If Texas Businesses Were Texas College Football Teams
School is now in session and the 2016 college football season is officially underway. We thought we’d channel our excitement into relating college football teams to what we know best: Texas business.
There’s a whole lot of sport in every business. The grueling hard work, the strategies and leadership employed, the competition faced, and the big wins or losses can be comparable to what happens on the gridiron. Today we’re pairing nine college football teams in Texas with their Texan business counterparts.
University of Texas (Austin): AT&T
This one is tough. It’s the biggest, most prominent Texas team from a national perspective, so you’d think I’d go with the biggest company in Texas, Exxon Mobil, which everyone knows. We all drive by their gas stations. However, I would argue that AT&T is a better match.
Most everyone has opinions about the University of Texas. From their incredibly rabid fan base to their historical record at the top of Texas college football, to their 15 years of near total dominance nationally that started with the hiring of Mack Brown, Texas has its fair share of admirers and detractors. Similarly, a lot of people have serious opinions of both AT&T and Exxon Mobil. Nevertheless, people are far more passionate in their opinions of AT&T than Exxon Mobil.
AT&T is very much a love ’em or hate ’em company, much like the UT football team. Texas makes a lot of money, has its own TV network, and doesn’t shy away from leveraging their strength to get what they want. Does that not sound just like AT&T?
Texas A&M (College Station): Exxon Mobil
If Texas couldn’t be Exxon Mobil, then A&M has to be. After all, the school does have a huge endowment (larger than UT even) in large part due to oil. Like Texas, A&M also has a rabid fan base, possibly even more rabid than Texas. No matter where in the world you go, it seems like you always run into someone that is proudly proclaiming that they went to A&M or are fans of A&M.
Exxon Mobil doesn’t have the flash and adventure of AT&T. Oil is boring, but oil is conservative, relatively stable, and consistent. A&M almost always has a winning season, even in their down years. You could argue that they had 15 years of dominance just like Texas did, in their case from 1985 to 1999, and yes, they were certainly the superior team during those years.
However, head-to-head, Texas’s record over A&M is 76-37-5. And A&M wasn’t able to parlay their 15 years into the juggernaut that Texas did. Exxon Mobil is no longer the largest company in the world and no longer part of the industry that is talked about in the news every day. Both Exxon Mobil and A&M would love to have the national prominence of AT&T and UT, but just aren’t there.
Baylor: Tenet Healthcare
Oh Baylor, what can we say about you? There’s an old idiom about one’s eyes being bigger than one’s stomach. I think this applies here. Alternately, ambitions are bigger than practicality. Baylor is a relatively small school in a relatively small city in Texas with a ton of in-state FBS competition. When I think of Baylor sports, I think of scandal, not just football, but also basketball. There’s really only one Texas company that is repeatedly mired in scandals, Tenet Healthcare.
We can talk about the history of the football team, conference realignment, compare recruiting versus other Texas teams, but really all anyone is going to remember is the last two to three years of scandal and what went so terribly wrong.
Texas Tech: Southwest Airlines
They have a football team? 20 years ago, if you weren’t from West Texas or an alumni of Texas Tech, this is probably what you would have been thinking. If you look further back, Texas Tech didn’t join the Southwest Conference until more than 40 years after the conference was founded. It was the first new member of the conference in 33 years.
In fact, as a school, Texas Tech is a relative youngster. It’s the second newest school on this list, beating the University of Houston by four years. So Tech can be excused for not having the rivalry and recognition of all the other Texas schools. That said, Tech came onto the national stage first with the arrival of Mike Leach.
Leach brought the Air Raid Offense to Tech and took Tech to their only division title in history. Unfortunately, those are the only years that could be considered a period of dominance in the modern era. Even in its best year, it still had to feel like it wasn’t getting any respect. So we’re looking for a relatively young Texas business that just can’t get the respect it desperately wants. Southwest Airlines anyone?
For a long time, Southwest was the upstart, new airline. When it was founded in 1967, Southwest was going up against some major competition. In fact, at the time four other major airlines were already based in Texas. Southwest Airlines competed with its well established competition much like Texas Tech has to compete with the older, more established UT & A&M football programs.
