Grand Canyon makes a lot of money and is ready to make a lot of noise

Is Grand Canyon the next Gonzaga? (0:51)

Grand Canyon University has begun to make serious noise in college basketball as it pushes towards its first trip to the NCAA tournament. (0:51)

PHOENIX -- As he shuffles around the new NBA-like practice facility stashed next to his home arena, Phoenix Suns legend "Thunder" Dan Majerle is soft-spoken yet instructive in a quick Sunday afternoon practice in December. Twenty years ago, he was nearing the conclusion of a 14-year NBA career that included three All-Star Games and two appearances on the league's all-defensive team.

Today, he wobbles on the sideline with worn knees as the head coach at Grand Canyon University, a private Christian college and Division I basketball's only for-profit institution. Majerle is enjoying his team's first season of eligibility for the NCAA tournament after a lengthy transition period to the Division I level that started in 2013.

"I've grown up wanting to be in the NCAA tournament," said Joshua Braun, the WAC's preseason player of the year. "That'd be sweet to be a part of history and do that."

Braun, a Phoenix native and Majerle's first recruit, remembers when the school's basketball teams practiced in a small, dark gym cooled by portable air conditioners in the summer.

Grand Canyon University's team, the most popular squad on a modern, sprawling campus, is the school's beacon to the world and proof of its remarkable turnaround.

In 2004, a group of local investors rescued the university when it had just 900 students on a crumbling campus and paid off its $20 million debt load. To repay the investors and regain its footing, the school turned to Wall Street and shed its nonprofit status. Grand Canyon now has the only college basketball program affiliated with a for-profit school.

GCU has endured the stigma often attached to for-profit schools. Recent federal crackdowns magnified the negative image of for-profit institutions, which are often cast as shady degree mills that attract financially strapped students who qualify for sizable federal loans but fail to receive adequate educational experiences.

More than 19,000 students attend the GCU campus, and another 70,000 students pursue degrees online, which creates a fruitful revenue stream -- the school generated $218 million in the second quarter of 2017 alone, $4 million more than professional wrestling giant WWE's earnings in the same period -- for a school that earns 79 percent of its revenue from federal student financial aid, per azcentral.com. But it comes with a cost.

GCU topped all landowners in the city of Phoenix last year with its $9.2 million property tax bill, a number school officials say is unsustainable and will require a switch from for-profit to nonprofit status to reduce that burden. This will be the second time in three years that GCU has tried to eliminate the property tax burden. The school was rejected the first time.

"The for-profit model suggests that the only thing that matters is the bottom line, and that works against the idea of an institution that serves society," said Kevin Kinser, an expert on for-profit schools and the chair of the education policy studies department at Penn State.

But GCU's men's basketball program -- the school spent $4.3 million on the sport last year -- is thriving amid the controversy surrounding the school's explosive, unconventional financial boom over the past decade and the sudden immersion into Division I athletics that followed.

The Antelopes use a five-star practice facility that features three courts, offices for men's and women's basketball, a lounge for each team and a film room. Majerle can watch practice from the second-floor balcony outside his office.

Some high-majors fought for years to finance comparable luxuries. But GCU opened its practice facility in 2017, four years into its Division I transition. In 2014, Grand Canyon Arena, the team's home facility that includes a three-ton, high-definition video board, temporarily shut down to add 2,000 seats as part of a multimillion-dollar investment in the school's most visible sport.

The facilities have enhanced recruiting at GCU.

Four-star recruit Tim Finke rejected offers from Northwestern, Creighton, Notre Dame, Illinois and USC and committed to Grand Canyon in November. Casey Benson, a grad transfer who played in the Final Four with Oregon last season, is averaging 9.6 PPG and 5.0 APG this season.

The WAC squad is ranked within the top 50 in adjusted defensive efficiency, per ESPN Stats & Information, and started the month with the nation's top 3-point defense (26.8 percent). If the Antelopes seize the conference tournament title, they will elevate the program's national profile during the team's first trip to the NCAA tournament.

"If we don't make the tournament this year, is it a complete failure? No," Majerle said. "Because we're still building something really good. Our ultimate goal is to be a top-25 team, to be the next Gonzaga or a Butler, to be the next mid-major. And we have all the tools to do that."

MIKE VAUGHT WANTS to get the golf cart.

That's the only way, the school's athletic director stresses, to see the Grand Canyon campus and the footprint of what it will become.

