EDMOND — With its pageantry, tradition, competition, rivalries and loyalties, there is nothing quite like college sports. Still, the business of college sports is not all that different than any other business enterprise. Just like any business, concerns about market share, competitive pressures and revenues drive most decisions. Not surprisingly, these concerns indicate that now is a precarious time for Oklahoma State University.

While the public generally laments the role that business forces play in athletics, an entire field of economics has sprouted in recent decades to study the business side of sports. In fact, the same general principles that guide our understanding of the business world, are the same general principles at work in the world of college athletics. If we are to understand what is happening, we need to understand these basic principles.

First, schools are less interested in pursuing the greater good of college sports, than they are in pursing their own selfish interest. For example, in recent years the Texas Christian University football team has enjoyed a great amount of success. As a result, numerous observers have suggested that the Big XII expand to add TCU as a member. While this might be good in terms of fairness and quality of play, expanding to include TCU was never in the best interest of the Big 12 nor its membership. Consequently, TCU remains in the Mountain West Conference.

Second, changes in revenue streams change the incentives that drive business decisions. In the past few decades there has been a significant increase in the amount of television revenues that schools in major conferences can receive. Consequently, schools now have a greater incentive to take steps to enhance this revenue stream. This is what led the Big Ten Conference to launch the Big Ten Network, which significantly increased the television revenues of its member schools.

Third, there are two ways to grow your business — improve your performance in your current markets or expand into new markets. In recent months both the Big Ten and Pac Ten conferences have announced plans to explore the idea of expanding to include new schools. In fact, just this past week a college football fan site, www.orangebloods.com, reported that the Pac Ten conference was preparing to invite six current members of the Big 12 conference including OU and OSU. By doing so, the Pac Ten would grow their reach into several large television markets.

Fourth, any transaction has to benefit both parties. In this case, a conference will expand only if the expansion benefits both the current members of the conference and the invited member. Otherwise, either side will walk away. This means that geographic proximity is not enough to warrant an invitation into a conference (which explains why TCU never received a Big 12 invitation). Instead the school must add value to the conference. This could occur in three ways:

• A school provides access to a large television market, therefore enhancing television revenues.

• A school has a history of having an elite football or basketball program to bring more national credibility/interest.

• A school is recognized for its academic reputation such as being a member in the Association of American Universities  —  a prestigious collection of top research institutions.

Using these criteria, there are six current Big XII schools that should be attractive to a Pac Ten conference looking to expand. Those include:

• University of Texas — Texas markets, elite program, AAU school;

• Texas A&M, Texas markets, AAU school;

• OU — elite football program;

• Nebraska — elite football program, AAU school;

• Colorado — Denver market, AAU school;

• Kansas — elite basketball program, AAU school.

Notice that Oklahoma State University is missing from this list— and this should be the concern for Cowboys’ fans. Oklahoma State on its own, does not add enough value to the Pac Ten Conference schools. Consequently, the Pokes are in serious jeopardy of being left behind. Such a move would be harmful to Oklahoma State’s athletic and academic programs.

Here is where it gets interesting though. In an ironic twist, OSU’s fate depends upon their arch-rivals in Norman. If the Big 12 collapses, as it increasingly appears to be doing so, the only way that Oklahoma State winds up in the Pac Ten or other superconference is if the Oklahoma schools are viewed as a package deal — that a conference cannot take the Sooners without the Cowboys. That might not be what the Pac Ten wants, or even what OU wants, but that is the best hope for the Pokes. If the report this week is true that OSU can soon expect an invitation to the Pac Ten, then all you Cowboys’ fans should send a big thank you to your arch-rivals in Norman.



MICKEY HEPNER is an associate professor of economics at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.