Senate Select Committee on the Future of College Sports in Texas – August 2, 2021

The Senate Select Committee on the Future of College Sports met on August 2 to hear from the Big 12, Baylor, TCU, Texas Tech, and UT Austin concerning UT Austin’s move to the SEC.

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Comments

• Chair Nelson – Have been given the charge of studying economic & athletic impact of UT leaving the Big 12
• Landscape of college sports has shifted more in the last 4 weeks than the last 4 decades, changes will impact institutions, student athletics, budgets, & college football experience
• Passion runs deep in TX, intent is to have fair, unbiased, constructive hearing
• Sen. Creighton – Highlights issues surrounding sports, incl. likeness court decisions, falling viewership
• Sen. Whitmire – Could’ve heard from University of Houston as an expert witness on what happens when some universities abandon others
• Sen. Nelson – Have heard some concerns about who was invited, may be opportunity later
• Sen. Whitmire – Could have invited A&M
• Nelson – I did invite A&M, but they declined
• Whitmire – They saw that the train left the station
• Sen. Powell – TCU is in SD 10, issue is important to me; equally concerned about baseball, basketball, track, etc., concerned about Title IX sports
• Sen. Hinojosa – Seems like institutions are making decisions based on money rather than wellbeing of Texas; interested in hearing about impact to others
• Rep. Burrows – Will be an economic impact on Lubbock area and Texas Tech, look forward to hearing if we’re heading to super conference structure and impact on state; also looking forward to hearing if Texas deserves to only have 2 teams in power conferences and whether more should be done
• Sen. Kolkhorst – Concerned about impact on March Madness, if Abilene Christian would have the opportunity to play, if UoH has opportunity to make it to Final Four
• Sen. Perry – Did you ask for the AD from Texas to be here & he declined?
• Nelson – Yes
• Perry – Did you talk to anyone from the NCAA? Trustees from the schools?
• Nelson – Made conscious decision not to invite regents, wanted to keep this to a one-day meeting
• Perry – Economic impact is real, flagship may have sailed, but there is a process & doesn’t seem to be transparent, if not self-dealing and under the table; need to make sure these processes are not done in dark of night with no consideration
• Nelson – Was a big deal with Baylor in the past
• Whitmire – Don’t know why we have to assume negative impact, there could be a realignment with positive impact; no one needs to be punished for prudent business decisions
• Sen. Taylor – Timing is unfortunate, UT has a duty to the entire state; doesn’t only concern football, football is the revenue driver for most college sports programs
• Perry – Trustees do serve at Gov’s pleasure, must advocate for their university, but shouldn’t do this in a way that harms others
• Taylor – A&M is a state institution, curious why they chose not to come speak

 

Bernard Weinstein, Former Professor of Economics at SMU

• For vast majority of colleges and universities, UT leaving will have no impact; for 8 teams remaining there will be a large impact & concerns of losses due to departure
• Trend of professionalization of college sports will continue
• Not just about the measurable economic impacts, also about intangible benefits of community bonding, identity, and enjoyment
• Losing UT and OU to SEC does not spell doom for bigtime collegiate athletics, also not demise of Big 12; what matters is what comes next
• State’s 2 largest metropolitan areas don’t currently have teams playing in a major conference
• UT’s football program is not moving to another state, Austin’s economy will get a tremendous boost
• Future of Big 12 would be a lot brighter if it can expand fanbase in the largest metropolitan areas
• Haven’t studied, Ray Perryman says it is a $500m loss, Texas has a >$1.5 trillion economy
• Perry – Could you safely say a large part of the economy is due to O&G and ag?
  • Diverse economy
• Perry – If I’m a small community like Lubbock and $100m hits, wouldn’t that be a large impact?
  • Didn’t say there wouldn’t be an economic impact on communities, especially in the short term
• Whitmire – Thanks the professor for his common sense, may not be what people want to hear; could have a better, more exciting model coming out, UT isn’t moving to another state
• Hinojosa – Highlights possibility of $40 million possible loss/year due to TV contracts
  • Have heard reports, TV contracts are a big deal to the Big 12
  • No question that college sports is getting more and more focused on money
• Kolkhorst – Interesting to say Houston & Dallas don’t have power conference schools, but they have major pro teams; only so many entertainment dollars to go around, really talking about the competition for these dollars
  • I don’t think there is a fixed amount of entertainment dollars, wouldn’t see all these enfranchisers around the country in that case
  • TX is the second largest state, Houston & Dallas together have 15 million, would be easy to support power college teams
• Whitmire – Not only dollars, also competing on recruiting in certain areas
  • Way to keep Big 12 viable is to keep it focused on Texas with representation from major metropolitan areas of Texas
• Burrows – Correlation between being in a power conference and revenues, help marketing, branding, recruiting, etc.; if we keep with super conference model, there are barriers to entry beyond quality of football programs; is TX big enough to support more teams?
  • Yes
• Nelson – How much of an economic impact is correlated with having a headquarters in the state?
  • Big 12 rep is coming up, can answer that

 