Texas Tech football hasn’t had the sustained success of Southwest Airlines, but in terms of personality, the two are very similar. Both like to do things their own way and both want to emerge as equals to their peers. Southwest sped up consolidation and emerged as one of the remaining “Big 4” airlines. Will Texas Tech be able to do the same?
University of North Texas: Legend Airlines
University of North Texas is a public university that almost seems forgotten. The school traces its roots to 1890 but didn’t take its current name until 1988. While UNT originally started playing football in 1913, it has only been playing uninterrupted at the FBS level since 1995. Most of those years were in the Sun Belt Conference, which really didn’t do a lot to bring a lot of national prominence to a team. Since 2013, it has played in Conference USA, which makes this the first school in our list to not be in a Power 5 conference.
Their claim to fame is two-fold, both involving win streaks. From 2001-2005, UNT had a 26 game conference win streak. Unfortunately, that success didn’t last and the coach was fired at the end of the 2006 season following 2 consecutive losing seasons. Their next head coach, Todd Dodge, coming in with a 64-game win streak at the dominant Texas high-school program, didn’t have much luck turning the team around. Since 2007, UNT has had only one winning season, going 9-4 in 2013. Last year, their record was 1-11. That’s bad for any team, but 1-11 in a non-Power 5 conference isn’t doing your reputation any favors.
There’s no way you can argue that UNT is comparable to any of the Fortune 500 businesses in Texas. I can liken them a bit to Legend Airlines. They were formed to become the new upstart airline to take on Southwest. Despite building a great new terminal and offering a great in-flight experience, they spent most of their money defending themselves in court from challenges by American Airlines. They only managed to operate flights for about eight months before their terminal was seized by the City of Dallas under eminent domain and demolished.
Southern Methodist University: Dynegy
Southern Methodist University is the only school to get the dreaded “Death Penalty.” What Texas company was brought to its knees by scandal, lawsuits, bad behavior, and fraud? I’d liken SMU to Dynegy.
Remember Enron? Dynegy managed to acquire Enron’s best (real) asset immediately after Enron filed for bankruptcy. Dynegy operated in many of the same business areas as Enron and like Enron, had its own problems with fraud, poor management, and scandal. It nearly went bankrupt later that year. Several employees were indicted with some being convicted, the company paid hefty federal fines, and spent hundreds of millions to settle shareholder lawsuits. They struggled for years after that and finally did declare bankruptcy in 2012.
Likewise, SMU came out of the death penalty in 1989 but struggled mightily for years. In 2009, they even thought that they managed to put everything behind them. However, like Dynegy, they again hit bottom. Over the last two seasons their record is 3-21. After the 2012 bankruptcy, Dynegy is still losing money, but has positive cash flow and expects a positive adjusted full-year EBITDA. After winning only 2 games last year, the media is predicting SMU to improve to 4 wins this year. Could both these organizations start trending up?
Texas Christian University: Sysco Corporation
A lot of can people forget TCU has a football team. In Texas, they are overshadowed by Texas, Texas A&M, and lately, University of Houston. It’s not too surprising. Between 1939 and 1993, TCU did not win a single conference championship. They went without any conference wins 4 different times. In 1994, they finished tied for 1st with a conference record of just 4-3.
A year after hiring a new coach, they turned the corner in 1999 and started winning a majority of their games. In the 4 seasons from 2008 to 2011, they went 47-5. Then conference realignment happened and they moved to the Big 12. It took them a bit to get used to the new competition, but over the last 2 years, they have gone 23-3 and finished the seasons ranked #3 and #7 in the AP.
What company does this remind you of? Or more likely, which big company have you totally forgotten about? The answer is Sysco Corporation. They’ve been around for a long time, but never had a high profile. In 1996, they became the 3rd largest company in Houston with more than 30,000 employees. They then started making acquisitions to speed their growth and their stock made significant gains from 1996 to 2004.
Sysco had a bit of a setback for a couple of years, getting lost in a general economic downturn and being punished for not being a technology company, but got back to their winning ways in 2013. That year was notable for them because of their attempt to buy a competitor for $3.5 billion. Ultimately the acquisition was blocked 18 months later on antitrust grounds because they would have controlled 75% of their market. Over the last 2 years, it’s stock has gone up about 40% and it has out-performed the S&P 500 by about 350%.
