What will happen to Big 12 cities when Texas, OU leave? They could lose millions, analysis finds
Bob SechlerAustin American-Statesman
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It is anyone's guess how the University of Texas and the University of Oklahoma will fare on the field when they make the jump to the Southeastern Conference, but — financially at least — the losers are already clear: communities that are home to the Big 12 conference schools left behind.
According to an analysis published this week, the three remaining Texas cities with universities that compete in the Big 12 — Waco, Lubbock and Fort Worth — stand to lose an estimated $400 million to $570 million combined in annual economic benefits and about 5,300 to 7,600 jobs when UT and OU exit the conference.
The study was conducted by the Perryman Group, an economic research and analysis firm based in Waco — where Baylor University, one of the Big 12 schools, is located. The study assessed anticipated declines in visitor spending around game days stemming from the exit of the two highest-profile Big 12 universities, as well as reduced revenue from athletics and other factors.
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Lubbock is home to Texas Tech University, while Fort Worth is home to Texas Christian University. The Big 12 also includes schools in Kansas, Iowa and West Virginia.
On Friday, both UT and OU accepted formal invitations to join the Southeastern Conference, although it's uncertain when they will do so.
The impact of UT's move isn't merely an academic question in Texas, with some politicians complaining about the negative ramifications for regions they represent. In response, Lt. Gov. Dan Patrick recently named a new panel — called the Senate Select Committee on the Future of College Sports in Texas — to examine the issue, including the economic fallout.
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Ray Perryman, president of the Perryman Group, said Friday that he was invited to testify at the committee's first meeting, which is scheduled for Monday, but he has declined because of a scheduling conflict.
For the Austin area, his report notes that UT's move to the SEC "undoubtedly" will fuel financial benefits, but it didn't attempt to quantify them.
Perryman, a Baylor alumnus and former faculty member, told the American-Statesman that he conducted the study for free after being contacted by people associated with Baylor, Texas Tech and TCU.
The report "only focused on the eight communities (including the three in Texas) that would remain in the Big 12 following the exit" of UT and OU, he said. "We did not separately evaluate Austin or Norman (where OU is located). Thus, I don't have any definitive numbers" for them.
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But he said Austin is likely to see economic gains attributable to more national media exposure in the SEC and potentially higher attendance and hoopla for UT home games.
"The sheer size, strength and nature of the Austin economy compared to most of the other communities in the Big 12, however, will make (the gains) less noticeable on a macro level," Perryman said.
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Still, Austin-based economist Matt Patton said it's possible the economic benefits for the state overall when UT moves to the SEC might end up outweighing the combined financial blow to the cities whose schools are being left behind.
Patton works for Angelou Economics, which conducted a 2015 analysis for UT on the economic impact of its athletics department.
The move by UT to the SEC will rekindle traditional rivalry games with Texas A&M University, Patton said, and it probably will result in more out-of-state visitors for UT home games overall because SEC teams are known for having fervent fans who like to travel.
In addition, he said, the annual UT-OU rivalry game that's played in Dallas will remain but might take on even more national prominence in the SEC.
Adjusted for inflation over the past six years, the 2015 report by Angelou Economics pegs the economic impact of UT football on the Austin-area economy at about $70 million every home-game weekend. Patton said the figure is likely to be larger if UT plays a higher number of ranked SEC teams.
“Certainly, places like Lubbock and Fort Worth and Waco would feel (negative) impacts" when UT leaves the Big 12, Patton said.
"But the way we see it, what is going to be good for the University of Texas is going to be good for the state of Texas," he said.
Perryman's study pegged the total annual financial blow to the remaining Big 12 communities — including those that are home to the out-of-state schools — when UT and OU leave at an estimated $940 million to $1.3 billion combined, and the loss of jobs at about 12,600 to more than 18,000.
The lower figures will result if the Big 12 remains largely intact after UT and OU exit, according to the analysis, while the larger figures are more likely if the conference breaks up and the various schools are forced to join other leagues.
"Without Texas and OU, the rest of the (Big 12) conference is undoubtedly facing smaller television deals, lower attendance, and other negative consequences," the study says. "The result would be reductions in athletic revenue, tourism, and economic benefits for affected communities."
