Expansion Project Vol I
Expansion Project Vol II
The University of Memphis was founded in the early 1900s and has grown along with its namesake location. The bulk of its students come from west Tennessee and the metro area, though more and more are coming from around the southeast.
Currently the university supports around 21,000 students, 17,000 of them being undergraduates. This is on the light side for the Big 12, which averages around 28,000 students, but it places them between member institutions like Kansas State or Oklahoma State, who average around 24,000, and Baylor and TCU, who average around 14,000.
On a lighter note, the Big 12 is lacking in Tiger mascots, unlike the SEC, so there would not be any issues with Memphis on that regard. In other categories, however, let’s take a closer look.
Of all the categories this is the worst performance for Memphis. However, I also believe it is the one piece that could likely rise the most with Power Five inclusion. The two aspects keeping their ranking down the most are enrollment and what they make on rights and licensing.
From an enrollment stand point, there isn’t much that can change with this in the short term. Being a Power Five school likely won’t increase applications by more than 20% immediately and, even if it does, the university would need to construct more dorms or housing near campus to handle the increase, which takes time. Additionally, they are likely nearing the top end of enrollment within their region, unless the region itself grows. The two largest public institutions to compare them too aren’t much bigger. On the other side of the state the University of Tennessee has 27,000 students and an hour south of Memphis is the Ole Miss, who has 24,000 students. Due to that, while it is not a large student base to add to the Big 12’s to keep up with the Big Ten, it is a healthy enrollment for the area.
Rights and licensing is a bit of a different animal. Within the Big 12, Texas makes around $60 million off its licensing, which indicates a very large fan base. They are also not the only school in the Big 12 to do well. Oklahoma makes around $46 million, Kansas makes $36 million and even Iowa State makes $30 million in this category.
Memphis makes $9 million.
Considering how well Memphis basketball has done historically, I expected this to be higher, but either way it should increase considerably after joining a Power Five conference. The exposure alone will be many multiples more than what they receive today.
If there is one thing that the University of Memphis can pitch to the Big 12 powers that be is that they are located in a perfect position for the Big 12. Matter a fact, when looking at all of the schools within the Power Five and the AAC, there were only four schools that scored better than Memphis; Ohio State, Missouri, Kentucky, and Cincinnati, in that order. The reason for this is their location just south of the confluence of the Ohio and Mississippi rivers.
Ever since West Virginia joined the Big 12 the direction of the conference has pointed up the Ohio River Valley. Memphis is located 290 miles from the geographic center of the Big 12 and 750 miles from Morgantown, nearly a polar opposite of fellow expansion candidate, Cincinnati.
Memphis actually fits geographically into the new Big 12 better than most Big 12 schools. Texas Tech, for instance, is 650 miles away from the Big 12’s geographic center and nearly 1,500 miles from Morgantown. Due to this, the one thing Big 12 schools will not need to worry about is having their travel budgets increase if Memphis is included.
The flip side of location is something usually referred to as market. Originally I didn’t measure market because it only matters if the Big 12 is starting a conference network. In that situation, and that situation only, the location of the school has a significant impact on where carriage rights would be. The Memphis DMA (Designated Market Area) is the 50th largest in the US, about the size of New Orleans and Louisville, with 630,000 homes. Additionally, the state of Tennessee has 6.6 million residents, which would make it the second largest state in the Big 12 behind Texas.
Either way you add it up there is a positive benefit to Memphis’ location to the Big 12.
There are some concerns with the Tigers when we talk about the financial strength of a potential Power Five member.
The Big 12 is very financially strong due to high revenues and very low subsidies across its membership. However, Memphis is ranked below not only the Power Five average, but also the FBS and AAC average primarily due to them running $19 million in the red when you look at their profit after subsidies. Additionally their current revenue of around $50 million would be the lowest in the Big 12 by about $20 million.
Some of this can likely be made up with the higher media contracts and exposure received from playing on the biggest stage year in and year out. To do this, however, the University of Memphis will need to invest heavily in marketing, facilities, and coaching to be able to compete, consistently, at this level. That is difficult when you are already subsidizing considerably just to compete.
As it currently sits, the athletic department’s finances would be a liability to the Big 12.
It is all not bad news, however, as the Tigers have a solid foundation of fan support to draw from. Football has been a bit hit or miss, depending on success, and would definitely be at the low end of the Big 12 currently. Playing within the Liberty Bowl, however, gives them the ability to sell 60,000 seats. It has occurred in the past year as there were 60,000 people in the seats to watch them beat Ole Miss. However, Ole Miss is also an hour south of Memphis. It is hard to gauge if Memphis fans were filling all the seats or if they were bought out by visiting Rebels.
The concern about football does not flow into Men’s Basketball, where Memphis’ fan base really shines. They would come into the Big 12 and immediately take the second spot in attendance just below Kansas and above Iowa State. Like many of the schools on a line from Memphis to New York City, basketball is a passion of the area and it is quite surprising that they continue to have this high of attendance in basketball when they play in a shared facility with the NBA’s Grizzlies, but here we are.
If the University of Memphis could start to fill out the Liberty Bowl for football like they do the FedEx Forum, they could become a force in the area.
As much as I attempted to quantify as many categories to compare every school has some intangibles that either rise or lower their desirability as expansion candidates. The University of Memphis is definitely one of these schools. As you’ll see in a moment it scores rather well for a non-Power Five school, but not consistently high. However, with the backing of large corporate sponsors and a local bowl, they trend a bit more positively than their score would indicate. Especially if you factor in BBQ and the Blues.
FedEx has been very vocal about backing any Power Five conference who invite the Tigers with as much as $25 million a year in sponsorship revenue. The SEC has several high profile corporate partners, such as Chic-Fil-A, who pump in advertising during the post season. FedEx could definitely serve as another corporate pillar to increase the visibility of the conference and that is not a bad thing.
Additionally, the Liberty Bowl has become a key post season event for the Big 12 ever since 30,000 Iowa State fans descended on it in 2012. Since then it has transformed into a SEC/Big 12 Bowl and its image is increasing steadily. Having the stadium packed year round and in the post season with solid corporate backing could lead to an expansion of the stadium and the bowl game. This would also benefit not only the city of Memphis, but also the university and the Big 12.
A major negative intangible for Memphis, however, is their academic rating. They are not viewed by any academic organization as a top flight research facility, especially not when you compare them to Iowa State, Kansas or Texas, who will all look unfavorably on the association. In that regard, the University has pledged nearly a half billion in current capital improvements to its education facilities in an effort to boost their image. Whether it will work or be enough to entice the Big 12, however, is not something we’re able to quantify.
Adding all of the categories up, not just the featured ones we discussed, we get a glimpse of the value the University of Memphis could provide the Big 12 currently. It definitely has some blemishes, but its rank is in the top half of the FBS. Additionally, it is one of the stronger programs in the AAC, its current conference.
Compared to the Power Five, Memphis is a mere nine points below the Power Five Average. It is considerably further behind the Big 12 average by 28 points.
What this tells me is that Memphis has some peers within the Power Five that likely reside within the ACC, as they score similarly to teams like Boston College, Miami, Colorado, or Utah. If those teams can compete within the Power Five then there is no reason to think Memphis couldn’t as well.
It needs to be noted, however, that those teams are not anchoring their respective conferences. What the Big 12 needs most are large brand, power schools, who can elevate the entire image of the conference. Memphis is not going to do that out of the gates, but they could easily continue to grow into a school like Boston College or Louisville or Pitt; a solid addition to the conference who wouldn’t hinder other members from elevating their own status.
©2016 Number Monkey Media