Bob Bowlsby, Big 12

• Provides overview of Big 12 structure
• Awkward time in collegiate athletics, due to pandemic, etc., don’t know what policies will be
• 2 universities leaving have done so without notification to the Big 12 and with no explanation for reasoning
• Innate codependences in college athletics extend far beyond the field
• Beyond breach of trust, UT has violated bylaws they helped construct; Big 12 notified universities of the bylaws they have broken
• Media rights are shared among 10 members
• Skeptical about UT’s stated intentions to play with Big 12 until 2024-25
• Universities chose to ignore prior commitments and chose to undermine
• Nelson – Can you walk us through the cease & desist sent to ESPN?
  • We’ve agreed to not escalate this issue publicly; became aware that one or more conferences were meddling with our members and ESPN may have been involved
• Nelson – What are the options for how to proceed beyond 2025?
  • OU & UT participation in television agreement is likely 50% of value, at least $14 million per school without replacement
• Hinojosa – Realignments have happened and they do disrupt conferences
  • In the past, cable market was the primary concern, cable market is shrinking
• Hinojosa – Different conferences are finding ways to respond to viewers
  • Tech has evolved quickly, but funding has not evolved; broadcasters get revenue from those who don’t watch games, but in the future games will be a la cart
• Hinojosa – Revenue received by 5 conferences, Big 12 has the lowest
  • Not correct, we’re 3rd in revenue per member, $40 million per school next year
• Hinojosa – Was the Big 12 aggressive enough in changing the model knowing realignment was a possibility?
  • Had a 12 year agreement, runs 4 more years; typically new negotiations don’t take place until near the end of the contract
• Hinojosa – Seems to me that Big 12 was not aggressive enough in anticipating possibility of realignment, TV revenue was declining
• Hinojosa – Would you agree there would be an increase in revenue to UT for joining SEC?
  • Extrapolation of evidence, SEC revenue seems to be $45 million per member; higher than ours, but UT also receives $20 million from Longhorn Network
• Hinojosa – Football conferences don’t last forever
  • We’re the youngest for sure
• Hinojosa – Seems like some other conferences have been more aggressive in increasing teams joining the conference
  • Disagree with this assertion
• Hinojosa – Asks after SEC TV rights
  • Each conference is different, all delegate management of TV contracts to the commissioner’s office?
• Hinojosa – SEC has higher revenue than the Big 12?
  • Correct
• Taylor – How long has the Big 12 only had 10 teams?
  • 2 schools left in 2010, 2 left in 2011, 2 members were added in 2011
• Taylor – So we’ve been Big 12 even though we’ve only had 10 for a decade; have you tried to recruit more teams?
  • Went through open process to interview 18 teams, ultimately board decided not to expand; tried to be forthright
• Birdwell – Asks after autonomy conference definition, what other conferences are
  • Autonomy conferences are synonymous with power conferences, subdivision of Division I; can act on certain NCAA rules
• Birdwell – When did the Big 12 send notice of the media rights to member schools? My understanding is the 2 universities sought to explore their options now due to upcoming possible extension in 2025?
  • No such notice, we talk about these things all the time
• Birdwell – Changes the dynamics of the situation; no such notice that Big 12 was seeking to extend?
  • Only time we would’ve given such notice is if both sides of contract had agreed
• Birdwell – What would be the normal timeframe to extend?
  • Within the last year of the expiration of the contract
• Birdwell – If a member team said they didn’t want to participate at this time, when do schedules get written? What is the lead time you need for the conference?
  • Grant of rights is for a finite period that ends at end of 2024-25 school year
  • Also rely on bylaws that is mutually agreed upon doc that stipulate 18 months from agreed upon time, e.g. June 30 plus the 18 months
  • Also a 99 year commitment requiring 2 years of revenue to be relinquished upon departure from the conference
• Birdwell – What options are available to the remaining 8 schools? When and where is the decision point for each of the remaining schools?
  • No drop dead date
• Birdwell – What is the season of time with pressure to make decision?
  • Certainly at the end of the contract, would expect deal to be struck long before that, may be other unforeseen opportunities
  • 8 remaining seems to be the best approach in the near term
• Birdwell – Big 12 reviewed 18 teams for expanding membership, how long does this process take? Was told by leadership of universities that they wanted time to explore their options, but it took 10 days, did your decision take 10 days?
  • Longer than that, schools had to submit intention to join, legal documents had to be signed, expectation documents, typically brought in gradually
  • Roughly 8 weeks to 3 months
• Springer – Did the 18 schools present to the board?
  • Combination of staff, this would be preliminary process, board would make the decision
