Sometimes it really is darkest before the dawn!! Such was the case with the recent announcement that the Big 12 will continue to exist (though possibly with only 10 universities) and likely even prosper more than in the past despite a flurry of activity and numerous pronouncements of its demise.
The positive economic effects of college athletics stem from ticket sales and visitor spending as well as hosting games. Schools in premier conferences also realize notable benefits such as national exposure and lucrative media contracts.
In recent days, predictions of the death of the Big 12 conference were rampant, and funeral plans were reluctantly being considered. Fortunately, thanks to the leadership and personal involvement of state legislators, university administrators, regents, coaches, donors, friends, and alumni from numerous institutions, as well as league officials, such arrangements are no longer necessary.
Although full details have yet to be finalized, it appears that the new 10-team Big 12 alignment will prove financially beneficial to all participants and significantly enhance the economy of the State of Texas. It will be a couple of seasons before the conference gets its fresh look, but when it does, the $11.58 million each school is expected to receive for the 2009-2010 academic year from TV revenue will be eclipsed by the projected $17 million Big 12 participants will be awarded beginning in 2012. In addition to that amount, each university is allowed to set up its own TV network to reap even greater financial remuneration.
College sporting events bring millions of people together every year to watch and support their teams. In the case of the Big 12, with four of its 10 members in Texas (University of Texas at Austin, Texas A&M, Texas Tech, and Baylor), the impact on local and state economies of home games is quite substantial, especially in the travel, hospitality, and restaurant sectors.
Besides season games, major games such as bowl games or basketball’s Sweet Sixteen or Elite Eight produce notable local economic stimulus and major television exposure for participating schools. A greater number of Texas teams participating in any conference preserves high-impact, in-state rivalries and will give Texas a better chance of hosting large sporting events which lead to tens of millions of dollars in economic impact. Under almost any scenario that was being contemplated, Texas would have lost (1) at least one representative in a major conference (and the corresponding revenues), (2) several high-profile games within the state, and (3) prospects for post-season events.
Keeping the Big 12 alive will enable member schools to still reap significant benefits from television exposure throughout the year in terms of recognition, prestige, student recruitment, and funds available for athletic programs. In addition to benefits to university athletic budgets, participation in premier NCAA Football Bowl Subdivision (FBC) conferences, of which the Big 12 plays a major role, furthers the reputation and academic competitiveness of participating schools.
Member schools of athletic conferences often collaborate in myriad academic ventures through voluntary consortiums. Faculty and student association with other Big 12 members seriously enrich opportunities to build broad communities, share knowledge and resources, and positively impact educational and research ambitions of all universities involved.
It is fortunate that the Big 12 will continue, especially for the remaining schools and for the Texas economy. My firm looked at the potential net annual losses to Texas if what was deemed the most likely scenario at one point in the process had indeed occurred. We found substantial negative effects as the balance shifted adversely for Texas representation relative to other states and programs were relegated to less prestigious status. In fact, we estimated that Texas could lose $714 million in annual total spending in the economy, nearly $372 million in annual output (gross product), and 5,764 full-time equivalent jobs. In addition, the State government would lose more than $19 million in tax revenue each year associated with this foregone economic activity.
While there is still some uncertainty as to the exact structure of the Big 12 going forward, it is clear that the presence of four schools in a premier conference is important to Texas’ ability to capitalize on the potential economic stimulus of college athletics and to reap other benefits as well. I like it when a plan comes together, even at the last minute.