Inside SMU's pursuit of the Power Five — 'It's a couple hundred million dollars. I'm not losing sleep over it.'
By: Ross Dellenger - Yahoo! Sports
DALLAS —
David Miller is tall enough not to hide among crowds, particularly this one.
At an impromptu celebration within
SMU’s indoor football facility, there is no escape for
Miller. He is, after all, the chairman of the school’s board of trustees.
On this day, for a party 40 years in the making, he is dressed the part. In a red-and-blue plaid sports coat and slacks, he stares down through eyeglasses from his 6-foot-8 perch as, one by one, members of the SMU family form a receiving line.
For a brief moment, the scene is reminiscent of the 1970s Hollywood hit “The Godfather.” Supporters stop shy of genuflecting at the 73-year-old’s feet, restraining themselves to handshakes and hugs.
“Thank you so, so much,” a woman tells a smiling Miller.
“We appreciate everything,” a young donor says to him.
Miller is an oil man, with a deep booming voice and an accent you’d find on any Lone Star ranch. He began as an oil banker, then was an oil operator and now, sitting on a cushion of hard-earned cash, he's an oil investor. He’s got five children and 15 grandchildren, all of whom he expects to attend his alma mater, the oak tree-lined private school nestled in the plush neighborhood of Highland Park.
Who else but a wealthy
Texas oil tycoon would you expect to be behind SMU’s latest and most significant victory:
a move into the Atlantic Coast Conference, their long-awaited return to major college athletics.
How this all happened, a Hollywood script of a story with Miller as the lead protagonist, is no longer shrouded in secrecy.
Miller spent the last 14 months on what some Texans might describe as a wildcatting adventure, not for unfounded oil wells but for a major conference home for the
SMU Mustangs. In his eight-passenger Challenger 300 business jet, he criss-crossed the country on an orchestrated mission to convince influencers at one of three major conferences to invite into their league the school in Uptown Dallas.
Call it an amazing race: Twenty flights, two dozen clandestine meetings, hundreds of secret phone calls, a near-invitation to the Pac-12, an unprecedented revenue proposal and a commitment from a small group of oil executives and business moguls of more than $200 million — the price tag, as one put it, to get
into the club.
It is a story straight out of Texas.
“When you really think about it,” Miller says, “this was a business transaction.”
Pulling out of 'dark period' with help from deep-pocketed friends
The Westin Hotel in Charlotte is not a place for discretion. The glass tower rises over most other buildings in the busy downtown of what’s known as The Queen City.
And yet, during one April morning, the commissioner of the ACC, Jim Phillips, and his deputy, Ben Tario, gathered here in a boardroom with two less recognizable men: David Miller, captaining SMU’s expansion expedition; and Oliver Luck, the former NCAA executive hired by the school as a consultant.
The four men spent roughly two hours exploring SMU’s candidacy as an expansion member. Talks grew serious. Financial arrangements were discussed.
“They were interested in trying to understand that, if we are willing to forgo media rights shares, then the commissioner wanted to know, ‘How are you going to compete?’” recalled Miller.
Before Miller answered that question, long before he arrived at this meeting, SMU’s expansion journey began.
The school has spent decades slowly crawling out of sports wilderness, a byproduct of the harshest NCAA decision on record: the infamous death penalty, which discontinued the football program for two seasons in 1987-88 over impermissible benefits to players — actions now legal through name, image and likeness (NIL) rules.
For nearly 80 years, SMU competed in a power league and won. The old Southwest Conference featured the likes of Texas, Texas A&M, Baylor and
Arkansas. The Mustangs claimed 11 conference football titles.
But the NCAA’s decision rocked the university, so much that officials radically de-emphasized sports.
“It was a very dark period,” said Clark Hunt, now the owner of the
Kansas City Chiefs who played soccer at SMU when the NCAA delivered its blow. “At the time, we didn’t know how hard it was going to be for the university to bounce back. It took 30-plus years.”
The climb first began academically. In his 27th year as school president, Gerald Turner oversees a university bursting with academic success. Student applications have tripled under his leadership, and a bevy of on-campus buildings have either been renovated or rebuilt.
SMU, a top-75 institution in the U.S. News rankings, is on the cusp of attaining the prestigious status as a Research 1 (R1) school.
But one of Turner’s greatest gifts is cultivating the school’s league of wealthy donors.
