Report: Texas, Oklahoma to pay lesser buyout to leave Big 12, member schools 'dumbfounded' by settlement

When Oklahoma and Texas announced their plans to leave the Big 12 for the SEC, it wasn’t supposed to happen until 2025. However, the two schools came to an agreement to leave a year earlier, and details of that deal have now come out.

USA Today’s Steve Berkowitz and Kirk Bohls reported both Oklahoma and Texas will forgo $100 million from the Big 12. The conference told USA Today the breakdown of that number comes from $80 million the schools will not receive in 2024-25 as well as cuts in full revenue shares for the 2023-24 year to UT, OU and the rest of the conference membership that’s going to the four schools that came aboard this year: BYU, Cincinnati, Houston and UCF.

Some conference officials shared their reactions to the settlements, including Kansas State athletic director Gene Taylor. He told USA Today he was “kind of dumbfounded” and “we fought back as hard as we could.

However, Yormark and conference presidents and chancellors pointed out the looming legal battle because the bylaws are “not as rock-solid as everybody thought and we could be tied up on lawsuits forever.”

Yormark also commented on the settlement. He was pleased with how things went and touted the conference’s “bright” future.

“This was a business decision,” Yormark told USA Today. “Historically the withdrawal from a conference has resulted in a negotiated settlement, and we believe we landed in a good place. Our future is as bright as it’s ever been.”

Why Oklahoma and Texas received full revenue shares from the Big 12

The Big 12’s bylaws said Oklahoma and Texas’ conference revenue shares should have been withheld. That wasn’t the case, as the two schools haven’t had any funds withheld nor will they in 2023-24. In addition, the shares for the schools staying in the Big 12 — as well Oklahoma’s and Texas’ shares — dropped to $7 million to help with the four additions.

In addition, conference bylaws that took effect in July 2021 said a school withdrawing from the league would have to pay a buyout “equal to the sum of conference revenue shares it would otherwise have received during its final two years in the conference,” according to USA Today. The bylaws also include a provision that states most of that buyout will be through the conference “withholding revenue that it otherwise would have given to the school.”

For Texas and Oklahoma, though, they got full revenue shares through the end of FY 2022, per the conference’s federal tax records obtained by USA Today. The reason for that is the two teams were planning to leave in 2025 at the end of the TV contract, according to former commissioner Bob Bowlsby, and “a lot of things were still in flux at that time.”

In February, when the Big 12 announced Texas and Oklahoma would leave in 2024, the conference pointed out the schools would forgo $100 million in distributable revenues. The conference told USA Today that was an estimation.

“Conference revenue derived from media rights contracts in (2024-25) will not decrease despite the early departures of OU and Texas,” the conference said. “By leaving a year early both institutions forego (fiscal year 2024-25) distributions from the Big 12. The ($100 million) also includes (the schools’) shares of the reduced payouts this (fiscal year) that all 10 continuing members will forego as a result of expansion.”

How Texas, Oklahoma will transition to the SEC

When Texas and Oklahoma officially join the SEC, neither school will be able to receive money from the SEC’s primary revenue sharing pool, according to USA Today. However, the SEC is still going to cover certain expenses such as conference championship participation and more postseason events. If either team plays in the NCAA Tournament or a bowl game, they’ll also receive the standard participation payments.

While they’ll still be set to make “millions” from football and men’s basketball distribution, per conference bylaws, there are other ways for the schools to make money.

ESPN sent a statement to USA Today about that plan, and said the media partners came together to get a “resolution” together.

“After Texas and Oklahoma made the decision to change conferences, those schools, along with the Big 12 and SEC, chose to accelerate the process and transition a year earlier,” the statement read. “At that time, the media partners were brought in to reach a resolution that would satisfy all parties for the 2024-25 season.”