How Florida cashed in on college football

College sports are a bigger business than they've ever been. Here's how the Florida program became this industry's most admired corporation.

By Brian O'Keefe, Fortune senior editor

(Fortune Magazine) -- Things are heating up at the Swamp. That's what they call their stadium down here in Gainesville, Fla. And the University of Florida Gators football team - defending national champs - hasn't lost a game on its home turf in more than two years.

On this sultry September evening, Florida hopes to avenge its only loss last season by routing the Auburn Tigers the same way they crushed the Tennessee Vols a couple weeks earlier. Very soon, 90,000 screaming fans will turn the stadium into an orange-and-blue thunderdome. But now it's time for the Gator Walk.

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Lemerand (in front with his fiancee, Jill) was never a Florida student. Yet he's one of the most generous boosters in school history.
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Hjalma Johnson is a classic example of Gator Booster eccentricity.
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Stumpy Harris, a Gator Boosters distinguished director, in his orange and blue MG Midget.
Power Players
Largest college athletic department budgets, by revenue.*
1. Ohio State University
$104.7 million
2. University of Texas
$97.8 million**
3. University of Virginia
$92.7 million
4. University of Michigan
$85.5 million
5. University of Florida
$82.4 million
6. University of Georgia
$79.2 million
7. University of Wisconsin
$78.9 million
8. University of Notre Dame
$78.2 million
9. Texas A&M University
$70.9 million**
10. Penn State University
$70.5 million
*Year ended June 30, 2006; **Year ended August 31, 2006.

Hundreds of Florida faithful are in a face-painted frenzy as the suit-and-tie-clad players slowly make their way, single-file, from buses parked on University Avenue to an entrance behind the Swamp's north end zone. Meanwhile, from a second-story office attached to the stadium, a handful of older men and women observe the scene in air-conditioned comfort. And although they may be more reserved than their fellow fans outside, they're every bit as passionate. In fact they couldn't be more invested in the team's success.

"Step up here and get a good look at our boys," says Ben Hill Griffin III, motioning me to the window. Griffin, 65, is a second-generation citrus and cattle baron who favors ostrich-skin boots. His father's $20 million in donations to the university in the 1980s made his family name synonymous with Gator athletics (the Swamp's official name is Ben Hill Griffin Stadium at Florida Field) and kicked off an era of major giving among Florida boosters.

Griffin III recently gave $2 million to help triple the size of the weight room his father built for the school - a.k.a. the Ben Hill Griffin Training Center.

Griffin and the other seven-figure donors in the room - the lawyer who funded a new soccer stadium; the hospital honcho who bankrolled the baseball complex; the gas-station mogul who paid for the aquatic center - are "distinguished directors" of the Gator Boosters, a private foundation that raises money for the University of Florida athletic department and likes to call itself "the team behind the teams."

At the moment, no group of check-writing, scholarship-endowing, luxury-suite-leasing superfans in college sports is getting a better return on its investment.

First, there's that national championship ring in football. (Heavy-duty boosters are awarded a ring just like the players get - except theirs have actual diamonds, not the cubic zirconium in the players', and are worth $18,000.) Then there's the back-to-back national championships won by the men's basketball team in the past two years. (Two more rings: another $36,000.)

And for fans keeping track of the 18 other "non-revenue-producing" sports - as at most schools, only football and, to a much lesser degree, men's basketball are the moneymakers - there's plenty to be excited about: Florida is one of only two schools in the nation to finish in the top ten of the NCAA's "all-sports" competition for the past 24 years. (UCLA is the other.)

Simply put, Florida is the most successful major sports program in the country. Before the Gators did it, no school had ever held NCAA titles in football and men's basketball at the same time. That doesn't happen without gobs of money, and thanks to the Gator Boosters, Florida has plenty. In 2006 the school's athletic department took in $82.4 million in revenue - that's No.1 one in the SEC and No. 5 in the country. It may be a hoary cliché to say that college sports is big business, but it's truer than ever.

Full disclosure: I am an Alabama fan, born and raised. Among other attributes, that implies a predisposition to disdain Florida - and Tennessee, LSU, Auburn (especially Auburn), and the rest of the SEC, the conference with the most rabidly partisan fan base. But my job requires the analysis of successful enterprises. So I waded into the Swamp to meet the people who have done a depressingly fine job of getting the Gators to the top. And it pains me to say this, but they're the shrewdest, best-organized, most enthusiastic, and (shudder) most charming bunch of unofficial sports executives you'd ever hope to meet.

