(02-14-2023 01:30 PM)Glenn360 Wrote: Quote:One estimate by the research firm The Perryman Group reports the loss of UT and OU will cost the Big 12 almost $940 million per year and 12,000 jobs. Texas Big 12 cities alone, like Lubbock, Waco, and Fort Worth, could lose almost $400 million and more than 5,300 jobs.
I need someone to explain this to me because I don't understand this? Its not like Tech, Baylor, and TCU and Big 12 cities will stop playing sports with Texas and OU gone.
Here is the report:
Potential Economic Consequences of Texas and OU Leaving the Big 12 Conference (PDF)
The report was issued in July 2021 soon after OU and UT announced their exit, and before Houston, BYU, Cincinnati, and UCF were added. The Perryman Group is headquartered in Waco. It is not clear whether the report is advertising for the services of the firm; or was commissioned by someone such as the DMN).
It may be that the report is similar to that produced for J.T. Boondoggle, who is trying to convince a city to fund a stadium for his baseball/football/basketball/hockey team.
They considered two scenarios. One was that revenue, attendance would descent to the level of the (2021) AAC, which they considered to be the highest profile conference without schools of the stature of OU and UT. They said that they adjusted these figures for the conditions of the individual schools.
They reasoned that most of the effect will be in and around the BXII schools (i.e., Lubbock, Waco, Fort Worth, Stillwater, Manhattan, Lawrence, Ames, and Morgantown). Of course some of the lose will be dispersed, such as less money spent at Buc-ee's for a alumni/fan traveling from Abilene to see a game in Lubbock, Waco, or Fort Worth. So when the report said "Big 12" they really meant the impact on the member schools and their communities. I don't know if they considered any effects on the conference offices in Irving.
The second scenario was if the Big 12 fell apart and the individual schools fell to the level of the Mountain West.
What they do not present is their estimates of current gross spending, but rather net change (losses). So you can't see whether they are saying that Baylor spending is estimated to be dropping 20% or 2%.
They provide separate effects of "Direct Educational Spending Loss" and "Direct Tourism Losses"
I don't know what they mean by "Educational Spending Loss". If the TV Contract drops by $X,000,000; does that mean reductions in wages for Dave Aranda's staff (i.e., any spending by Baylor is "educational" in nature), or due to redirecting spending. In order to keep the football program at the same level, they move institutional funds into the athletics department and they fire a history professor, a staffer in the admissions office, and a janitor.
Direct Spending Losses can have further induced effects. They estimate that Baylor would have $53M is direct tourism losses, but $84M in losses to the Waco economy. If maids, desk clerks, waitresses, etc. lose income, then there is less money available to hire school teachers, etc. due to less spending by the desk clerks, etc.
But let's say that losses in Waco due to tourism losses are indeed $53 million. That works out to around $8 million per home game (6-1/2 home games per season). But if the average "tourist" spends $1000 to attend a game in Waco, that implies a loss of 8,000 in attendance.
But assuming "tourists" include alumni traveling from DFW or Houston to Waco, do they actually spend $1000? Maybe they spend $1000 to attend a bowl game (air fare, hotel rooms for several days, expensive meals, etc.). But does a fan driving down from McKinney spend that much? Do they stay overnight in Waco? If they are more frugal, maybe they stay in Temple or Hillsboro to avoid jacked-up prices in Waco.
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The commerce of conference realignment: What UT’s move to the SEC means for Texas