SMU boasts some of the most deep-pocketed boosters in America, many of them alums whose business success and riches they trace back to their education — itself steep and exclusive. Tuition is $62,000, enrollment hovers around 7,000 and the acceptance rate is about 53%.
One of the chiefs among the donors is Miller, whose net worth begins with the letter ‘B.’ He’s donated more than $100 million to the school, at least $75 million of it to academic buildings, and his name graces the floor of SMU’s basketball court.
In 2012, Turner hired as his athletic director Rick Hart, then at Tennessee-Chattanooga. Hart aligned school officials and donors with a mission to improve the quality of coaches and facilities.
Many of the most recent investments are tangible. The school’s new $110 million south end zone project should be completed by next season. One donor, Gary Weber, footed half the bill. Another donor, Bill Armstrong, was lead giver on the $25 million Armstrong Fieldhouse, the school’s indoor football facility.
A few years ago, Armstrong helped create the Vision 2025 Fund, a more than $10 million pot meant to hire and retain coaches with an important overall goal: attain membership in a Power Five conference by 2025.
More than a decade ago, the school began the Circle of Champions, a campaign of major donors that led to the hiring of football coach June Jones and basketball coach Larry Brown. The cost of entry to the Circle of Champions: an annual $100,000 pledge.
“Our donors and alums differentiate us from others,” Hart acknowledged.
The Mustang Club, the athletic department’s booster group, normally generates about $15-20 million in annual giving, Turner said. That figure is on par with donations reported last year from schools like
North Carolina,
Arizona, Arkansas and Purdue.
In 2021, the university launched a $1.5 billion capital campaign that two years later, despite pandemic effects and a teetering economy, has generated $1 billion in donations.
Many of the country’s powerhouse athletic programs lean on a small group of millionaires for investments. SMU has billionaires.
Most of them sit on the school’s board of trustees.
“It’s amazing,” said Steve Orsini, who helped lay a foundation as SMU’s athletic director in 2006-2012. “I was awestruck when I’d go into a board of trustees meeting. I’ve been at a lot of universities, but that’s as good of a room of committed and successful people as I’ve seen anywhere.”
All of this is why Miller figuratively shrugged at Phillips' question on that April morning in the downtown Charlotte Westin.
How, if SMU were to take such a reduced share of television money, would they compete?
Miller smiled from across the table.
“It’s a couple hundred million dollars,” Miller said. “I’m not losing sleep over it.”
Inside SMU's cross-country pursuit of Power Five status
David Miller does not consider himself a wildcatter.
In Texas, that term is reserved only for the brave and curious men and women who scour the globe in search of unfounded oil wells. The original wildcatters are now long gone, but they are not lost to history. Columbus Marion Joiner, known in the late-19th century as “Dad,” was the father of the east Texas oil strike. Glenn McCarthy struck so much oil near Houston in the 1930s that newspapers dubbed him “King of the Wildcatters.”
Miller is a wildcatter of a different kind.
His expedition began in the summer of 2022 after SMU leaders, donors and consultants settled on a plan to pursue membership in the Big 12, Pac-12 or ACC. The Big 12 made sense geographically. The Pac-12 made sense realistically. And the ACC? It made sense culturally.
It was also a complete long shot.
“The ACC was not our original intention,” said Turner, the school president. “The Pac-12 was moving a lot quicker.”
Roughly a year before Miller’s expedition began, university leaders created what they called the Athletic Task Force, a group of about 12-15 influential, high-level donors with a mission of finding the Mustangs a new home. Amid a wave of conference realignment moves, a sense of urgency grew, much of it sparked by the Big 12’s decision to pass on SMU in 2021, instead adding
UCF,
BYU,
Cincinnati and, the one that most boiled blood in Dallas, the University of Houston.
Losing football coach Sonny Dykes to chief rival
TCU, once in the Group of Five itself, served as another harsh reminder of SMU’s place in the college football hierarchy. The Horned Frogs’ run to the national championship game in 2022 intensified the realignment desire.
The “Power Five Task Force,” as donor Bill Armstrong refers to it, met occasionally on calls and in-person for the last 18 months. From his private jet or some distant college town, Miller delivered realignment updates to the task force.
To help in the search, the school hired consultants such as Luck, the former
West Virginia athletic director who has deep connections in the industry. Luck is responsible for connecting SMU administrators with about two-thirds of the powerbrokers in each conference, Miller said. Those included key board members, university presidents and provosts, major donors and other athletic administrators.
