Well, maybe the University of Texas won’t be taking over the world after all. The Sports Business Journal is reporting that ESPN and Fox are essentially in a dead heat in winning the right to partner with Texas on a new Longhorn television network. Some interesting details gleaned from the article:
- It doesn’t appear that Texas is attempting to take back more TV rights to football and basketball games from the national Big 12 contracts, which means they are essentially building this network based upon the rights that they have now: typically one football game per season and a handful of non-conference men’s basketball games. As a result, the network will have a heavy reliance on non-revenue sports, pre/postgame programming and coaches’ shows.
- Texas actually won’t have any equity stake in the network. Whoever is the winning bidder will own 100% of the network and then pay a rights fee to Texas that the school expects to be approximately $3 million per year. This is similar to the deal that the Mountain West has with Comcast for the mtn. The Big Ten, in contrast, has 51% ownership of the Big Ten Network and pays out twice as much as the Texas estimate to every single one of its schools (approximately $6 million per year per school).
Honestly, it’s a bit underwhelming and definitely not going to have the impact that a lot of people predicted. If Texas doesn’t try to take more football and men’s basketball games in-house, then the network will really have no impact on the Big 12’s national TV contract position (beyond the impending losses of Nebraska, Colorado and a title game). The Longhorn network is really just Texas attempting to monetize the TV rights that it already owns as opposed to taking any additional inventory away from the other Big 12 schools.
The fact that Texas won’t have any equity stake in its network is also fairly surprising. Granted, this virtually eliminates any downside risk for the school, but it also caps the upside where it won’t benefit from rising subscriber fees and advertising revenue in the same manner as the Big Ten Network. A number of Texas alums have told me that the school had started spending on TV network infrastructure, so I’m puzzled by how there’s no equity involved.
Finally, the revenue figures are not real game changers at all, as it’s nowhere near what the Big Ten Network provides all of its schools in an equal revenue sharing system. Considering that Fox Sports Net recently agreed to pay the Texas Rangers around $80 million per year (effectively a massive Godfather offer in order to prevent the MLB franchise from starting its own competing network and note that this was signed before the Rangers’ World Series run), I would’ve thought that a Longhorn network would make quite a bit more than $3 million per year, especially when it seemed to be such a point of public consternation for other Big 12 schools.
In fact, if the value of the Longhorn network is really going to be only $3 million per year, then it’s obvious to me that this network had absolutely nothing to do with (1) the near-collapse of the Big 12, (2) the ultimate rejection by Texas of the Pac-16 proposal or (3) Texas refusing to consider to join the equal revenue sharing leagues of the Big Ten and SEC, both of which would’ve paid a heck of a lot more with a lot less heartburn. As dysfunctional as the Big 12 was and still is, an entire league was not going to break up over a $3 million TV package. I highly doubt that either Texas or the Pac-10 killed the Pac-16 deal over this amount of money, either. As I’ve also said many times before, if Texas really wanted to maximize its TV revenues, then it would’ve just joined either the Big Ten or SEC, and the relative low amount of revenue coming from the Longhorn network proves this point.
At the end of the day, the ownership structure of this network and financial figures point to the powers-that-be at Texas simply wanting the Big 12 to live. Maybe it was fear of the wrath of Texas-state politicians. Maybe it was the real threat of Texas A&M heading off to the SEC. (Look at this comment from last December from knowledgeable UT alum reader Longhorn Lawyer and the last 3 paragraphs outlining the school’s position about A&M going to the SEC – it’s fairly instructive, especially considering it was made loooong before the Pac-16 proposal was even dreamed up.) Maybe the Texas dream really has been being able to control something to the effect of an SWC plus Oklahoma league. Whatever it is, the relatively low revenue stream for the Longhorn network means that the Texas decision for staying in the Big 12 goes beyond financial issues and that the school’s end goal is definitely not independence.
FRANK THE TANK’S FOOTBALL PARLAY
Work obligations prevented me from getting my BlogPoll ballot in on time this week, so we just have some quick picks today (home teams in CAPS and odds from Bodog via Yahoo!)
- Purdue (+17) over ILLINOIS
- NOTRE DAME (-8.5) over Tulsa
- Michigan State (+6.5) over IOWA
Frank the Tank’s College Football Parlay Record
Last Week: 2-1
Illini Games for the Season: 4-2
Overall Season: 9-14-1
- Jaguars (+6) over COWBOYS
- RAMS (-3) over Panthers
- Steelers (+1) over SAINTS
Frank the Tank’s NFL Football Parlay Record
Last Week: 2-1
Bears Games for the Season: 3-4
Overall Season: 11-10
Have a great Halloween weekend!
(Image from TexasSports.com)