Interesting ESPN Article About B10 Expansion

[GoodOl'Rutgers]

Reads to me like Nebraska Writer/Fan lamenting losing Oklahoma as a rival along with the auto-wins over Iowa State and Kansas.. and perhaps the loss of Kansas basketball.

Rutgers was discussed by the B1G way back when they added ttfp.

 

[WhiteBus]

I am not sure I quite understand the belief that Texas is not playing by the rules. The fact is that Texas is the straw that has always stirred the SWC and Big 12 on TV contracts. They always earned more from TV in those two conferences than the other schools (just as Miami did in the Big East because they are the key to the TV audiences). You could argue that the LHN compensates Texas for their value and the other teams benefit because of Texas’ lure to the networks for conference games. In fact, the Big 12 teams each earn more from TV/playoffs/shared revenue than the ACC and the PAC teams earn yearly. There is a benefit to be aligned with Texas, especially if you're an alumn from one of the cow colleges or even the two private schools.

From the beginning, conference realignment was always about two teams – Notre Dame and Texas. There is a reason those two teams have their own TV deals outside of a conference and why every conference wanted them. Every move by every team during the past half decade was because of what ND and UT decided about their own conference affiliation.

Notre Dame has a TV deal. Texas has their own network. There is a gigantic difference between the two!

 

[derleider]

Notre Dame has a TV deal. Texas has their own network. There is a gigantic difference between the two!

Not really. Its not like Texas owns the LHN.

Why in the world would Pac-12 invite a non-football 13th member to their conf?

All so Washington State Volleyball can fly to Austin for a match?

Or UT Men's Tennis team has to fly to Corvallis, Oregon?

No clue how ideas like this even pop up.

You add then for the same reason the ACC added ND - because even the non-FB sports for those schools are a good deal. And probably, you are holding out hope that the existing relationship will lead to FB joiing at some point.

Also - as owners of a flagging conference network, you hope that maybe it can help you get your network on in Texas.

I doubt they woudl do it, but I can see why they might. Remember - ND isnt particularly bear any ACC schools either (or at least wasnt when they joined - before UL was invited - its almost 400 miles from Pittsburgh).

 

[WhiteBus]

Not really. Its not like Texas owns the LHN.

You add then for the same reason the ACC added ND - because even the non-FB sports for those schools are a good deal. And probably, you are holding out hope that the existing relationship will lead to FB joiing at some point.

Also - as owners of a flagging conference network, you hope that maybe it can help you get your network on in Texas.

I doubt they woudl do it, but I can see why they might. Remember - ND isnt particularly bear any ACC schools either (or at least wasnt when they joined - before UL was invited - its almost 400 miles from Pittsburgh).

Huh? They have say on content and has the right to hire and fire every announcer.
You do know the difference between having 7 games a year versus your own 365 24/7 network???
There is no comparison!

 

[derleider]

Huh? They have say on content and has the right to hire and fire every announcer.
You do know the difference between having 7 games a year versus your own 365 24/7 network???
There is no comparison!

I meant to add more explanation to that and got caught up in the other thing.

Yes I do realize the difference. ND gets more money for its 7 games. And more unique individuals watch its 7 games than watch all of the 365/24 LHN combined. So basically - ND benefits alot more from its NBC deal than Texas does from controlling a network that no one watches.

But the main point that I left out was that they have a similar effect. The money and prestige from both allow ND and Texas to do pretty much whatever they want regarding conference affiliation. Without the LHN Teas would have joined the PAC12 in 2010 I think. Without the NBC deal (or a similar deal with another network) ND would be in the Big Ten right now.

 

[Scarlet_Scourge]

Why in the world would Pac-12 invite a non-football 13th member to their conf?
"All so Washington State Volleyball can fly to Austin for a match?"
Or UT Men's Tennis team has to fly to Corvallis, Oregon?"

MONEY, that's why.

As far as travel, absurd issue to bring up, how would that be any different than if Texas joined for all sports like the Pac-12 wanted them to?

UND already set the standard for this, remember the ACC said that would never accept any schools for anything other than all sports... until they did.

Plus, the PAC-12 already has affiliate members.

