A&M to the SEC - Reasons Behind the Decision

A&M to the SEC - Reasons Behind the Decision

The state and national media seem to think Texas A&M left the Big 12 due to emotional reasons surrounding the Longhorn Network. However, the decision to join the SEC had more to do with enhancing the university's national brand. Aggie Websider's David Sandhop takes an in-depth look at the factors behind A&M's move to the SEC.

After months of speculation, Texas A&M President R. Bowen Loftin did what every media pundit, college football analyst, and casual college athletics fan felt would never happen. On Monday, Loftin accepted an unconditional invitation to join the Southeastern Conference in front of SEC Commissioner Mike Slive, SEC board chairman and University of Florida president Dr. Bernie Machen, and several hundred celebrating Aggie students and supporters.

On June 30, 2012, Texas A&M will leave the Big 12 Conference and in the process split with long-time in-state rivals Texas Tech, Baylor, and Texas. It was something the Big 12 Conference thought would never happen as well. After all, Texas A&M has always been joined at the hip with its lone star state brethren. That was no more evident than in the mid-1990's when the Longhorns and Aggies flirted with the SEC when the venerable old Southwest Conference was on its last legs. At the time, Texas governor (and Baylor graduate) Ann Richards and lieutenant governor Bob Bullock (Texas Tech graduate) used their political clout to force a merger between the Big Eight and four schools from the SWC to form the Big 12. SEC expansion into Texas was thwarted for the first time.

The shotgun wedding was expeditious for the political leaders from the state of Texas, but the alliance proved tenuous from day one when the Longhorns flexed its muscles immediately to end the unlimited use of academically-challenged "prop 48" athletes that were the cornerstone of old Big Eight powers Nebraska and Oklahoma. Texas also insisted on unequal revenue sharing based on TV appearances. There was also plenty of bickering regarding the location of the conference's premiere football and basketball conference championship events. There were other spats over the course of 15 years, but Nebraska finally had enough of Texas' perceived heavy-handed tactics and in 2010 bolted to the Big Ten while Texas planned to take OU, OSU, Texas Tech, Colorado, and Texas A&M to form the PAC-16.

But the Aggies started to have second thoughts about moving west, concerned about a poor cultural fit with many of the liberal west coast schools like Cal-Berkley. It was at this time that former Texas A&M player/coach and current regent Gene Stallings used his connections as a former Alabama coach to inquire about the SEC's interest in his alma mater…and to the surprise of Texas A&M administration, there was great interest. In fact, SEC commissioner Mike Slive even traveled to College Station to meet with Texas A&M administration on the possibility of switching conferences. However, while the Aggies flirted with a possible move in June 2010, the university did not have the united support needed from administration, donors, and former students. With the state legislature going into session the spring of 2011, Texas politics was also a factor. As a result, President Loftin agreed to remain in the Big 12 with certain financial and operational concessions from the Big 12 Conference. The SEC's expansion into Texas was thwarted yet again.

However, just six months later, the Longhorns not only signed an exclusive $300 million deal with ESPN for the Longhorn Network with ESPN, but the network pushed for Big 12 football game rights and broadcasting rights to Texas high school sporting events that featured Longhorn verbal commits and recruiting targets. This triggered the latest and ultimately final contact between Texas A&M and the SEC that eventually led to this week's unconditional invitation and formal acceptance as the 13th member of the Southeastern Conference.

But, the underlying reasons for Texas A&M's departure to the SEC did not revolve around the controversial Longhorn Network as many think. The issues surrounding the network definitely hastened the process, but make no mistake Texas A&M was eventually going to land in the SEC. This was an 18-month process, although seeds for this eventual move were likely planted back during the initial flirtation in 1994.

Many in the national media have suggested Texas A&M's move to the SEC was an emotional decision based on jealousy toward the University of Texas. Some analysts have even suggested that the Aggies "wanted to take their ball and go home", as if the decision to leave the Big 12 was a spontaneous move born out of anger and frustration toward the Longhorns.

That simply wasn't the case for the administration and the board of regents tasked to make such decisions impacting the university and its athletic program for the next century. Look at Loftin's comments made at Monday's press conference and you see hints at the real reason why Texas A&M is leaving the Big 12.

"The Southeastern Conference provides Texas A&M the national visibility that our great university and our student-athletes deserve," said Loftin. "Now, we have a venue. The SEC will be our national stage every day, every month, every year, giving extra value to our former students. The brand of Texas A&M is made by you, and it will be seen every day."

This was a business decision made by the university executives, not an emotional reaction to a third tier rights television network. The issue at hand for Loftin is building Texas A&M's national brand, which is sorely weak at this point. That may come as a surprise to most Texas A&M former students and supporters, because the Aggie brand is strong within the state's borders.

