Potential Economic Consequences of Texas and OU Leaving the Big 12 Conference

Published on July 28, 2021
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The University of Texas and The University of Oklahoma recently announced that they would soon be leaving the Big 12 Conference to join the Southeastern Conference. Without Texas and OU, the rest of the conference is undoubtedly facing smaller television deals, lower attendance, and other negative consequences. The result would be reductions in athletic revenue, tourism, and economic benefits for affected communities.

The Perryman Group looked at two representative scenarios. In Scenario 1, the Big 12 Conference remains largely intact with the remaining eight teams (and potentially expands), with television revenues and attendance patterns similar to those in the American Athletic Conference (adjusted for specific characteristics of the individual schools). Scenario 2 assumes the Big 12 Conference is not maintained and individual schools must seek opportunities elsewhere, with ultimate performance mirroring the five most successful athletic programs in the Mountain West Conference (the next most successful league following the American Athletic Conference) adjusted for specific characteristics of the individual schools.

For the communities across the Big 12 Conference, the realignment could be expected to cause losses of $938.9 million in annual gross product and 12,623 jobs under Scenario 1, with $1.3 billion in annual gross product and 18,063 jobs for Scenario 2.

Looking specifically at the Texas universities, if Texas joins the SEC, there will undoubtedly be benefits for the university and the Austin area. However, the Waco, Lubbock, and Fort Worth areas would face negative economic consequences due to effects on Baylor University, Texas Tech University, and Texas Christian University. Total annual losses for these three communities were found to include $397.7 million in annual gross product and 5,322 jobs under Scenario 1 and $569.1 million in annual gross product and 7,615 jobs under Scenario 2 (including multiplier effects).

College athletics is changing and it is understandable and even inevitable that schools will respond. At the same time, the consequences for other universities and how those might be mitigated is worthy of consideration.

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