The PAC-12 really wants Texas to join for all sports, so they can see this as a gateway in.

 

[WhiteBus]

I meant to add more explanation to that and got caught up in the other thing.

Yes I do realize the difference. ND gets more money for its 7 games. And more unique individuals watch its 7 games than watch all of the 365/24 LHN combined. So basically - ND benefits alot more from its NBC deal than Texas does from controlling a network that no one watches.

But the main point that I left out was that they have a similar effect. The money and prestige from both allow ND and Texas to do pretty much whatever they want regarding conference affiliation. Without the LHN Teas would have joined the PAC12 in 2010 I think. Without the NBC deal (or a similar deal with another network) ND would be in the Big Ten right now.

Der. You are definitely missing the point. Texas has THEIR OWN NETWORK! They control content year round EVERY day. The money is only a small difference between the two. Recruiting, promotions, marketing 24/7 365.
No other school has a network. Not even close. Rutgers must pay big $ to run a TV ad on a single upcoming event. Texas gets paid to market the school.
Also you do understand once ESPN recovers their 300 mill investment to pay Texas than Texas will take 70% of all income generated by the station. Two years ago that looked unlikely. But recent deals with cable providers and DirecTV have improved the situation dramatically. The back end of this contract will mean serious $ for Texas

 

[derleider]

Der. You are definitely missing the point. Texas has THEIR OWN NETWORK! They control content year round EVERY day. The money is only a small difference between the two. Recruiting, promotions, marketing 24/7 365.
No other school has a network. Not even close. Rutgers must pay big $ to run a TV ad on a single upcoming event. Texas gets paid to market the school.
Also you do understand once ESPN recovers their 300 mill investment to pay Texas than Texas will take 70% of all income generated by the station. Two years ago that looked unlikely. But recent deals with cable providers and DirecTV have improved the situation dramatically. The back end of this contract will mean serious $ for Texas

Noi - they dont really control the content, because ESPN and Fox own the first rights to the major content. So in fact there are major contraints on what they can show, which means that no one watches the LHN.

You are overhyping it. I mean if the recruiting benefits are so great - well damn - they had the #3 class in 2011 the year it went on the air, the #2 class in 2012 when it as won the air and no one got it, and the #24 class in 2013.

You dont think NBC as official bullhorn for ND has been effective for them in recruiting and promotion? Does the fact that I own my own website which I control the content (think of the market I can do to the three people who ever look at it) makes me better than ND? Did the MWC having their own network make them better than the PAC12 who didnt? Of course not.

The main effect is that Texas gets a huge payday on top of the decent payday they get for their Tier 1 content via the Big 12. This allows them to stay where they are without being too concerned. If they were getting say $30 million (Current Tier 1 plus cut from a B12N) and the Big Ten was making $45 million, with the possibility of $50 million if Texas was on board, they might be getting a little more nervous.

Once ESPN pays off the $300 million investment. How in the world are they going to do that? They make roughly $25-30 million in carriage fees. Presumably ad revenue is almost nothing given the low viewership and low number of people who actually get the network. And Texas gets a big cut right off the bat. So if they ever DO pay off that $300 million (at least a decade into the 20 year deal), then Texas still isnt going to be making much more than the $15 million they are making now.

 

[Scarlet Shack]

derleider

RE: Oklahoma

Yes they did try this...but the dynamics are now changing since 2011.

The big12 is pretty much in a financial constant situation...with very little upside for revenue growth under their media rights deal

The big10 and sec are going to be way, way, way ahead of the big12 shortly....whereas in 2011, they were even.

The pac12...was actually on the same line with the big10 and the sec when they went to 12...but their situation is flattening out....and they are falling behind the big10 and the sec/ They will have a much bigger appetitie for expanding once that flat line is here and the prospects for growth are not there...without expansion.

Then their tune on expansion will change.

And their expansion only can go east. No one within their footprint has a 20 year chance of being a major contriubutor to that confrences growth.

They will make a play again...and it starts with OU or Texas.

Texas will balk ...they don't have to do anything until compelled to

The way to get at Texas is to get Oklahoma...and force UT's hand.

