Are You Ready for Some Football?

Some CFOs have tough jobs that require making tough decisions. For Steve Pace, CFO of the Big 12 Conference, the hardest decision may be which bowl games to attend (he has helped negotiate Big 12 schools appearing in seven of them on an annual basis). His job has had him playing golf with former Washington Redskins quarterback Joe Theismann, being interviewed on the red carpet at the ESPY awards, and attending all of the Big 12's Rose Bowl appearances -- including Texas's dramatic win over USC in 2006. He regularly attends the Final Four games of the NCAA men's basketball tournament and has front row seats for the Big 12 conference tournament.

Few finance professionals have as much fun in their career as Pace, who has served as CFO of the Big 12 Conference since 1996. The Big 12 Conference manages the league sports of its 12 member schools: Baylor, Colorado, Iowa State, Kansas, Kansas State, Missouri, Nebraska, Oklahoma, Oklahoma State, Texas, Texas A&M, and Texas Tech. In addition to football, the conference activities cover 21 additional sports ranging from basketball to cross country. Steve Pace helps to keep the financial score while maximizing the returns to the schools.

Steve Player: Many readers believe that you have one of the coolest jobs in finance. How did you become the CFO of the Big 12 Conference?

Steve Pace: Some of my early clients provided exposure to this opportunity. I developed industry expertise serving as an auditor and outside consultant for the Southwest Conference beginning in 1978. We also did work for the State Fair of Texas.

While we were serving the Southwest Conference, four of its previous members agreed to merge with the Big Eight Conference to form the new Big 12 Conference in 1995. This led to the other members moving to other conferences and the end of the SWC. While assisting with the wind-down of the SWC, I was asked to help further develop the financial model and infrastructure to establish the Big 12. In the course of doing that work, they offered me the CFO position.

When the job offer came, I had been doing a lot of consulting and expert testimony. I looked at the 30 weeks per year that I was traveling and the headaches of dealing with lots of deadlines and a high degree of stress. While these engagements were good for business, the stress of continual interaction with lawyers was wearing me down. The more I thought about it, the more I decided that it was a job offer I couldn't refuse.

Player: As CFO, what roles do you have to play in serving the Big 12 Conference?

Pace: My role as CFO is to bring a different perspective to the discussion. With my background from working with both privately owned and publicly held companies, I seek to bring an entrepreneurial viewpoint into an organization composed of people from a not-for-profit, higher education background. This enables the conference to look outside the box at nontraditional ways of operating and improving conference finances.

Player: What are some examples of this?

Pace: The way we conduct championship events is one way. We have negotiated partnerships with the host venues that help to improve the conference revenues. The venues benefit from tax revenues generated by added visitors filling their hotels and restaurants. It also provides media exposure for their city. Our partnerships seek to create mutually beneficial ways while providing a great backdrop for our events.

Another example is the numerous multiyear bowl game agreements. Currently, the Big 12 has agreements to send teams to seven bowls, including a guaranteed participation in the Bowl Championship Series. In addition to the financial benefits, these agreements help to increase the collegiate experience for the universities selected as well as help them build their alumni relations.

We were also able to negotiate a conference-specific television contract increasing revenues and exposure for our member schools. We are looking for additional ways to expand our media partnerships and branding relationships in very visible ways.

One of the key things we helped develop was an item you have likely never heard about unless you are in university finances. This was the development of the member participation subsidy, which is the reimbursement policy for the member schools who participate in championship events. Similar to corporate revenue- and cost-sharing, this agreement is critical to balancing the often competing member interests by establishing an equitable way to reward schools for participating. This effort required working with athletic directors, business managers, and financial officers from the member institutions to agree on equitable sharing of revenues generated. Even though all of our schools are great institutions, they have very divergent structures, sizes, and needs.