University of Houston: American Airlines
The football program at University of Houston has had more success, historically, than many of the other Texas schools. They even have a Heisman Trophy winner, alongside fellow Texas schools UT, A&M, SMU, Baylor, and TCU. They were the first school in Texas to have an African American scholarship player.
Starting play in 1946, they began to see some success and went to their first bowl game in 1952. A year after SMU’s “Death Penalty,” the NCAA charged UH with 250 violations, placed the program on probation for five years, banned the school from post-season play for two years, banned them from live television for the 1989 season, and reduced their scholarships to 15 for the 1989 season. Not as bad as the “Death Penalty,” but still very severe.
The team began a decade-long period of decline, exacerbated by the 1989 scholarship reduction. Fast forward to 2014 when Tom Herman was hired as head coach in December. They finished the season at #8 in the AP. Throughout the offseason, everyone has been talking about that 2015 season and to what heights UH can achieve going forward. Within the Texas market, there is finally a feeling that UH is a real, nationally relevant football program, and one that should be feared by the major Texas teams such as UT and A&M.
If I look for a company that had a relatively long history of overall success, followed by 10 years of decline, and then total re-emergence, I’d have to consider American Airlines. American traces its roots to the 1930s and saw sustained success for decades.
American, like Houston, became the first major airline to break an important barrier. In 1973, they hired their first female pilot. They were also the first to develop computerized reservations systems and developed the modern frequent flyer loyalty program.
Just months after purchasing a major competitor, TWA, the terrorist attacks of 9/11 happened, leading to a historic collapse of nearly every major airline. American was one of the few major carriers that avoided a bankruptcy filing during this turbulence.
After its rivals used bankruptcy and mergers to reduce costs, reduce capacity, and reduce competition, American ultimately suffered. They were dethroned as the largest airline and generally struggled to compete with their peers. American finally succumbed to the pressure to declare bankruptcy in 2011 and merged with US Airways in 2013.
They once again became the largest airline in the world. They are even feeling comfortable enough to build a new headquarters on a 41-acre piece of property in Fort Worth, Texas. It’s much like how schools build new stadiums when their football teams finally start doing well.
Things are looking good for American, just as they are with Houston, but doubt will always remain for both. Houston just isn’t the blue-blood program that Texas and A&M are. They are always one coaching change away from mediocrity and airlines are notoriously difficult businesses to operate.
Rice University: Digital Convergence Corporation
I struggle with what to say about Rice. It’s mean, but a quote from The Replacements (2000) comes to mind: “Hey Falco! You’re not even a has-been! You’re a never-was!” To be fair, Rice did once go to the Orange Bowl—back in 1954. Their biggest claim to fame is their 3rd head coach, John Heisman. Yes, the same Heisman that the Heisman Trophy is named after. Yet ironically enough, no Rice player has ever won the Heisman.
Out of their 18 head coaches, only four have left with a winning percentage greater than 50%. Another four compiled a winning percentage of less than 20% (over 13 seasons). Their all-time record is 463-581-32.
Their current coach is David Bailiff who was hired in 2007. In his second season (the 2008 season), Rice finished 10-3, tied for 1st in the Conference USA West division, and went to their first bowl game in 47 years, but things went downhill from there. The 2015 season was rough, with a 5-7 record, and 2016 has already started with a whimper (or maybe a groan). They lost their first game 14-46 against the Western Kentucky Hilltoppers.
How can you possibly compare this to a Texas business? You need to find one that most people have never heard of, and doesn’t really do all that well, except for the occasional fluke flash-in-a-pan. It would be best to come up with a business that it still operating, but that’s simply too hard.
Digital Convergence Corporation was a business formed in Dallas in 1988 by Dave Mathews (no not that Dave Matthews). The idea was to use a small handheld device (the CueCat) that could direct users to more information about a topic, product, etc. using tones from a TV or symbols on a page. It was a huge commercial failure. The company burned through $185 million before mercifully going the way of the dodo.
The CueCat made huge news first when it came out because it was being touted by many major media companies, and then again because of its spectacular failure. Similarly, Rice made a bit of news in 2008 and then pretty much failed.