• Springer – ESPN contract provided for roughly same disbursement on expansion?
  • Originally in the contract, taken out for other considerations
• Springer – Was this taken out when the expansion did not happen?
  • Roughly concurrent
• Springer – Part of the question is if ESPN is getting to the size they can dictate to universities what they can and can’t do
  • One of the many ways we’ve tip-toed around UT and OU as they were not in favor of expanding
• Springer – Effect on 8 schools that remain would be $20-$30m?
  • No, television is around $28 million
• Springer – Does the Big 12 have a large amount of vendor or endorsement contracts?
  • Have a relationships with Littlefield, approx. $1.5 million
  • Budget pre-pandemic was about $29 million/year, distribute roughly 95%
• Springer – Have we seen a realignment that effected universities similar to this?
  • Others that have happened typically were not the top schools
• Perry – To be clear, there was no communications to the two schools opting to leave; when did you first know they were going to the SEC?
  • July 21
• Perry – So no indication at this point, no reason for them to say they received notice and then reconsidered options
  • We wouldn’t know today if it hadn’t been leaked to the media
• Perry – Truth is there was never any communication
  • We talk about TV rights publicly, but there was no communication asking for their grant of rights
• Perry – Were you aware of any discussion about a potential move prior to that day?
  • Not aware of anything prior to that day
• Perry – Notification narrative is a false narrative, correct?
  • Correct
• Perry – Did the Longhorn Network come up as a reason for the 4 previously exiting teams?
  • Not sure, wasn’t commissioner at the time
• Perry – Responsibility at the conference level; what were the reasons for the 18 teams not coming in?
  • Strong feeling we could overcome not having divisions, decided to implement post-season game matching best 2 teams
• Perry – If the teams buy out, do they get out? If they write the check for the TV revenue?
  • If they give notice and follow bylaws for 2 years of revenue, the grant of rights is still effective until 2024-25
• Perry – When would the conversation about other teams remaining take place?
  • Would be an action of the board, would need to decide to amend bylaws, each institution would be held to same standard as these 2 would be
• Birdwell – If the 8 remaining teams decide to vacate the Big 12, what are the financial obligations to the Big 12?
  • Probably a judge will decide these issues, bylaws don’t specifically call this out, grant of rights would likely be null & void
• Kolkhorst – What happens to autonomous leagues if the move continues to build a mega conference?
  • Reasonable to expect there will continue to be a migration, autonomous members would likely find homes
• Kolkhorst – What would happen if Clemson and Florida left the ACC?
  • Same as OU & UT in our league
• Kolkhorst – Only conference without a network is the Big 12?
  • Yes
• Kolkhorst – Due to Longhorn network?
  • Partially, also have 35 million in the footprint & density won’t support a network
• Kolkhorst highlights the excitement for college sports across the state and for sports aside from football, concerned that this could be damaged; could all this go away because of the love of money instead of love of the game?
  • Certainly; greatest threat to US Olympic movement is this sort of money grabbing
  • If funding declines, coaching salaries will go down, men’s and women’s Olympic sports will go away; no gov dollars in Olympics, only through colleges & universities
• Kolkhorst – Important to have chances for colleges like Stephen F. Austin and Texas Southern to have chance at national spotlight
• Nelson – For the remaining schools in Big 12, choices are go it alone, stick together, or try to rebuild the Big 12?
  • Yes, or some unforeseen option down the road like scheduling alliances, aggregate TV rights for conferences
  • Will make for some very strange bedfellows going forward
• Whitmire – Wouldn’t you agree that economic are the driving force in a lot of these decisions, e.g. Big 12 not expanding?
  • Certainly part of it, never had a championship game before
• Whitmire – Was there a recruiting process in the decision for 18 schools?
  • Varied from institution to institution
• Whitmire – What is the Big 12 looking for? Don’t think the world’s come to an end
  • Will have lots of opportunities, but not prepared to articulate a timeframe
• Whitmire – So you have things working that you don’t want to share, not getting transparency from you on discussions that would affect members
  • Haven’t spoken with any representatives of institutions about Big 12 membership
• Whitmire – Issue of governance over higher education, other significant matters like medical schools are decided on independent of the legislature
• Kolkhorst and Perry discuss large amount of Permanent University Fund money going to UT
• Perry – You will see legislation filed this special session to hopefully right a wrong, a lot of schools impacted should be getting these research dollars
• Nelson – $24 billion in the fund
• Kolkhorst – $2.5 billion in the current biennium given to two institutions