SMU AD Rick Hart, Turner and Miller were the point men. Hart handled athletic directors and Turner took school presidents — both mostly by phone or Zoom. Flying in his private jet, Miller focused on in-person meetings with board members and boosters — in many ways, the most influential decision-makers.
Hart described the endeavor as a “campaign.”
Miller flew to at least 20 different cities, including Los Angeles, Charlotte, Scottsdale, Winston-Salem, New York, Charlottesville, Seattle and Miami. In one of his first trips last summer, he took a five-hour flight from his summer home in Montana to Charleston, South Carolina, to meet with an influential Clemson board member, only to learn once he landed that the person tested positive for COVID-19.
The meeting was off and Miller returned home.
“It got off to a bad start,” he remembered.
Things got better, mostly because of his corporate connections.
Miller is the co-founder and managing partner of EnCap Investments, a leading provider of private equity to the energy industry. EnCap has managed over $37 billion of institutional capital since its inception in 1988 and ranks as one of the 20 largest private equity firms in the world.
“A lot of universities have bought his company’s funds,” said Turner. “As a result, he knew some trustees already who are on the investment committees of their university boards.”
At one point last fall,
SMU officials were engrossed in serious conversations with all three conferences. In fact, on Feb. 7, photographers snapped photos of Pac-12 commissioner George Kliavkoff watching a Mustangs basketball game from a suite, flanked by Turner, Miller and Hart.
While their flirtation with the Pac-12 and Big 12 was public, the dance with the ACC remained somewhat veiled.
Miller and Turner held their first Zoom call with ACC commissioner Jim Phillips last November. Two months later, Miller flew to Los Angeles the weekend of the CFP title game, coincidentally featuring TCU. He wasn’t there for the game. Miller and Luck held back-to-back meetings in a downtown LA restaurant with two conference commissioners: Phillips and Kliavkoff.
By that time, chances of SMU entering the Big 12 were dwindling. Miller’s trips to Waco and Lubbock went nowhere, and his communication with Big 12 commissioner Brett Yormark slowed to a crawl. “Brett told me they had other priorities,” Miller said.
Turner believes he knows why. The Mustangs were blocked by TCU, Baylor, Houston and Texas Tech. “We give the Big 12 schools in Texas competition now in the American,” he said, “and so if we had equal billing in a power league, we could make it even more competitive.”
It was another disappointment in the school’s years-long chase for a power league.
The heartbreak stretches back to 2011, when the Mustangs accepted an invitation from the Big East before the league evolved into a basketball-only operation. The Big 12 has now twice denied them entrance.
And then came the latest blow. On Aug. 4, Pac-12 presidents were scheduled to meet on an early morning call to agree to a streaming-only media deal with Apple, as well as add two schools: San Diego State and SMU.
Armstrong, attending an SMU football camp practice that day, celebrated when reports surfaced that morning of the meeting. Flashing his phone to supporters and staff members around him, the Mustangs’ practice turned into a jubilant celebration.
Two hours later, the 108-year-old Pac-12 conference crumbled when
Washington and Oregon left for the Big Ten.
Miller’s phone buzzed with a text message that afternoon. It was from the Pac-12 commissioner.
“You can’t imagine how close we were to signing the grant of rights,” Kliavkoff wrote to him. “You guys were our first call.”
'Are you in?'
In a spacious board room adjacent to Gerald Turner’s presidential suite, some of the most powerful and wealthy men in Dallas gathered.
Rick Hart, SMU’s athletic director, and David Miller, the expansion captain, moved to the front of the room and proceeded to present a financial model for the school’s entrance into the Pac-12 and ACC. Close to receiving an invite to either, the proposal required the school to forego the league’s television revenue for seven to nine years.
“We needed a significant commitment from each person in the room to make it happen,” Miller told them. “It’s all about the money.”
Hart and Miller hadn’t completed the presentation when the first hand went up. And then another. And another.
The 12-person group didn’t need any more convincing.
“It was, ‘OK, we know what we have to do,’” recalled Bill Armstrong. “It wasn’t, ‘Bill, are you good for a million a year?’ Nothing like that. It was, ‘Are you in?’ And everybody was like, ‘We’re in.’”
