Culture / Sporting Life

UH to Pay $18 Million in Exit Fees to Join Big 12 Early — Money For Athletic Heaven and a Much Brighter Financial Future

On UH's New Power 5 Reality, University Changes and Billionaire Tilman Fertitta's Big Assist

BY // 06.10.22

University of Houston athletic department officials and coaches have been preparing to start Big 12 play in the fall of 2023 for months. Few doubted that an agreement to make that happen would be reached. UH basketball coach Kelvin Sampson admits he’s been looking at this upcoming season as his last in the American Athletic Conference for a while now.

Still, the official announcement of a deal with the AAC, one that includes exit fees of $18 million, that assures the 2023 timing will happen is no small step forward for the University of Houston. And college sports in Houston.

“This is huge,” UH chancellor and president Renu Khator says on this Friday, announcement day. “This is a great thing for Houston. This is an opportunity to showcase the university, but also the city. Our food. Our culture. It’s wonderful.”

The $18 million in exit fees is far less than the $45 million figure that AAC officials initially floated out to conference friendly reporters, but few thought that figure was realistic. UConn paid $17 million to depart the conference early in 2019.

UH’s $18 million in exit fees will include the original $10 million that the school’s contract with the conference calls for — and $8 million in additional fees for leaving early. The contract required a 27 month notice for departing schools.

The $10 million is due by 2025 and the additional $8 million must by paid out within 12 years starting in 2025.

The fact that the University of Texas and Oklahoma would desperately love to leave the Big 12 for the SEC in time for the 2023 football season too, but are having trouble working out an exit deal with the conference, makes UH’s deal with the AAC even more impressive.

“For us this is a big day because it helps define our future as far as assurability when things start,” UH athletic director Chris Pezman says. “. . . We’ve been working towards this, but the sense of urgency becomes more heightened. Because now we know when it starts.

“It’s time to go. So here we go.”

Pezman is quick to point out that the $18 million in exit fees will come from the athletic department budget rather than general university funds.

“The chancellor, our board, our administration, we all understand that for the financial stability of and sustainability of our athletic department, we have to be able to stand on our own two feet,” Pezman says. “That’s what’s important about this move.

“It helps stabilize our financial future and helps put us into a position of sustainability for our university.”

The move to the Big 12 does not just mean a much higher national profile for the University of Houston, and regular games against fellow Texas schools like Baylor, TCU and Texas Tech. It brings the riches of a Power 5 conference TV contract. The Big 12 paid its members schools a record $42.6 million on average per school in the last year.

Pezman says UH will start receiving a full share of Big 12 revenues in its third year in the conference — the 2025-2026 year. That marks a huge increase over the little more than $8.5 million Houston collected from the AAC last year.

UH’s Big 12 Growth Plan

It’s a good time to be in UH athletics, a time of wild growth for the entire university. All the construction on Cullen Boulevard right through the heart of campus, the new law buildings that are almost finished, the new hotel under construction, shows that. But so does the college’s application numbers.

Khator notes that the University of Houston received 38,256 freshmen applications this year. After accepting 5,600 freshman last year, the school is poised for a potential record class.

“This is a great thing for Houston. This is an opportunity to showcase the university, but also the city. Our food. Our culture. It’s wonderful.” — UH president Renu Khator on the Big 12 move

 

Houston’s university — the school that’s often been dismissed by haughty University of Texas and Texas A&M graduates over the years, the one that’s often felt its fighting against the world (with Houston billionaire Tilman Fertitta as its most important ally and Big 12 door open) — is entering a new era in many ways.

“This is a new day,” Pezman says. “We’re moving on . . It’s about our future and where we’re going. Not where we’ve been. You kind of tip the cap and remember what we experienced in our history.

“You’ll always have a chip on your shoulder. But this is about today and tomorrow. And where we’re going.”

UH football building The University of Houston Cougars met Southern Methodist Univesity, Saturday October 30, 2021 at TDECU Stadium
The University of Houston’s facilities are about to receive another major upgrade with the addition of a new football building. (Photo by F. Carter Smith)

Having both men’s basketball coach Kelvin Sampson, the architect of that Final Four breakthrough and Elite Eight followup, and football coach Dana Holgorsen, who put together a breakthrough 12-2 season in 2021, signed to longterm contracts seems to give Houston plenty of power stability as it prepares to enter the new league.

“We used to worry about losing coaches,” Pezman says of the not-so-distant past. “We found a way to make a commitment to them that they know they’re important to us and vice versa. So that gives us that continuity to look at our primary programs.

“Coach Sampson and Coach Holgorsen are locked in for six years each, a very substantial period of time.”

Pezman says that the new football operations building — which PaperCity first broke the news of back in November — should have a construction timeline (and a hoped for future completion date) revealed within the next 60 days or so. Which will be just the latest big facility improvement for Cougar athletics in a decade of major building.

Still, Khator will tell you this Big 12 move — and the new guaranteed certainty that it will happen in the fall of 2023 — reaches far beyond sports. She can see that in all the presidents from other universities across the country who have reached out to her.

“It’s not just an athletic move,” Khator says. “The number of congratulatory calls I’ve received from my fellow presidents all over the country. We are now in a very different kind of spotlight.”

A Big 12 spotlight — one that’s coming just as fast as UH planned on.

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