• Perry – This $24 billion does not include UT’s land grants of 2.1 million acres in West Texas
• Hughes – UT states they plan to fulfill the contract to 2024-25, are there things UT could do to further undermine the Big 12?
  • Intentions of UT & OU are to participate, Big 12 will do everything we can to make the experience of their athletes and fans as good as it can be
  • No decisions on additional members, makes sense to consider other options before expanding membership
• Taylor – Do you have concerns about overall future of college athletics with the concentration of a few power schools? Does this love of money damage college sports?
  • Not too dissimilar to migration of wealth in the country where fewer and fewer have more of the wealth, overall less competitive and the fewer opportunities we can present to young people
• Taylor – Concerned we’re losing our souls in pursuit of dollars
• Burrows – What is the difference between a super conference and mega conference?
  • Not sure if I can articulate the difference
• Burrows – Clemson and Florida State have applied to be part of the SEC, does anything prevent the SEC from leaving the NCAA?
  • No
• Burrows – What would happen if SEC left NCAA?
  • Would be haves and have nots
• Burrows – Would it also mean they don’t play in NCAA events and have their own branded competitions?
  • Could happen
• Burrows – Maybe ESPN wants this; bylaws provide the Big 12 will last for 99 years?
  • Mutual commitment to 99 years, everyone collaborated in writing of these bylaws
• Burrows – In sanctions section, member shall not be engaged in activities adverse to conference as a whole; why are these provisions important to other schools
  • Declaring what you believe in and having all members as signatories provides clear expectations
• Burrows – Members want assurances that conference will be around
  • Correct
• Burrows – What led you to the conclusion that conversations have been going on for some time?
  • Because these deals take time to put together
• Burrows – High probability that these conversations have been going on for weeks or months, that they were doing this behind the backs of the Big 12 and legislature; is this in the best interest of the conference?
  • No
• Creighton – Do you feel like the legislature made the correct move in passing the image & likeness legislation?
  • No short answer, fine that legislature did what, fine that the legislature did this, we had a guideline package in the works
  • Having a state law is better than no guidance from the NCAA
• Creighton – Would you have been comfortable if the legislature hadn’t passed the bill?
  • Have 4 other states in our membership who haven’t yet passed legislation, creates challenges
  • State laws tend to fall within some boundaries
  • In the SEC, 11 states have laws
• Creighton – We expected NCAA to have issued guidance by the time we proceeded
  • NCAA got a letter from DOJ challenging NIL and transfer portal, we were also surprised SCOUTS took the Austin case
• Creighton – Is the Big 12 due advance notice of member of conference beginning discussions with another conference
  • There is a bylaw requiring notification to the commissioner within 12 hours, second bylaw requires public denial if it is not accurate
• Creighton – Does this depend on inducement by the outside conference?
  • Doesn’t address inducement, just the conversation
• Creighton – Is it irrelevant that UT would’ve been induced by the SEC
  • It wouldn’t be if I was comfortable that was where the conversation started
• Creighton – If they were induced, you still hold firm that they undermined the Big 12 and were deceptive?
  • They didn’t hold to the bylaws, they didn’t notify of the conversations within 12 hours of the conversations first taking place
• Creighton – I look at the inducement as a distinction that excludes their responsibility to notify
  • I disagree
• Creighton – What has to happen for the Big 12 to stay intact?
  • Have begun to strategize, but there are some options that take time to develop
• Creighton – Do you have advice for other members that may be talking to other conferences?
  • There are right and wrong ways to do this, would get same letter as UT & OU
• Creighton – Heard speculation that Kansas was entering conversations, but that could be just speculation; did you feel the same way about A&M leaving?
  • Wasn’t commissioner at the time, haven’t gone back to look at time sequence
• Creighton – They broke a $1.3 billion contract with Fox Sports, didn’t have a legislative hearing over that, didn’t see anything in media or other documents alleging deception by A&M; UT is honoring their agreements?
  • Bylaws were adopted in 2012
• Creighton – Members had to waive litigation rights for A&M, not in current bylaws?
  • No
• Creighton – What is critical mass for the Big 12?
  • Form a legal standing, would only need 1 more
• Creighton – Do you know who paid for the Perryman economic report?
  • No
• Nelson – Your opinion is that Baylor, Tech, and TCU will keep themselves together as a package?
  • Haven’t had any conversations about this
• Nelson – You think the 8 members will stay together?
  • Think our best option is to stay together