Armstrong, one of the country’s last real oil wildcatters, made the largest oil discovery in decades on Alaska’s northern slopes in 2013. The company sold its stake in the discovery for an initial price of $400 million, a figure that could rise to $850 million.
He’s not often surrounded by people with more wealth. He was that day.
“It was a hitter’s room,” he said. “A lot of dough.”
Attendees included Ray Hunt, a second generation oil man with a net worth of $7.2 billion; Rich Templeton, the chairman of Texas instruments and a man that Forbes once named in the top 50 of American Innovative Leaders; Chiefs owner Clark Hunt; Marty Flanagan, recently retired as CEO of Invesco; Texas automotive magnate Carl Sewell; Gerry Ford, a banking executive worth $2.4 billion; and Rob Dedmon, another billionaire and heir to the largest golf course and country club operating company in the country.
The combined net worth of the room was more than $15 billion.
What this room of power brokers committed to that day was unprecedented in college sports history. To understand its significance, one must understand the finances of a college athletic department.
Most departments are kept afloat by four primary revenue-generators: student athletic fees and institutional support, football ticket sales, football-tethered donations and conference distribution, most of which is from the league’s television package, which in most cases is at least 90% derived from football.
At the Power Five level, television contracts have become so lucrative that they are often the leading revenue producer for an athletic department. In the SEC last year, TV money accounted for 37% of the average department’s budget.
Conference television packages range drastically in value — a reason for the latest realignment as programs jockey to join leagues with the richest TV deals. Over the next five years, SEC and Big Ten schools are expected to reach $70 million in annual distribution. ACC and Big 12 schools are projected around $40-45 million.
There is a significant dropoff to the ranks of the Group of Five. Last year, SMU received $9 million in total conference distribution from the American Athletic Conference, about 80% from the television deal.
Through the course of negotiations with the ACC, the school committed to accepting no conference television revenue in its first nine years in the ACC. While other ACC teams get upwards of $45 million, SMU will receive nothing?
Not exactly.
“People say we are going over without any money,” Turner said. “Well, no. We’re going over with what we’ve got now.”
While SMU will not receive the largest portion of the distribution — TV money — the Mustangs get everything else. Administrators expect to receive about 25% of an ACC distribution share, or roughly $10-12 million annually in cash from NCAA tournament, bowl games, the CFP and the conference’s new incentive-success pool.
That still leaves a gap of $30 million annually between the Mustangs and the original 14 ACC programs — a whopping difference that could impact resources such as coaching salaries, recruiting budgets, staff size, etc.
That’s where the millionaire and billionaire boosters enter the picture. Completely closing the gap isn’t necessary, Turner said. But he did not rule it out.
“We have nine or 10 of them who will unanimously go after it,” Turner said. “That allowed us to do this.”
How it all came together
In 1987, when the NCAA slammed SMU with the death penalty, David Miller was a 40-year-old banker living in Denver making a low enough salary that his annual donation to the school was $100.
This now makes him chuckle. Twenty years prior, he starred on the SMU basketball team during a student-athlete experience in which he paid zero tuition as a scholarship player. Always hoping to return the investment, he showered the school with those millions over the last decade.
But deep inside, well before he even became board chairman last year, Miller held another goal: get the Mustangs into a power league.
“I envisioned this,” he smiles.
Well, maybe not exactly this.
SMU’s offer — nine years and zero TV money — is an unusual way to enter a conference. In an interview with Yahoo Sports, one Power Five athletic director says it sets a “concerning” precedent moving forward, creating such a low bar to gain entrance into a league.
But this was an extraordinary circumstance. The ACC spent the last two years searching for additional revenue to appease a select group of schools — mostly football powers — over the gap in TV revenue between it and the SEC and Big Ten. In a further sign of fragmentation, the conference’s vote to expand was not unanimous — a rarity in conference decisions.
Three of the league’s historic football powers — Florida State, Clemson and North Carolina — voted against the move.
Miller knows why.
“It was really about their dissatisfaction with the formula around the success-initiative,” he said. “They wanted more.”
Until 2033, SMU is annually forgoing $24 million, the amount of an ESPN share that the league is required to distribute to the conference for each new team. Cal and Stanford, accepting a 30% share, are forgoing about $16 million each in the first seven years. That’s a total of $56 million annually.
Roughly half is expected to be distributed to original league members and the other half — $25-30 million, Miller estimated — will be placed in a success-initiative pool awarded mostly by football success.