Sources have indicated that a study was commissioned last year to evaluate the current value of the Texas A&M brand, and the results were quite startling. Despite a well-recognized brand within the state of Texas, outside the region very little was known about the university's established research capabilities and scholastic reputation within academia. In fact, the results suggested that few respondents outside the state could differentiate Texas A&M from other Texas institutions, and that Texas A&M needed to find a vehicle to improve visibility across the nation and enhance the value of the university's brand.

One of those vehicles is the Southeastern Conference with its exclusive national TV contract with CBS. Add in the agreement with ESPN, and over half of the SEC institutions are on national television every week. In 2010, every LSU conference match-up was on national TV. By comparison, only the Thanksgiving date with Texas was a true national broadcast for Texas A&M despite Top 10 games with Nebraska and Oklahoma last year. Texas A&M leadership believes the opportunity to play regularly on the national stage is one of several moves necessary to begin the process of building the Aggie brand across the country.

Of course, that only happens if Texas A&M's major athletic programs can compete at the highest levels, especially in football and basketball where exposure is the greatest. A&M officials feel that being the only SEC institution in the state of Texas will enhance overall recruiting in the lone star state and will also open up recruiting in Louisiana and surrounding areas. That means being more competitive on the recruiting trail against Texas and Oklahoma selling top prospects on what many believe is the best football played in the country. The Aggies hope to sell blue chips a unique opportunity to play in the best athletic conference while staying close to home near family and friends, something its Big 12 rivals can't offer. Officials believe this message will be especially strong in the eastern parts of the state including the Greater Houston area and the piney woods of East Texas.

Finally, the financial component is critical to the future success needed to be consistently on the national stage. While Texas A&M's athletic department budget is formidable in the $70 million range over the past couple of years, that pales in comparison to the top tier athletic departments like Texas, Ohio State, Florida, and Michigan with expense budgets over $100 million. Texas A&M believes the university can make big strides in this area under the SEC banner.

Most financial analysis regarding realignment discussed in the media focuses on conference TV contracts. In fact, detractors of Texas A&M's move to the SEC point to a very small difference in the estimated financial TV package of the Big 12 once it renegotiates its tier one rights deal in three years versus the SEC. That can be debated, with the SEC looking to rework its existing TV contracts as well, but let's put that aside for now. After all, conference and NCAA TV revenues account for only 15-20% of total athletic department revenue among the larger top tier programs. The majority of revenues are generated from general ticket sales and donations. In 2009, nearly 67% of all Texas A&M's revenues came from these two components. Conference and NCAA television sources accounted for roughly 15% of the department's revenues.

The university is banking that the move to the SEC will generate excitement and interest in the program among its supporters, which will increase that 67% piece of the pie. Early indications are that the move will pay off in this area. In fact, the ground swell of support for a move to the SEC in recent months by the former students and donors likely made the decision to leave the Big 12 much easier.

According to several sources close to the university, conditional donation pledges flooded the university when rumors surfaced that Dr. Loftin and his team were once again pursuing membership in the SEC. These donations will pay for the expenses of leaving the Big 12. There are also rumors that a significant "Boone Pickens-esque" nine digit donation pledge is in place that will be used for the Kyle Field renovation and expansion project to begin in 2013. The project should add a south end zone enclosure that will include more luxury suites and possibly more seats that could see Kyle Field approach the 100,000 seat capacity. Thus, the pieces will be in place to significantly increase ticket sales and associated donations.

When the latest SEC rumors heated up in late July, Texas A&M's athletic department saw an immediate surge in remaining ticket sales, selling out all season tickets for the first time in recent memory. Just two seasons ago, football attendance averaged approximately 74,000 for the Aggies' first three home non-conference games. For the first two non-conference home games in 2011, attendance spiked to 86,800 which is above official capacity.

With these figures in place and the excitement generated by the possibility of joining the SEC, the short-term financial risk of leaving the Big 12 is minimal. In fact, the early evidence clearly shows that the Aggies will have a significant bump in revenues and capital funds. Add in the extra conference TV revenues from the SEC (which several internal sources project will end up being over $30 million annually), potential increases in licensing and merchandising, sponsorships, and concessions, and the Texas A&M administration feels that the university will soon approach the same financial area code of the big boys.

Of course, ultimately the excitement and shine of joining the SEC will eventually fade, and then the hard work begins. Excitement will be replaced by expectations. To sustain the expected revenue growth and to fill a 100,000 capacity Kyle Field in the long term, the Aggies must put winners on the field, and be able to consistently compete with Alabama, Florida, Auburn, LSU, etc. for conference titles.

Dr. Loftin and the Texas A&M administration are betting big that the Aggies will thrive in the SEC environment. They are betting on the Aggies going national. They've gone all in, and the university and its supporters and stakeholders are hoping for a royal flush.

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