 

Baylor University
Linda Livingstone, President of Baylor University

• Provides history and mission of Baylor University
• Not here to disparage UT, wish them well in the SEC and looking forward to UT fulfilling commitment to Big 12 through 2025
• 65 Power 5 institutions, Baylor is hoping to reach this status by 2024
• Impact is on people in the state, businesses in Waco, Lubbock, Ft. Worth, etc. that don’t have Power 5 athletics in their communities
• Last time Baylor spoke before legislature, university had lost its vision of athletics, looking forward to participating in Texas

 

Mack Rhoades, Vice President & Director of Athletics Baylor University

• Texas Tech, TCU, and Baylor deserve a seat at the Power 5 table
• Should endeavor to fully understand impact of UT & OU decision, economic impact will be felt in Austin & outside of our state
• Should do everything you can to help preserve the Big 12

 

Questions

• Nelson – Has Baylor started looking at conference alignment options?
  • Rhoades – We have not, fans and donors have
  • Our first responsibility is to think about Baylor, have had no formal conversations with any other conference, great respect for comm. Bowlsby and Big 12
  • General sense for the 8 Big 12 members to stick together
• Whitmire – Don’t you think you’ll have more to do with preserving the Big 12 than we will?
  • Yes, Baylor, TCU, Texas Tech can
  • There are some things that aren’t in our control, incl. commitment from TV partners, vibrancy of Big 12 relies on things beyond just the 8 members
• Whitmire – If we’re in this together, why wouldn’t you mention UoH and other institutions?
  • UoH is near & dear to my heart
  • For right now, I’m focused on not seeing a demotion for the 3 in the Big 12
  • UoH is certainly something we could look at, as are other schools
• Whitmire – How does it break down economically if UT & OU leave, will operations cease at Baylor stadium?
  • Livingstone – Who you’re playing makes a large difference to crowds
  • To replace the level of revenue lost, would need another Power 5 school
• Whitmire – Was there a similar impact after losing A&M?
  • Wasn’t with Baylor at that time
• Whitmire – Seemed like you were doing quite well
• Birdwell – Is there a regionalization aspect to game attendance?
  • Regional distance is a challenge in terms of fans traveling to games, does expand television market
  • West Virginia travels fairly well, also depends on alumni population
• Birdwell – Highlights Perryman report and wide impact on schools in the Big 12; how are the nonathletic elements affected without a power element?
  • Huge drive of interest in the Baylor community; Christian mission, academics, size, and athletics drive interest in Baylor
• Hinojosa – Don’t y’all depend on UT for everything?
  • It’s about the synergy that you get from a conference with institutions like UT and OU. No one or two schools make a conference, it takes diverse institutions
• Hinojosa – You’re saying that UT should be chained to a conference?
  • No, the transition just needs to be made carefully. Important that we all live by the bylaws that we committed to
• Hinojosa – This contract runs out in 2025. Is that correct?
  • The grant of rights with ESPN runs out then. We signed a 99-year contract
• Hinojosa – Then it seems like UT ends up subsidizing other schools in the Big 12.
  • Somebody is going to lose. When you concentrate all the best schools, some will lose, and it doesn’t help broad competition
• Hinojosa – UT seems to be subsidizing the other schools in the Big 12 Conference.
  • They drive a significant portion of TV interest. But it is the combination of all of those schools together that draws TV revenue
• Hinojosa – TV is the main source of revenue for the conference, correct?
  • Yes
• Hinojosa – I think the Perryman report overstates the negative economic impact that this would have
  • The Magnolia Market alone doesn’t have the same effect
• Hinojosa – You would have been okay if UT gave proper notice?
  • Yes, I think that would have allowed us to have conversations about the appropriate transition
• Hinojosa – The conferences are always changing. I would think y’all would have been better prepared.
  • We are not naïve about change
• Hinojosa – Baylor University has a great athletic program
• Whitmire – The Lubbock Chamber of Commerce paid for the Perryman report. He has a great report on the benefits of undocumented immigrants, and I find it funny that some people using his report on the conference want no part of his other work. If you were asked to enter the SEC would you?
  • I don’t think we’ll be asked to join, so I won’t spend time speculating
• Kolkhorst – When the SWC broke apart, Baylor was part of a team that was salvaged. How much money have you spent since then?
  • Rhoades – Prior to 2016, the $260 million football stadium was built. $25-40 million on track and field, upgrades, new administrative building, we were ready to build a new basketball arena
• Kolkhorst – Are you going to build the basketball arena?
  • The ability to borrow money may be decreased because of recent events
• Kolkhorst – I’m going to be optimistic and say you are going to remain whole. Your local community sees you at an asset. Who builds your other buildings?
  • Livingstone – Donors, we borrow money
• Kolkhorst – Other than helping with tuition, you don’t get money from the State of Texas.
  • We get some for research
• Kolkhorst – But you don’t get money from the permanent university fund or the AUF. The University of Texas gets billions of dollars from the State of Texas, Baylor pays its way
  • Yes, as do all the private institutions
• Kolkhorst – And not counting Notre Dame, there are 11 private institutions in Power 5, is that correct?
  • Yes.
• Kolkhorst – Would you say that there is value in private schools that really don’t get taxpayer dollars?
  • It costs the state of Texas less to send a student to go to a private institution than public
• Springer – Have y’all been visited by any of the rating agencies?
  • We had our bond rating reaffirmed a couple of months ago but haven’t been approached since the announcement
• Springer – I want to commend you for your 2021 football schedule. It is a huge benefit for non-Power 5 schools. I would hope going forward, that we try to help other up and coming Texas schools.
  • Rhoades – We try to be intentional to play regionally
• Perry – I’ve heard that bond ratings could potentially be downrated. Would you have been able to borrow money at the caliber that you have without being in a Power 5 institution?
  • Rhoades – Yes, I believe our standing in a Power 5 conference helped
  • Livingstone – Our renewed rating was the strength of enrollment, which is driven by participation in a Power 5 conference; one risk is that it could erode the enrollment base and put the bond rating at risk
• Rep. Anderson – Good academic students seem to choose schools with good athletics, Do you really think that the basketball arena will have to be reevaluated?
  • Rhoades – I can’t say for certain right now
• Rep. Anderson – Do you think this might impact research efforts?
  • Livingstone – I think it could impact our ability to recruit chaired faculty positions and our ability to recruit top students from around the country
• Birdwell – It’s an impact to our local communities. I wanted to make it clear for the record that we are concerned with those folks as well
• Kolkhorst – If there is one mega-conference, would that derail March Madness, or the CWS?
  • Rhoades – It certainly could
• Kolkhorst – How great would it be to see Stanford and the Baylor women’s team in Waco?
  • Livingstone – Yes
• Kolkhorst – Our eyes need to be set on the future. I think we can put together a package that will set us in the right direction

 

Texas Christian University

Dr. Victor J. Boschini, Jr., Chancellor of TCU

• We’ve been in Power 5 for 9 years and out of it for 10
• Everything is better when you’re in Power 5
• There is a direct connection between academic excellence and athletic success

 

Jeremiah Donati, Director of Intercollegiate Athletics TCU

• When the SWC dissolved, TCU was left out
• I heard from many donors asking to not let this happen again
• Being in a Power 5 conference increases revenues, ticket sales, donations
• Texas has more than 800,000 high school students in sports
• This is about more than the three schools that are here today

 

