SMU's $350 million gamble

D Magazine, Jan 01, 1998

SMU WAS ONCE THE COLLEGE OF CHOICE for Dallas, the small school that served a small city. But as the city grew, Dallas and SMU grew apart. The campus in the heart of the city seemed far removed from it. Until now. Until SMU launched a new claim to be the university Dallas needs. Until the school launched a major fund-raising campaign. Until the Dallas business community began to buzz about SMU's aspirations. Invited by SMU, D Magazine sought an explanation: What has been the turnabout in attitude at SMU? And what does it mean for the future of the city?

THE CRISIS: Seeking a new leader

ON JUNE 18, 1994, SMU PRESIDENT A. KENNETH PYE, troubled by a cough that wouldn't go away, went to his doctor expecting a prescription and a handshake. Instead, he was met at the door by a team of five physicians. They told him he had cancer--again.

Less than a year earlier, Pye had undergone surgery for esophageal cancer, and because it was detected so early, his chances for recovery were favorable. This newly discovered cancer, unrelated to the one found in his esophagus, had spread through his liver and kidneys. The prognosis this time was terminal. His death was imminent.

Oilman Ray Hunt was in Ireland when he checked with his office. Pye had left a concise message and asked Hunt to call him as soon as possible. When they spoke, Pye gave Hunt the full report, calmly repeating facts that he had received from the doctors the day before.

Hunt returned from overseas the next day-a Sunday-and went to Pye's house. They met first and foremost as friends, not as university president and trustee. Hunt, after all, had recruited Pye in the dark days of the late '80s, after athletic sanctions had sullied SMU's reputation. Together they had battled to pull the university together, developing what Hunt calls a "foxhole in Europe" kind of relationship, referencing the bonds between WWII soldiers.

Hunt and the new board came to revere Pye. He had worked tirelessly to re-establish the integrity of the university, both in academics and in athletics. Pye began diversifying the reputedly elitist institution and raised new money for endowments and financial aid. He burnished SMU's tarnished image nationally. Perhaps most important, he resolved internal problems that had stymied the university's development. With the help of Hunt and others, he halved the board's size and increased its effectiveness. The good old boys who had misunderstood and mismanaged the university for decades were out--for good.

That Sunday at Pye's house, Hunt and Pye were later joined by Bob Dedman, who had succeeded Hunt as the new board chairman. The three of them hashed through as much information they could in as little time as possible. Hunt and Dedman wanted to relieve Pye of all responsibilities so that he could concentrate on his family, on the things that mattered. Pye would be dead less than a month later.

Dedman and Hunt began the urgent process of notifying the school's officers and board members of Pye's prognosis. Pye's major anxiety was who could succeed him. The two promised to make that their top priority. Late that same night, at 11 p.m., Hunt tracked down trustee Jerry Junkins, who was in Washington, D.C., and asked him to chair the search committee. Hunt didn't want to do it himself, because he had been instrumental in recruiting Pye, and the new situation called for a wholly new approach.

Junkins had to think about it overnight. His plate was already full. Being the CEO of Texas Instruments isn't exactly a parttime job. Besides, he was leading TI through a comeback of its own. On the other hand, Junkins was chairman of a company cofounded by the legendary Erik Jonsson, the Jonsson who extolled education, the Jonsson who proclaimed the importance of the intellect to a city, the Jonsson who personally funded countless educational ventures. Even though the timing was terrible, Junkins agreed to chair the committee. Hunt spent a Saturday afternoon with him, explained how he went about the search for Pye, but encouraged Junkins to go about it his own way.

Hunt did suggest the services of education headhunter Bill Funk. Pye had considered Funk not only the best academic recruiter in the nation but also a friend. The two had developed their relationship over the years as Pye had contacted Funk for assistance on searches at SMU, and Funk contacted Pye for advice on searches done elsewhere. Funk remembers fondly 15-minute consultations turning into two-hour conversations.

A couple of years before SMU's new search began, R. Gerald Turner, then chancellor of the University of Mississippi, was in Dallas for an NCAA governance committee meeting, and he and Funk had arranged to get together. Funk had previously tried to recruit Turner for three or four other positions, but Turner had turned him down. Turner's turnaround of Ole Miss had sparked considerable notice, and as a university presidential candidate, he was hot property.

In person, Turner impressed Funk even more. He was youthful and bright, charismatic and outgoing. Funk again tried to court Turner to relocate, but Turner said he wouldn't consider any change until his youngest daughter graduated from high school in Mississippi. The Texas-born educator did tell Funk, however, that he would be interested in someday doing something in Texas.