In the on-campus museum that honors Jerry Colangelo -- the former Phoenix Suns and Arizona Diamondbacks owner who helped elevate GCU's athletic programs with his investment and name -- Vaught points to pictures of a fluid outline.

The school owns enough vacant lots to double the size of its 260-acre campus, a Fantasyland fortress in the downtrodden west Phoenix area, in the coming years. In 2016, nearly 40 percent of the population in GCU's 85017 ZIP code lived in poverty, nearly triple the country's overall poverty rate (14.7 percent) in the same year, per the U.S. Census Bureau.

But GCU has a hotel, two restaurants and its own 177-officer police force. Last year's dorms seem like relics now, with multiple new dwellings under construction. The growing institution will have 23 dorms next year for its diverse student population; nearly 50 percent of the students at GCU are minorities.

The administrative offices feature a large balcony overlooking a fresh soccer stadium. In 2018, Grand Canyon will complete and unveil its 10th athletic facility since 2016, part of the $200 million "10 in 2" initiative.

In men's basketball, the team records regular sellouts, with support from students who occupy half the 7,000-seat arena each night. Roy Williams and North Carolina used GCU's practice facility to prepare for their run to the national championship in Glendale, Arizona, last season.

"It's a facilities battle in recruiting now," Vaught said. "And for a mid-major, we have it as good as anybody."

School officials tout GCU's affordability and frozen tuition rates, which haven't changed in a decade. The school was ranked second on Forbes' Best Small Companies in America list in 2013.

Last month, shares of Grand Canyon Education Inc. (LOPE) traded at $93.63 -- up from $12.35 in 2008 -- on the Nasdaq. In 2016, Grand Canyon Education Inc. reported a net revenue of $873.3 million, nearly $30 million more than the net revenue of the Dallas Cowboys in the same year, per Forbes.com.

Large public and nonprofit universities with endowments and lucrative football programs trump GCU's numbers tenfold. Per its school website, Ohio State generated $7.1 billion in total revenue in the current fiscal year. But GCU is a business, too. In 2017, the school took home more cash than the $800 million the Girl Scouts make each year off of cookie sales.

GCU spends just $2 million less than Pac-12 member Arizona State applies to its men's basketball program.

Colangelo, who helped the school transition to Division I athletics, touted GCU's financial potential when he called Majerle -- the former Phoenix Suns assistant whom he drafted from Central Michigan in 1988 -- five years ago. The Suns had fired Majerle's boss, Alvin Gentry, and would soon overhaul the staff, but Majerle wanted to stay in the city. He also wanted a head-coaching job.

That's why GCU made sense.

"I wanted to be a head coach," Majerle said. "I was coaching with the Suns. That didn't work out. Mr. Colangelo called. As anyone knows, Mr. Colangelo calls you, you take the call. I would have been a fool not to take it. It's right down the street from where I live."

"If we don't make the tournament this year, is it a complete failure? No. Because we're still building something really good. Our ultimate goal is to be a top-25 team, to be the next Gonzaga or a Butler; to be the next mid-major. And we have all the tools to do that." GCU coach Dan Majerle

He won 81 games in his first four years at GCU.

But even Majerle's name and reputation could not protect his program and school from controversy. In 2012, a federal study revealed that half the students who enrolled at for-profit institutions during the 2008-09 school year had withdrawn from their respective colleges within two years. The Obama administration blocked for-profit giant ITT Educational Services from enrolling new students with federal financial aid in 2016.

Grand Canyon has promoted itself as the exception within the for-profit market. Eight years ago, however, the school settled a whistleblower lawsuit for $5.2 million after a former employee alleged that the institution had turned its marketing process into an illegal, incentivized money grab for recruiters who could lure the most students.

That drama followed the school when it announced its plans to shed its Division II affiliation and move up. In 2013, the Pac-12 tried to stall GCU's admission to the Division I ranks.

"As a Conference -- together with our Presidents -- we believe that a broader level of discussion is needed before the final decision on whether to grant for-profit institutions membership in NCAA Division I," the league's 2013 statement read. "Our major concern is how athletics fit within the academic missions of for-profit universities."

Arizona State, a school just 16 miles from GCU's campus, questioned the school's allegiance in a separate statement that year.

"We cannot play teams that exist for profit and have them use their games against us to advance their stock prices, as was discussed by Grand Canyon University during a recent telephone call with investors," the school's statement read.