Questions

• Nelson – How important is it to local tourism for TCU to be in Power 5?
  • Donati – Ft. Worth and north Texas are very fast growing
  • Means a lot to businesses
• Geren – Dr. Boschini, what happened to applications after TCU won the Rose Bowl?
  • Boschini – They dramatically increased
• Geren – How much money has been spent on facilities since your tenure?
  • Donati – $500 million
• Geren – How much money has been spent on non-athletic facilities?
  • Boschini – $1.2 billion in 19 years, all from private donations
• Powell – I would guess that philanthropic dollars are part of athletics. As we look to the future, how will conference realignment effect your relationship to the philanthropic community?
  • It would have a great impact. We need to be in Power 5
• Powell – Do you think that winning the Rose Bowl increased student diversity?
  • Yes. It increased every aspect of diversity
• Powell – How do you see future realignment?
  • I see it as trying to make the Big 12 great
• Powell – What is the role that we can play for you all?
  • The most important issue we have would be the TEG, that provides access for students that wouldn’t get a college education
• Powell – It looks like the economic impact in the Perryman report is greatest for TCU.
  • Yes, because of where we are located
• Powell – What is the annual payout difference?
  • Donati – Our current distribution is $35-40 million, and before it was $5 million.
• Powell – Where would that cut come from?
  • One option is scaling back other sports and cutting opportunities for both men and women
• Powell – Would we see an impact to the retainment of great staff, less scholarships?
  • If we can’t compensate at the same rate, it will have an impact in the competitive marketplace
• Kolkhorst – Why do you think the move made by UT and OU was done so secretively?
  • I don’t know that it would have passed public scrutiny. It is difficult to speculate obviously
• Kolkhorst – Much of the money spent on TCU athletic facilities were spent on a journey to get into a Power 5 conference. No tuition revenue bonds. Most of that was done tax free.
  • Boschini – Yes
• Kolkhorst – In the Perryman report, Tarrant County loses the most jobs. Why do you think that is?
  • You don’t have as many people coming in for game day
• Kolkhorst – What did you mean when you discussed the 3 groups that would be hurt the most if TCU fell out of the Power 5?
  • You go from $35 million to $5 million. You cut sports like equestrian, tennis, that applies access to a lot of kids for college
• Whitmire – What is the size of your stadium?
  • 44,000
• Whitmire – Of the 44,000, how many are local? To fill up your stadium, you’ll still do a pretty good job, aren’t you?
  • You’ll get 3/4 from your base, but you’re counting on the last quarter coming in from the other school
• Whitmire – Y’all are private institutions, you’ve always stood away from the state. Has anyone discussed a clash where you want state involvement?
• Perry – There is a process that was outlined at the conference level. I’m not advocating that we get into trustees and contract breaks. We have a vested interest, but we aren’t writing checks for the economic downturn
• Kolkhorst – So you’re basically like a private company, coming in and creating jobs through private investment.
  • Boschini – Yes

 

Texas Tech University

Lawrence Shovanec, President

• Students are attracted to Tech because of athletics
• There have been great advances in higher education across the state
• Progress has come from collaboration, and that has been lacking in what has led us here today
• There is a massive benefit when student athletes participate in Power 5 athletes

 

Kirby Hocutt, Athletic Director

• Texas Tech holds many athletic records and titles
• This surprise exit was very surprising and disappointing
• This move has potential for significant financial impact
• We will rise to the challenge and continue to be the best athletic program possible

 

Questions

• Powell – Do you track ticket sales by geography?
  • Hocutt – We have season ticket holders from 95% of the counties in the state
• Powell – We seem to have lost track of academics. The gateway to the University is the athletic program. It’s their right to do it, but they didn’t do it right
• Whitmire – Why couldn’t one-star, two-stars get to play?
• Powell – It’s not that they wouldn’t get to play there, but they wouldn’t get recognized without a Power 5 school
• Whitmire – You’re making it sound like 2 teams are what makes your program. That can’t be real and if it is, this is a bigger mess than we thought
• Whitmire – Are you endorsing the University of Houston in joining the Big 12?
  • We don’t know how this is going to shake out
• Whitmire – We’ve heard all day that these two institutions leaving is the end of the world. I don’t know why we’re spending a whole day on this. I understand the TV considerations, but for you to say that people will lose opportunity
• Shovanec – I didn’t say the world was coming to an end
• Perry – You had talked about the real economic cost, what is it?
• Shovanec – Texas and Oklahoma represent about 50% of our TV value, you might project a $15 million hit there, we have estimated this to be $30 million
  • Hocutt – That is potentially 30% of our athletic budget
• Nelson – Do you think that OU and Texas were the main contributors to tourism? Or could those costs be mitigated by new teams?
  • Shovanec – They represent marquee programs that attract fans like many other schools can’t
• Burrows – Different conferences have reputations. Is there a concern that without some of the anchors of the Big 12, it will not be a Power 5 conference?
  • Hocutt – It is a concern, yes
• Burrows – If we do go down to four power conferences, at least 25% of those do look at academic standards?
  • Shovanec – Yes, that is true
• Burrows – We are at a competitive difference because we aren’t in the AAU
  • We would make our case for people to see the full value of Texas Tech, AAU relates to research expenditures and less to student outcomes
• Burrows – It looks like Texas and OU will honor their contracts, do you think it is possible to get into AAU?
  • It might be a stretch, but it is a possibility
• Springer – When we look at Power 5 vs. other conferences, what does that mean for endorsements?
  • Hocutt – All these auxiliary revenues would be affected
• Springer – When you see recruits outside of football, what conversation do those athletes have about the conference?
  • It’s a significant factor and motivator that opens up educational opportunities

 

The University of Texas

Jay Hartzell, President

• Athletics are part of the fabric of our university
• Collegiate athletics has changed as an increasingly rapid pace and uncertainty has increased
• This move was in the best interest for my university
• SEC is a better home with greater certainty
• Notice now was the best way
• Texas A&M agreed that joining the SEC will strengthen both Texas universities
• We have and will continue to honor all agreements and have not violated any Big 12 bylaw
• This gives ample time to conference partners

 

