as the rest of the Power 5.
Or in other words… no more excuses. Go Hokies!