Texas and Oklahoma, prominent college sports programs, are set to leave the Big 12 Conference for the SEC in nine months, but their financial impact will be much less than originally expected.
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The Big 12 initially projected a loss of $160 million from Texas and Oklahoma's departure, but recent developments reveal a much lesser financial blow.
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In February, the Big 12 announced that Texas and Oklahoma would forfeit $100 million as part of an agreement allowing them to leave a year earlier than originally planned.
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Over $80 million of the projected loss is related to money the schools won't receive in the 2024-25 academic year,
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with the rest attributed to revenue share cuts in 2023-24 to finance payments promised to four schools newly joining the conference.
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Texas and Oklahoma will not face financial penalties for leaving the Big 12, contrary to the conference bylaws that called for withholding two years' worth of their revenue shares.
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The revenue shares of Oklahoma, Texas, and the eight continuing Big 12 members will be reduced by approximately $7 million per school in 2023-24 to
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fund $18 million payments to the new members: Brigham Young, Central Florida, Cincinnati, and Houston.
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While Texas and Oklahoma won't receive money from the SEC's primary revenue-sharing pool in 2024-25, they stand to collect substantial sums through football- and men’s-basketball-specific distributions and "transition" payments funded by ESPN.
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These transition payments from ESPN are part of a resolution reached when Texas and Oklahoma accelerated their move to the SEC, ensuring the financial stability of both conferences.
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Despite some confusion among Big 12 athletics directors, the departure agreements allowed Texas and Oklahoma to receive full revenue shares during their final years in the conference.
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The future financial landscape for Texas and Oklahoma includes shares of "new and additional marginal net revenue" generated by sources such as the expanded College Football Playoff
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and modified broadcast rights agreements within the SEC, with ESPN making additional payments to both schools as part of contract modifications.
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