Questions

• Perry – Do you attend all the trustee meetings?
  • Yes
• Perry – Does the athletic director attend?
  • Only if there is discussion of an athletics matter
• Perry – Do you keep minutes?
  • Yes
• Perry – When were you first given an indication that you might consider an SEC move?
  • I was part of discussions to determine if that was a move we were making
• Perry – When was the first contact between UT and the SEC?
  • We reached out to the SEC this spring
• Perry – And you don’t view that as a negative?
  • If a conference reaches out to us, then there is a duty to report; that is my reading of the bylaws
• Perry – Disappointed how this transpired
• Hughes – When was the first communication between UT and the SEC?
  • I don’t have an exact date, but spring semester
• Hughes – Were you involved in that initial communication?
  • I could go back and check
• Hughes – Who initiated contact?
  • We reached out as a university
• Hughes – Tell us what you remember about that conversation.
  • We asked if this was a path that was feasible, and we heard that it was
• Hughes – Who else was involved in conversations?
  • Chris Del Conte, general counsel, chair of the board
• Hughes – When did you become concerned about giving up media rights?
  • We were on the path to not renew into the summer but was not a final decision until we got there
• Hughes – When was it that this was official, and the process?
  • Told the Big 12 what the trajectory was and nothing they said changed the course of action. Neither side was able to deliver what the other side was looking for
• Hughes – What about communications between UT and ESPN?
  • To my knowledge, zero communications between us and ESPN or any network
• Hughes – What about communication with OU?
  • Fall semester, we had a conversation about the trajectory of collegiate sports
• Whitmire – UT has always explained that money is profits. Why didn’t someone note that we use state facilities and employees?
  • The facilities that we build are out of athletic revenue. Salaries of the athletics department are self-sustaining
• Whitmire – Why is that money independent of state oversight?
  • I view it as in the state and university interest
• Birdwell – The University of Texas System is not Big 12; the University of Texas at Austin is, were you directed to contact the SEC?
  • It was at my direction, I reached out on my own accord
• Birdwell – Was your decision subject to board of regents approval?
  • Yes, the final decision was
• Birdwell – Did you notify the chancellor when you contacted the SEC?
  • No, not at that time
• Birdwell – Did you give any thought to notifying the Senate committees of oversight or representatives from effected locales? Did you talk to the Lt. Gov.?
  • No
• Birdwell – We’ve had testimony from the Big 12 commissioner that says that there was no request for extension of media rights. You mentioned that you sent a letter to the Big 12. What prompted it?
  • Seeing if we were happy with the status quo of the Big 12; in 2018, UT and OU both declined to extend media rights at that time
• Birdwell – You talk about your relationship with the SEC; Your relationship with the legislature is deteriorating broadly as you speak
• Springer – What’s the financial projection for moving to the SEC?
  • This is for media only, but over $60 million in future dollars
• Springer – And today you get how much?
  • $24 million, plus the Longhorn Network; it’s hard to tell
• Springer – Did you think the Perryman report was accurate?
  • I think there were weaknesses
• Springer – Do you think you should have communicated with the areas that may be affected?
  • That’s why we’ve given 4 years to figure this out
• Springer – Is the LHN going to be dissolved?
  • We’re expecting to wind it down, but we aren’t sure 100%.
• Springer – Are you paying the OU exit fee?
  • I don’t know where that came from. We are not paying the OU exit fee
• Taylor – Why do you feel like the Big 12 won’t be a viable option after 2025?
  • The SEC offers better recruiting, stability, etc. The world has a lot of uncertainty, and in our view, the SEC had a greater position of strength than the Big 12
• Taylor – What was the weakness in the Big 12?
  • People want to play against the best. SEC has more market share
• Taylor – Was there anything wrong with UT Athletics? What was the problem with the Big 12?
  • This isn’t about where we stand today. These media agreements come up every so often
• Taylor – So you thought the Big 12 was going to fail?
  • No. All I’m saying is that the SEC was a better home
• Taylor – What is a stronger and more positive outcome?
  • That conference was well positioned to weather the storm of what is changing in college athletics
• Taylor – Do you see viewership problems if there is a certain mega-conference?
  • As a fan, it is better if it’s competitive
• Taylor – What in this changing environment made you feel like the Big 12 would be less stable?
  • There is no one factor to point to.
• Taylor – From what I understand, UT’s revenues would be able to withstand changes.
  • We have to attract great student athletes. In many sports, the SEC has a bigger stage, but that is just one small part
• Hinojosa – From the projections I’ve seen, the SEC is expected to make $67 million per member and the Big 12 was projected as $40 million. Was this a big factor?
  • The idea of eventual media rights revenue is material; don’t know what the numbers are in 2025-2026. The decision has to be forward-thinking; we need the economic resource base to have an athletics department that subsidizes our academics
• Hinojosa – Why did you leave, the Big 12 if it’s not for money?
  • It was one singular factor. Economic levers that are pulled are more multi-faceted than the media rights deal. I can’t say exactly if one was a “deciding factor”
• Hinojosa – You would not object to staying in the Big 12 on income projections?
  • Might be some set of factors that would led to decision to stay, but didn’t put a dollar price on decision to stay or move
• Hinojosa – Main obligation is to the university, seems very clear that money would have to be the deciding factor?