The question becomes...with the SEC jump in and invite UT and OU if they think this is going to go down.

THEY sure MIGHT

 

[WhiteBus]

Der I just don't understand that you can't see the value of having your own network? Is NBC marketing ND today, this month, since December? No.
I also don't understand your point on content. They control what is on. Yes some games are on other networks half of ND games aren't on NBC either.
The difference between a TV Deal and a network is night and day.
As for carrier fees they are climbing and the AT&T DirecTV will add millions

 

[Upstream]

Google is your friend. It's out there as well as comment about no out.

WhiteBus -- I've seen many articles/posts which say that ESPN does not have a cancellation option in its contract for the LHN. So I'm not going to ask you for links, since I'm sure you can produce several dozen.

However, I still don't believe the claim that there is no cancellation clause. It doesn't seem reasonable. I can't believe the Disney lawyers would agree to this contract without some cancellation option. And since the contract is confidential, I don't believe that anyone publishing that there is no cancellation option has actually read the contract.

So, despite all the claims that there is no out for ESPN, I don't believe it. I would be absolutely amazed if the actual contract provided no option for ESPN to modify payments based on performance, or cancel the contract under the right circumstances.

 

[MoobyCow]

Der I just don't understand that you can't see the value of having your own network? Is NBC marketing ND today, this month, since December? No.
I also don't understand your point on content. They control what is on. Yes some games are on other networks half of ND games aren't on NBC either.
The difference between a TV Deal and a network is night and day.
As for carrier fees they are climbing and the AT&T DirecTV will add millions

I think the point is it doesn't matter if no one is watching, and no one who isn't already a Texas fan is watching. What are 5-10,000 people watching off-season programming worth? Probably just about nothing. They are marketing the product to people who have already bought it.

 

[WhiteBus]

WhiteBus -- I've seen many articles/posts which say that ESPN does not have a cancellation option in its contract for the LHN. So I'm not going to ask you for links, since I'm sure you can produce several dozen.

However, I still don't believe the claim that there is no cancellation clause. It doesn't seem reasonable. I can't believe the Disney lawyers would agree to this contract without some cancellation option. And since the contract is confidential, I don't believe that anyone publishing that there is no cancellation option has actually read the contract.

So, despite all the claims that there is no out for ESPN, I don't believe it. I would be absolutely amazed if the actual contract provided no option for ESPN to modify payments based on performance, or cancel the contract under the right circumstances.

Since I'm at work I cant post a link. But I have linked the non eradicated version on here before. It's easy to find an eradicated version but it took some work to find it but it is out there.
At this point I don't care if anyone believes it or not. It has become irrelevant as ESPN is at the break even point now with the increase in fee income.
I guess I should just let the expansion fanatics have their fun making their pods. But any talk of Texas going anywhere is just dumb.

 

[rutgersguy1]

Really, I don't remember ever seeing that here. I'd be interested in you posting it again when you get the chance if you don't mind. It was section 14B of the contract that was redacted. Thanks.

 

[Upstream]

Since I'm at work I cant post a link. But I have linked the non eradicated version on here before. It's easy to find an eradicated version but it took some work to find it but it is out there.
At this point I don't care if anyone believes it or not. It has become irrelevant as ESPN is at the break even point now with the increase in fee income.
I guess I should just let the expansion fanatics have their fun making their pods. But any talk of Texas going anywhere is just dumb.

If you have a link to a non-redacted version of the contract, I'd be interested in seeing it. I can only find the redacted version (and in the redacted version, only one clause is redacted: 14.B. Termination).


But according to clause 14.C., ESPN can terminate the agreement if UT is unable to furnish the games it is required to provide. So if ESPN really wants out of the agreement, it could "hope" for the collapse of the B12 which could force UT to another conference which would not allow UT to license games to the LHN.

 

[srru86]

I really miss the days of debating on whether old dominion would be a good partner to bring into the big east with east Carolina

 

[topdecktiger]

I would be absolutely amazed if the actual contract provided no option for ESPN to modify payments based on performance, or cancel the contract under the right circumstances.

