According to an IU release, reproduced in full by the Herald Times, Indiana and Kentucky will not play each other in the 2012-13 regular season. IU and UK had played annually for 43 consecutive seasons, beginning in 1969-70. As has been discussed publicly, Kentucky was insisting that the series be moved to neutral courts, while IU was adamant that the series be played at campus venues.
I am somewhat surprised that it has come to this. I assumed that one side or the other would blink. As mentioned in previous posts, I am conflicted on the home/neutral issue. On one hand, I enjoyed the neutral site games when the series was played in Louisville and Indianapolis from 1990-2005 (or, I should say that I enjoyed the games in Indy--I never attended one in Louisville). Exactly half of the all-time matchups between IU and UK have been played on neutral courts, so playing the game off campus would not be unprecedented. I'm a bit surprised that IU was so dug in on this issue. The only reason the games returned to campus sites in the first place is because of some scheduling mixup at Freedom Hall for the 2006-07 game.
On the other hand, after the IU-UK game in December and numerous reports of overzealous fan behavior, there was plenty of sanctimony from the UK fan base about not playing in Assembly Hall again. As I wrote at the time, there were enough reports and Youtube videos that I think it's almost certainly true that too many IU fans were over the line. On the other hand, the perfect storm of a resurgent IU team, a student body that had never tasted basketball success, and a top-ranked UK team. That unique combination of factors is not likely to repeat in the near future, and IU certainly could have enhanced security if necessary to assuage UK's concerns. If Kentucky was advancing this change as a safety/security necessity, then it's easier to understand Tom Crean and Fred Glass telling them to get lost. If IU stuck with UK even when the Wildcats' corruption kept the game off of television in the early 1990s, then UK could have cut IU a little slack on the issue of fan behavior.
This doesn't leave IU in a bad position by any stretch. IU will play UCLA and/or Georgetown in the Barclay's event at the Nets' new arena in Brooklyn, Butler in the Crossroads Classic in Indianapolis, and a top flight ACC opponent (presumably in Bloomington after two straight road games) in the Big Ten/ACC Challenge. On the other hand, given everything that Glass says in the linked release about playing games like this at home, I hope he has something in line (this ESPN article suggests that the Kansas possibility fell through). The Big Ten schedule will be tough, but a preseason top 5 team should play a legitimate non-conference road game.
I'm sure this won't be the end of IU-UK forever, but it's unfortunate to see the series go away just as both programs appear to be firing on all cylinders at the same time, something that hasn't been the case since the early 1990s. Neither team needs this series, but I think that college basketball as a whole is a bit poorer for its demise.