  • Difference in frame is important, money is a deciding factor, but not “the” deciding factor
• Whitmire – Have heard all afternoon that other communities will miss big brand name, UT now has the opportunity to be in a conference with large names like Alabama, Auburn, etc.; same feelings from the other 3 smaller communities
• Whitmire – Houston a hotbed of recruiting, UT is losing to the SEC because they’re on higher profile TV, trying to compete with other SEC schools
• Whitmire – Wondering where this passion was when A&M picked up and left without notice
• Hinojosa – Was a different situation
• Whitmire – Understand the timing would get attention, this is what their base wants them to do; have spent 6 hours on this when there are issues like COVID
• Kolkhorst – If the world is headed to one mega conference, what does that do for the Texas athlete?
  • Don’t have any deep insight
  • Short run question might assume members of the larger conference are better off, but one can imagine that if the long run leads to less enthusiasm then there is a question on if it is best
• Kolkhorst – What is your athletic budget?
  • Over $200m
• Kolkhorst – Where does that put you in the US?
  • Probably first
• Kolkhorst – And that’s without a winning football team of late
  • In spite of our football team, we’ve been winning, just not like we like to win
• Kolkhorst – 3-7 against the Horned Frogs
• Kolkhorst – Are we saying that a 3-star athlete who can’t compete in a mega conference doesn’t have worth? Rhetorical, but needs to be said because we could look at this like as anti-trust, need to look at if this move is good for college athletics
  • If you give me a choice to play with 4 or 12 I’d play 12, on track to something that feels more like a meritocracy
• Kolkhorst – Merit to what Sen. Whitmire said, but when A&M left it didn’t crater a conference, A&M wasn’t the top & another power team was added, but going to 2 power teams is not good for the state; UT & OU leaving could shift the situation, but have faith that we’ll weather
• Burrows – You came to the decision in the Fall of 2020 that the Big 12 was not the path forward?
  • Became concerned, wanted to explore what was possible
• Burrows – Because you felt the Big 12 was unstable and not safe
  • Concerned about way things were heading, concerned about the way things were heading and looking for a steadier situation
• Burrows – What was unstable & unsafe about the Big 12 back in Fall of 2020?
  • Thinking about 2025 and beyond and looking at Big 12 if it is the best place for UT Austin; began to explore other options as fiduciary of UT Austin
• Burrows – Did you not think to try and fix issues in the Big 12
  • Sure, need to look at what the future would look like if we stayed
• Burrows – What did the Big 12 do wrong? What happened to the Big 12?
  • NIL will drive more choices by young people on where they want to play & brand value, SEC has more upside to enhance a student’s brand
• Burrows – So if the Big 12 kept A&M or expanded it would’ve been in a better position, did you look at anything that could’ve happened?
  • Looking forward, seemed low probability that Big 12 could get to a situation like SEC
• Burrows – I think Big 12 could’ve been that stable if we hadn’t run A&M out of the conference, a lot of this seemed to do with the Longhorn Network
  • Not in the seat at the time; agree that Big 12 would’ve been healthier with A&M around
  • Can’t change what happened then, can only play the cards dealt
• Burrows – Sure, but from my perspective maybe UT was the catalyst to making some of this happen
• Burrows – Who owns the Longhorn Network? How are decisions made
  • ESPN, can find this out
• Burrows – How often do you talk to Longhorn Network about future of college sports?
  • Not sure of this conversation happening
• Burrows – Did you consult with Longhorn Network on the future of college sports?
  • When I said I talked to no one at ESPN, that includes the Longhorn Network as a subset of ESPN
• Burrows – As you’re thinking about the future of UT, did you expand beyond your bubble?
  • Yes, decision making team is myself, AD, others
• Burrows – 4 people?
  • At the genesis yes
• Burrows – Did you consult outside this
  • Decision was made by UT leadership team
• Burrows – Did you make contact with other conferences?
  • I did not
• Burrows – Did Chris Del Conte or anyone else?
  • Don’t want to attest to what Del Conte did or didn’t do, not aware of anything & certainly not at my direction
• Burrows – Did you explore the idea of going to PAC, Big 10?
  • Yes
• Burrows – Were those invitations open?
  • Didn’t reach out
• Burrows – At what point were you certain that the invitation to the SEC was solid?
  • We got comfortable around summer
• Burrows – Did you use the fact that you were leaving the Big 12 in helping to recruit athletes or coaches to UT?
  • No
• Burrows – are you going to use increased revenue from SEC to offset state budget?
  • Goal is to make the university more excellent
• Anderson – In your initial contact with the SEC and in initial thoughts, what else aside from money & media was it?
  • Overall brand reputation, global presence, exposure; the concerns of a healthy sports enterprise, will recruit better athletes
• Anderson – Was there any discussion about a mega conference?
  • No
• Anderson – Do you know if OU had any conferences?
  • Don’t know
• Anderson – Do you have any anticipation or expectation of a mega conference?
  • No deeper insights
• Anderson – In your heart of hearts do you think there is potential for a mega conference?
  • Could happen, seeing consolidation; on the other hand you see what happened with soccer in Europe and it didn’t last very long
• Anderson – Something I’m concerned about
• Nelson – No law prevents UT from making this move, each institution has a right & responsibility to look out for what is best for each institution
• Nelson – This panel’s responsibility is to do what is best for Texas, hearing has given us a lot to think about; important dialogue that will continue in the weeks to come