There is. Texas gets paid a base amount. When the expenses get paid off, Texas gets more money, plus they get more based on the performance of the network. So Disney actually did that.

I found this link about the LHN. It doesn't seem to be doing so well. They have 6.5 million subscribers in Texas, paying $0.29 a month. They have 13.5 million outside Texas paying $0.02 a month. So they are bringing in $20-odd million a year, which doesn't sound terrible, but some of that has to be split with Texas, plus ESPN has some overhead since they have to rent out facilities in Texas.
http://www.foxsports.com/college-fo...-longhorn-network-is-all-hat-no-cattle-051115

 

[WhiteBus]

There is. Texas gets paid a base amount. When the expenses get paid off, Texas gets more money, plus they get more based on the performance of the network. So Disney actually did that.

I found this link about the LHN. It doesn't seem to be doing so well. They have 6.5 million subscribers in Texas, paying $0.29 a month. They have 13.5 million outside Texas paying $0.02 a month. So they are bringing in $20-odd million a year, which doesn't sound terrible, but some of that has to be split with Texas, plus ESPN has some overhead since they have to rent out facilities in Texas.
http://www.foxsports.com/college-fo...-longhorn-network-is-all-hat-no-cattle-051115

Google 2015 news on the LHN. Things have improved. Also the AT&T merger is huge. Some of the inside stories are from June of this year

 

[topdecktiger]

Google 2015 news on the LHN. Things have improved. Also the AT&T merger is huge. Some of the inside stories are from June of this year

No, it hasn't improved. I did Google it like you said, and there was nothing to dispute what was published in the article that I linked. Texas gets $0.29 per subscriber in Texas, and $0.02 out of state. ESPN itself claims LHN distribution at 20 million subscribers, which is right in line with that was published in the article. Face it, the LHN simply isn't the financial windfall that some initially said it would be.

That's not surprising. It's a one-school network that only has a handful of ballgames to televise each year. That's simply not enough to be successful.

 

[AntiG]

No. The Big Ten has zero interest them. No one wants them. As big of a program they are they are the biggest pain in the asses to other conference mates. They are the bully of the Big 12.

The B1G has been talking to Texas since the 90s. Of course they would take them.

 

[WhiteBus]

The B1G has been talking to Texas since the 90s. Of course they would take them.

No they won't. Not having their own network.
Really some of you have no clue. Texas isn't going anywhere

 

[derleider]

Google 2015 news on the LHN. Things have improved. Also the AT&T merger is huge. Some of the inside stories are from June of this year

How much could they have improved. There are only around 7.5 million cable/fiber.dish households in all of Texas.

 

[WhiteBus]

How much could they have improved. There are only around 7.5 million cable/fiber.dish households in all of Texas.

Again Google is your friend. Stop being lazy and read up on the subject. It not just about Texas. DirecTV is paying .02 a month for every subscriber nationwide. So are other cable providers. Plus there are 6.5 million Texas subscribers paying .29 a month in Texas. Last year ESPN made $25.8 million just on fees from the network.

 

[Upstream]

Since I'm at work I cant post a link. But I have linked the non eradicated version on here before. It's easy to find an eradicated version but it took some work to find it but it is out there.

Were you able to find your link to the non-redacted contract. I'm interested in seeing it.

 

[sherrane]

WhiteBus -- I've seen many articles/posts which say that ESPN does not have a cancellation option in its contract for the LHN. So I'm not going to ask you for links, since I'm sure you can produce several dozen.

However, I still don't believe the claim that there is no cancellation clause. It doesn't seem reasonable. I can't believe the Disney lawyers would agree to this contract without some cancellation option. And since the contract is confidential, I don't believe that anyone publishing that there is no cancellation option has actually read the contract.

So, despite all the claims that there is no out for ESPN, I don't believe it. I would be absolutely amazed if the actual contract provided no option for ESPN to modify payments based on performance, or cancel the contract under the right circumstances.

The Longhorn Network is failing because of its limited distribution. ESPN claimed ownership of the network and assumed 100% of the distribution responsibility. They were competing with FOX for the rights to this network. FOX offered Texas a similar deal to the BTN, whereas it was a partnership with FOX owning 51% with both parties assuming some risk. So you are looking for a way for ESPN to cancel the contract because of ESPN's failures while Texas acted in good faith. Would you have agreed to that?

