It is an interesting rumor - it would surprise me, but not completely shock me. It's at least in the plausible category (unlike those old rumors of the Big 12 going after Florida State). The threshold question for me is whether the Big 12 wants to expand at all in the first place.
To be sure, football still does matter here. You have to look at the whole football-related picture just like Rutgers. Rutgers certainly doesn't have a great on-the-field football history. However, the state of New Jersey was the largest non-Sun Belt/Southern football recruiting base (which, along with TV markets, is what commissioners like Jim Delany is really referring to when they talk about "demographics") that wasn't already in the Big Ten. #2 on that list was the state of Maryland. Those certainly weren't the ONLY factors involved (as the TV markets were the number one consideration for the B1G), but they were big ones that university presidents and ADs have actually been very open about. So, it was still a football-driven expansion for the Big Ten even if marquee football programs weren't necessarily added.
In the same vein, the Memphis area is also one of the strongest per capita football recruiting regions in the country. In fact, both Memphis and Cincinnati would instantly be the two best football recruiting areas in the Big 12 outside of the state of Texas.
At the same time, Memphis has shown to be at least football *competent* this year. Any school with a great hoops fan base (which includes UConn, Memphis, UNLV, New Mexico, San Diego State, etc.) combined with competent football becomes more intriguing in conference realignment. The football program just can't be down in the dumps horrific or else even the greatest basketball in the world can't compensate for that. Too many schools that I've listed above have the great hoops fan base, but not the competent football.