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Touchdown or turnover? Experts analyze whether UT's move to the SEC will help or hurt the CTX economy

Posted: 7:13 PM, Aug 06, 2021
Updated: 2021-08-06 20:13:42-04

The University of Texas hasn't seen any major football success since the Mack Brown era, but that doesn't mean the team doesn't bring in economic wins to Central Texas. So with the Longhorns and University of Oklahoma Sooners planning to move from the Big 12 to the SEC, many are wondering if the Central Texas economy will see a fumble or two.

When football season kicks off, it's a big deal for the state of Texas. Not only do people buy tickets to the game, they also spend money at hotels, restaurants and shops, meaning big bucks for local economies.

However that could all change with this highly talked about college football realignment.

"It is going to have some economic ripple effects on the community, and certainly anyone that's in a business that either directly deals with any of these areas or is in the supply chain to these areas, there's certainly going to feel some stuff, some effects of it," explained Ray Perryman, president of the Perryman Group.


Before we continue, let's break down some basics of college football.

College teams are grouped together in conferences. The people who are in your conference are typically who you play in a season.

UT and OU are currently in the Big 12, which also features Baylor and TCU. If UT and OU move to the SEC, there's less of a chance they'd play Baylor or TCU, unless a deal is worked out.

While that may sound like no big deal, without any star-studded opponents, experts worry there will be less people who will want to travel to Central Texas, meaning less money.

"The state of Texas, at this moment, has five schools that are part of the so-called Power Five conferences. We're in grave danger, in the next major realignment, of leaving Texas with only two, which would be the same as a lot of much smaller states than Texas, and so the state has a big stake in this as well," said Perryman.

The Perryman Group estimates that the Waco, Lubbock and Fort Worth areas could lose hundreds of millions in annual gross product and thousands of jobs.

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"We found that with the Waco area, under the Big 12 hanging together scenario, would lose somewhere around $127 million a year, around 1,700 jobs. If indeed it went worst-case scenario than that, it could be as much as $180 million a year and about 2,400 jobs," Perryman continued.

But some experts are throwing the challenge flag, saying this failure to maintain possession is actually a catch.

"The universities are a big business, but the football teams are a real small part of the university. So you know, we spend a lot of attention because we love football, but that misleads us into thinking that these football teams are much more economically important than they are," explained Mike Davis, an economics and finance professor with the SMU Cox School of Business.

Davis says this false sense of economic success is not just seen in college football.

"There's so much smoke and mirrors that surrounds the economics of sports, you know. So you will read this thing that people will say, 'Oh, if we get a pro-team in our, in our city, or if we joined this league or that league, we're going to make hundreds of millions of dollars.' Again, I hate to be cynical, but let's be cynical. It doesn't work out that way," he continued.

When it comes to fans of any Texas college, as the saying goes, if you build it, they will come. But in this case, the fear is if you break it up, they will disappear.

"People like Baylor football because they like Baylor, so they're going to go down. I have lots of friends up here in Dallas who are Baylor people, and so, you know, once or twice a year, they get in the car and they drive down and watch a game and they have a lot of fun. They're going to keep doing that whether or not, you know, Texas is in the league or not," said Davis.

When asked about the realignment, in a statement, Waco Mayor Dillon Meek said "Waco's fast-growing economy will remain strong."

"There's no denying that Waco and the surrounding areas experience tremendous economic activity when the UT and OU teams come to town. And while I'd be remiss not to acknowledge the obvious and significant financial ramifications this decision will have on the city—specifically on those respective home-game weekends—we have every reason to believe Waco's fast-growing economy will remain strong with a future that's even brighter than it's present. We have worked -- and are committed to continuing to work -- strategically with Baylor University and other state leaders as more details surrounding the emerging news come to light."

UT and OU aren't expected to become an official part of the SEC until 2025, meaning Central Texas has time to go for two and secure both economic and football wins.