The feud between Grand Canyon president Brian Mueller and ASU president Michael Crow -- the Sun Devils refuse to play the Antelopes in any sport -- still percolates.

At a news conference last year, Crow falsely claimed that 11 of the 12 Pac-12 schools will not play Grand Canyon due to its for-profit model. He also said GCU wants to face Pac-12 schools only for exposure via the conference's national TV network.

But Grand Canyon has faced 10 of the 12 schools in the Pac-12, albeit just two (Utah and Arizona) in men's basketball, within the 21 Division I sports it supports since it began its Division I journey five years ago.

"We will not tolerate these repeated public attacks from ASU's president that are insulting to the reputation of our institution and the tremendous accomplishments of our students, faculty, staff and alumni," GCU's Mueller said in a response to Crow.

Last month, a Pac-12 spokesman told ESPN.com: "There is no conference policy with respect to playing against other universities."

GCU's fight to tell its story and dismiss the negativity surrounding the for-profit industry, however, continues. But those who believe in the mission on this lush campus plan to go out swinging as they preach their message to the doubters: Come see us before you judge us.

"There are good players and bad players on both sides," Mueller said. "There are some not-for-profit universities that have had huge problems around their football programs. It's the funding model. We have a different funding model, but that should have nothing to do with evaluating the university."

HE'S NOT SURE IF THE TEAM will get the usual turnout for GCU's December matchup against North Carolina Central.

"We have finals this week," team spokesman Charles Hampton said, "so we might not fill it up."

The following day, however, hundreds of students stand outside Grand Canyon Arena in a line that snakes through the campus.

Known as the "Havocs," the rowdy GCU fans fill half the arena for each game. Against North Carolina Central, they dress for the night's Christmas theme.

A shirtless Gen Zer with a Christmas tree painted on his chest and face leads the cheers. Two guys in the third row wear Santa-themed lace nightgowns. Another is dressed as a candy cane. They're all crowd-surfing an inflatable Rudolph the Red-Nosed Reindeer.

Before every home game, scores of fans dance together in coordinated routines under strobe lights as techno music blasts throughout the building at the "Purple Pre-Game Party."

This is not a college basketball game. It's a Miami nightclub in the desert.

"This is crazy," NCCU coach LeVelle Moton said as he admired the crowd.

When his team escaped with a 79-70 win last season, former Louisville coach Rick Pitino called GCU one of America's toughest environments for an opposing team. Colangelo, his friend, convinced him to come to Phoenix and face the Antelopes.

"Whether we go to Duke or Kentucky, nothing will be as tough an environment as this," Pitino said. The school's backers point to this moment to justify their decision to turn to investors in 2004. They had few options, they say. Private schools can't seek state funding, but for GCU, its investors kept the college alive. The decision led to an uncanny infrastructure build-up most Power 5 programs can't match. A blossoming basketball program and off-the-wall fan base followed.

Yes, GCU is different, but Ohio State, Alabama and USC can all turn to their money spouts whenever they desire upgrades and new facilities, too. Grand Canyon University is a former underdog competing in the Division I arms race -- that's what the school's supporters tell you when you visit.

"We're raising money through online education, and it's very solid and paying for everything that you see without any help from the government," Colangelo said. "It's really a great model. This thing is being run like any other major university, except this school is paying its own way."

But the school's supporters also know that the for-profit cloud will never enhance its image.

Last month, GCU reapplied for nonprofit status -- three years after the Higher Learning Commission rejected its first attempt -- in hopes of shaking its polarizing image for good. Nonprofit status would open the school to more donors and grants while reducing its massive property tax burden. It would also help the school's athletic programs avoid the shadow tied to their resurgence.

But it won't change how Majerle, who says recruits never ask about the school's for-profit model, operates.

Against NCCU, he was focused on basketball and helping his team secure another victory and momentum toward potential history.

Once the game against NCCU had ended, GCU staffers directed fans in a nearby parking ramp toward an exit at the back of the campus. On the way out, people drove along gravel roads next to vacant lots encircled by temporary fencing. Then another vacant lot appeared, filled with bulldozers and cranes. And another after that.

For about a half-mile, it seems, you can see only cleared land and dust -- the blank pages of the school's future -- as the burgeoning GCU profile fades behind you.

"This is a normal campus," Majerle said. "The only thing that's not normal about this campus is there's a pool in every dorm. We're just like any other university out there."