Even though three of the league’s four historic football powers voted against expansion, the success-initiative pool was a critical piece to striking the deal. During that April meeting in Charlotte, Miller laid it out for the commissioner.
“We can take nothing and help you solve a problem,” Miller told Phillips. “The arrangement is a huge score of capital to flow into the pool for the football schools. Am I connecting the dots?”
Across the room, Phillips nodded his head.
In an interview with Yahoo Sports, Phillips declined to discuss financial figures, except to say that SMU was “aggressive in how they could fit into the ACC.”
The last month of Miller’s expedition was the most intense. A week after the Pac-12 collapse, an expansion straw poll from ACC presidents failed, by one vote, to gain the requisite 12 votes for passage.
While SMU was in serious consideration as an expansion candidate, the straw poll primarily focused on the additions of only Cal and Stanford, SMU president Gerald Turner said. In the three weeks between the straw poll and the final expansion vote on Sept. 1, the Mustangs’ candidacy grew stronger.
Not only did SMU’s addition bring the additional revenue from the TV shares, the Dallas market and a strong fit as a private, academic institution, the school introduced an interesting travel concept. In conversations between Turner and Stanford ambassador Condoleezza Rice, the SMU president presented a plan for the two West Coast schools and the original ACC schools to meet in Dallas to hold Olympic sports competition at SMU’s venues.
In the future, Turner hopes to even broaden the plan to incorporate other events.
“I know in talking to the mayor of Dallas, there is great interest in making Dallas an ACC city,” Turner said. “It would be great if the ACC tournament one day was at the American Airlines Center.”
The final week of the expedition was a roller coaster. An ACC presidents call planned for Monday was postponed because of a shooting on North Carolina’s campus. The next day, a hurricane roared ashore near Tallahassee and angled up the East Coast.
What was next, Turner thought. Locusts?
Days before the vote, Miller made one last phone call to an important person at NC State, seen as the potential swing vote. He phoned the school’s board chairman, Ed Weisiger.
This wasn’t the first time the two talked. About a month prior, around the time of the straw poll, Miller and Weisiger spoke in a conversation that produced surprising news: Weisiger and NC State had not, at that point, been made aware of SMU’s financial proposal from the league office. “On the second call, he didn’t say they would flip,” Miller said, “but they were aware of the financial arrangement and it was compelling.”
About 12 minutes into the 7 a.m. presidents meeting on Sept. 1, the vote unfolded. Hart’s phone buzzed at about 7:15 a.m. It was an ACC athletic director.
“NC State flipped,” the message said. “Welcome to the ACC!”
Hart is an ACC guy. He grew up in North Carolina and graduated from UNC. He’s fulfilling a wish to be an ACC athletic director. Did he think this is how it would happen?
“No,” he chuckles in an interview just hours after the news broke.
Hart shakes off any criticism of SMU’s expansion campaign. If some want to say that the school bought its way into a conference, well, fine. But that’s not how they see it.
“You can’t forgo anything that you don’t have,” he says, sitting in his spacious office overlooking Gerald Ford Stadium.
“There’s something special with doing more with less,” he continues. “I’m not worried one bit. Every league has its high-resourced and low-resourced schools. Just because you’re a high-resource school doesn’t mean you win.”
Back inside the Armstrong Fieldhouse, SMU’s celebration is winding down. Miller stands tall among a couple dozen people who remain. His receiving line is dwindling. Behind him on the building’s jumbotron is the school’s iconic red Mustang figure paired with the ACC logo against a blue backdrop.
A man slowly walks toward Miller, his white SMU hat pulled low.
It’s Paul Loyd, another mega-booster and a member of the small group of donors on the expansion task force. Loyd captained the Mustangs to the Cotton Bowl in 1967 and eventually served as chairman and chief executive officer of the world's largest offshore drilling company.
He’s given millions to the school, most recently as part of a group of donors who are pooling $1 million annually to SMU’s efforts with name, image and likeness (NIL).
It’s an ironic twist.
A member of the Mustang Club when the NCAA delivered its death penalty, Loyd stands here in what feels like a full-circle moment. He is now legally able to distribute funds to SMU players. And the Mustangs, after nearly four decades searching for an elite home, have returned to the major college ranks.
“That’s what makes today cool for me,” Hart says. “No one else can relate to those people who saw the death penalty here. And there was nothing really going to heal that wound — except for membership in a Power Five.”
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