K-State AD Gene Taylor not expecting Big 12 revenue drop after Oklahoma, Texas exit
The days of Big 12 schools earning close to $40 million a year in conference revenue may be numbered, but at least one of the league’s athletic directors isn’t worried about future revenue levels after Oklahoma and Texas depart for the SEC.
Kansas State athletic director Gene Taylor is bullish on the Big 12’s financial future with BYU, Cincinnati, Houston and UCF set to join. So much so, that he thinks their additions will bring enough new value to offset the losses of two current flagship members.
“There was a lot of stuff out there early on when Oklahoma and Texas left and it was just going to be the eight of us,” Taylor said. “There were some big numbers thrown around, but I don’t think that’s going to be the case once we bring in these four ... I’m assuming we can stay pretty close to where we are.”
Big 12 commissioner Bob Bowlsby originally forecast that the conference would lose roughly half its TV value without Oklahoma and Texas in the league. He said each Big 12 school currently earns close to $28 million a year in TV revenue, and he projected that number would fall to about $14 million in the future.
Taylor thinks some have taken those numbers out of context. He said that valuation was meant only to describe the Big 12’s earning potential if the conference chose to march forward with only eight members.
Expanding to 12, with four new schools that add quality football and big media markets to the conference, should significantly soften any financial hit the conference previously expected to take, Taylor said.
Cincinnati, Houston and UCF are all located in big cities. And Taylor thinks BYU and its massive fan base will bring “more of a national feel” to the Big 12.
“We looked at the success of their programs,” Taylor said, “we looked at their media market, we looked at a lot of data in terms of eyeballs on their programs and how they compare to other schools that might be out there and where they compare to the eight of us ... Those four rose to the top.”
The difficult thing about projecting future financial earnings is that nobody knows what the changing media landscape will look like in 2025 after the Big 12’s current deal with ESPN and FOX expires.
Traditional cable and satellite packages are on the decline, while streaming companies such as Hulu and Netflix are on the climb. Notre Dame just played a home game that was streamed exclusively on Peacock. K-State will play three straight games away from traditional TV on ESPN+ this season.
If more streaming networks get involved with live sports, perhaps that could also drive up media-rights revenue for the Big 12.
“It’s really hard to guess,” Taylor said. “There are some estimates out there and some articles that I have read, and I don’t know where they’re getting those numbers because they’re probably not talking to ESPN of FOX. It just depends on who’s in the market when we go to market.”
For now, Taylor isn’t expecting a drastic change in K-State’s athletic budget after 2025.
The Wildcats are projected to spend $82.3 million on athletics during the 2021-22 athletic year. The bulk of their revenue is expected to come from Big 12/NCAA distributions ($44.3 million), gifts from donors ($16 million) and football ticket sales ($9.5 million).
A $14 million loss in conference distribution, as Bowlsby originally projected, would force Taylor to make some difficult cuts to K-State’s bottom line. That’s one reason why the Big 12 focused on adding teams that brought new value to the conference during its expansion process.
Conference realignment hasn’t slowed fundraising in Manhattan.
Despite some uncertainty about the future, the Wildcats have raised enough money from donors to announce construction plans for three new athletic projects — a new volleyball arena, an Olympic performance center and an indoor football practice facility.
K-State announced Saturday that it has raised $96.5 million for the projects. All three are expected to be completed by the fall of 2023.
It may not have been a coincidence that K-State announced those projects a day after the Big 12 added four new teams and brought a sense of financial stability to the conference.
“We got four really good programs coming in,” K-State football coach Chris Klieman said. “We’ve got a couple of top 10 teams in football, and that is really important, a couple of really good markets in Florida and in Houston. I’m excited to have BYU join, because I’ve played out there and it’s a great environment and venue. I think it solidifies the Big 12 as a power conference that’s here to stay for the long haul.”
This story was originally published September 14, 2021 at 9:37 AM with the headline "K-State AD Gene Taylor not expecting Big 12 revenue drop after Oklahoma, Texas exit."