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We have the lowest (or 2nd) lowest athletic budget in the Big 12 and one of the top 5 (guessing) lowest athletic budgets in all of BCS conferences. We are in a small population state with three large in state schools, surrounded by states with only one major division one program. (Mizzou, Minnesota, Wisconsin, Nebraska, Illinois to a smaller degree).
If we had one major school (ISU/UNI/Iowa) and combined the fan support/money - we'd have a killer athletic program when you consider the way college sports dominate the state.
It all comes down to money, you get what you pay for and ISU pays to be a bottom level program.