Stumpy Harris and I are turning heads. We're cruising through campus in his customized orange-and-blue 1952 MG Midget, the Gator fight song blaring from the speakers. The blonde in an orange-and-blue bikini top gives us a Gator chop (straight-armed, vertical clapping motion). The dorky freshman in an orange-and-blue fright wig lets out a "Yeah, Gators!" The couple wearing Auburn hats turns to frown. "It's like our own private parade," says Harris, taking a puff from his cigar.

Gordon Harris comes by his nickname honestly: He's 5 feet 3 1/2 inches and about 190 pounds. But if there's a bigger Gator fan than him out there somewhere, I'd like to meet him. So would Stumpy. And then he'd find a way to take his support up a few more notches. "I do my fanship at a national championship level every year," he says.

This 69-year-old citizen of Gator Nation is in full game-day attire: Florida shoes, socks, khakis, and shirt. Accessories: blue gator-skin wallet; eyeglasses with gold gators on the stems; a blue hat signed by both the head football coach, Urban Meyer, and the head basketball coach, Billy Donovan; and, of course, his championship rings. He got his first football season ticket as a freshman in 1956 and now controls 48 seats, most of them in his luxury box.

It's not clear how he finds the time, but Harris does maintain a career as one of Florida's top eminent-domain lawyers. He says the benefit to his law practice of being the No. 1 Gator fan is hard to track, but he's confident it helps: "This morning a guy told me, 'I Googled you and decided you're the man for me on this case. My two sons are at the University of Florida.'"

Stumpy served as national alumni association president in 1981 and has become a big fundraiser over the years. His main project these days is trying to increase the endowment of the athletic department, which is already an impressive $42 million. But he figures that if he could get that number to $175 million, the department could permanently endow every scholarship for every sport. And he'd be glad to tell you about his three-pillar plan to get there.

The Gators need Stumpy-like forward thinking, because the cost of staying on top will only rise. First, there's the war for talent. As athletic director Jeremy Foley says, "Coaches make it all happen in college athletics." He hired Urban Meyer three years ago for about $2 million a year.

But to reward Meyer for last winter's national championship and keep up with the market, Florida just gave him a new deal worth $3.25 million annually. Ditto for basketball coach Billy Donovan, who got a raise from $1.7 million to $3.5 million after he first agreed to and then walked away from an even more lucrative NBA job. Foley himself is the highest paid A.D. in the U.S. - up to $1.2 million a year including bonuses.

But the really mind-blowing dollars in college sports are going into a facilities-building boom. According to the Chronicle of Higher Education, from 2002 to 2007 schools in the nation's six premier athletic conferences raised at least $3.9 billion for stadium expansions, new practice facilities, and such.

In many cases it's the powerhouses expanding to ensure their dominance, such as the $226 million stadium renovation planned at Michigan. Or it's a striver like Oklahoma State putting to use the $165 million pledge by billionaire OSU alumnus T. Boone Pickens. In all cases, it is the schools' boosters who are footing most of the bill.

As is the case at many schools with competitive Division I sports programs, Florida's athletic department is organized as a separate not-for-profit foundation, with its own budget. But unlike all but 20 or so of its peers nationwide, Florida's athletic department operated in the black last year. In fact, during the past 17 years, the athletic department has donated some $40 million to the university, $6 million of that this year alone.

Also unlike some other high-profile programs, Florida has never had a Boone Pickens-level sugar daddy. Rather, the school is relying on its unusually well-organized army of high-earning alumni, the Gator Boosters. More than a third of the athletic department's revenue - $38 million in 2007 - comes from these folks. And most of that money comes from annual dues collected from the group's 13,000-plus members. Entry-level dues are just $50 per year, if you just want to call yourself a booster.

But if you want good tickets, you need to be a Bull Gator, which means at least $12,000 annually. (Soon to be $15,000.) There are now 892 Bull Gators, up from about 600 three years ago. But even Bull Gatorhood isn't enough to guarantee a full ticket package to new members - there just aren't enough tickets to go around. So the Gator Boosters have gotten creative. One popular perk: Standing on the field as the football players run out into the Swamp.

Stumpy, of course, makes his own access. Two years ago he invited legendary Gator (and Dallas Cowboy) Emmitt Smith to stop by his luxury suite for the Homecoming game. Emmitt did, and other former greats joined in - Neal Anderson, Eric Rhett, Heisman Trophy winner Danny Wuerrfel. "My wife says, 'I've never been sure about all the money you give to the university. But seeing you talk to those guys here in our box makes it all worth it.'"

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.