 

[Upstream]

The Longhorn Network is failing because of its limited distribution. ESPN claimed ownership of the network and assumed 100% of the distribution responsibility. They were competing with FOX for the rights to this network. FOX offered Texas a similar deal to the BTN, whereas it was a partnership with FOX owning 51% with both parties assuming some risk. So you are looking for a way for ESPN to cancel the contract because of ESPN's failures while Texas acted in good faith. Would you have agreed to that?

Of course. It is not unreasonable to expect both parties to share in the risk. Also, ESPN has responsibility for distribution, but not unilateral control of distribution. The promotion plan, content plan, and budget plan for the network are mutually agreed to by ESPN and UT. And UT get guaranteed payments plus up to 70% of adjusted gross revenue once certain financial targets are met. It is not reasonable for UT to have only upside and no downside.

 

[topdecktiger]

Again Google is your friend. Stop being lazy and read up on the subject. It not just about Texas. DirecTV is paying .02 a month for every subscriber nationwide. So are other cable providers. Plus there are 6.5 million Texas subscribers paying .29 a month in Texas. Last year ESPN made $25.8 million just on fees from the network.

You think $0.02 is good? LHN has 13.5 subscribers outside of Texas. At $0.02, that works out to $3.24 million a year. That's not big money in the TV industry.

ESPN did not make $25.8 million from LHN last year. That's just revenue, not profit. You have to subtract out the cut for Texas from that, before you get to the actual profit ESPN made.

On top of that, you are leaving out a key element. Texas is not the only player in this. IMG also get a cut. In reality, the deal is technically between ESPN and IMG. That's because IMG already had a contract for Texas's Tier 3 rights. So all of the content for the LHN was owned by IMG. If you read the contract, ESPN actually just makes a payment to IMG, and IMG splits that payment with Texas. In other words, from that $25.8 million, you have to subtract out the $15 million or whatever Texas gets, plus whatever IMG gets. That $25 million basically gets cut in half for ESPN, plus whatever expenses they have. It's not a huge moneymaker.

 

[topdecktiger]

Of course. It is not unreasonable to expect both parties to share in the risk. Also, ESPN has responsibility for distribution, but not unilateral control of distribution. The promotion plan, content plan, and budget plan for the network are mutually agreed to by ESPN and UT. And UT get guaranteed payments plus up to 70% of adjusted gross revenue once certain financial targets are met. It is not reasonable for UT to have only upside and no downside.

I just posted this in another reply, but you also have to take into account that IMG is also a partner in this. They already had a Tier 3 contract with Texas, so IMG had to be part of the deal for the LHN to have any content. That gummed up the works.

Also, the SECN works the same way. ESPN has 100% ownership of the network, and thus 100% of the risk.

 

[WhiteBus]

You think $0.02 is good? LHN has 13.5 subscribers outside of Texas. At $0.02, that works out to $3.24 million a year. That's not big money in the TV industry.

ESPN did not make $25.8 million from LHN last year. That's just revenue, not profit. You have to subtract out the cut for Texas from that, before you get to the actual profit ESPN made.

On top of that, you are leaving out a key element. Texas is not the only player in this. IMG also get a cut. In reality, the deal is technically between ESPN and IMG. That's because IMG already had a contract for Texas's Tier 3 rights. So all of the content for the LHN was owned by IMG. If you read the contract, ESPN actually just makes a payment to IMG, and IMG splits that payment with Texas. In other words, from that $25.8 million, you have to subtract out the $15 million or whatever Texas gets, plus whatever IMG gets. That $25 million basically gets cut in half for ESPN, plus whatever expenses they have. It's not a huge moneymaker.

Never said it was a huge money maker and it surely well never hit the mark that it was designed for but it isn't losing money anymore so it will probably continue after the 20 year agreement.

 

[Scarlet16E]

The B1G has been talking to Texas since the 90s. Of course they would take them.

Only if Texas is an equal partner to the other members.
And Texas would never do that.