By Michael Hiestand, USA TODAY
Updated
The first TV sports channel devoted to a college sports powerhouse is bound to raise questions.
By Brendan Maloney,, US Presswire
Cash cow: Texas stands to collect $15 million per year as part of its Longhorn Network deal.
By Brendan Maloney,, US Presswire
Cash cow: Texas stands to collect $15 million per year as part of its Longhorn Network deal.
The Longhorn Network, the ESPN-owned channel that will broadcast round-the-clock coverage of the University of Texas when it premieres Aug. 26, already has raised plenty — along with creating controversy.
The Longhorn Network (TLN) has sparked debates from whether its original plan to air Texas high school games gives the school an unfair recruiting advantage to whether Texas getting itself in the TV listings might tempt institutions of higher learning to follow suit.
The NCAA has called a TV summit in Indianapolis on Aug. 22 to discuss the issue of high school games and other elements of conference and school networks. This is part of an ongoing dialogue "so the membership can make a policy decision that will best serve the membership over the long haul," Kevin Lennon, NCAA vice president of academic and membership affairs, said Thursday.
The college television landscape is changing. The Big Ten Network is 4 years old. Notre Dame has said it was interested in starting a network, despite its exclusive football deal with NBC. Oklahoma has talked in general terms about exploring some kind of presence. The newly expanded Pacific 12 Conference is taking an ambitious swing at a multichannel network. The Mountain West Conference's channel, The Mountain, is available on some cable and satellite packages.
This will not work for every team or conference. Beyond the question of how much interest there might be, Paul Swangard, who oversees the University of Oregon's sports business studies, notes current conference TV deals prevent even big-time sports schools from starting their own channels. But, he says, "This will not be the only school channel. In the increasing state of haves and have-nots in college athletics, there will be an increasing number of schools who say they need one."
ESPN will pay Texas about $11 million annually and another $4 million to the school's marketing agent IMG from a 20-year deal sealed last year. The question is whether the new Worldwide Leader in Texas sports is now in the infomercial business. Texas will have the right to fire TLN announcers that don't "reflect the quality and reputation of UT." But, says Burke Magnus, an ESPN senior vice president, "people are jumping to the worst possible conclusion about this because there's fear of the unknown. In our mind, and Texas has told us this, it's just a protection for the most extreme circumstances. It's not for an announcer suggesting the defensive coordinator should be fired."
For the Big 12 Conference, which let Texas create a channel to keep it from joining defections last year that threatened the Big 12's existence, the question is whether it has reined in the Longhorns.
The ESPN-Texas deal gives ESPN first-negotiation rights if the Longhorns go independent.
"It's unhealthy for that conference," says A.J. Maestas, a consultant with Navigate Marketing who has advised pro and college leagues and teams. "Texas is already getting a disproportionate amount of the Big 12 TV money, and this will create a more unlevel playing field. I think the Big 12 will fall apart because of this. Then who will Texas play against in, say, softball and volleyball?"
Indeed, Texas Gov. Rick Perry, a Texas A&M alum, said this week that his school was having discussions about joining the Southeastern Conference. Aggies officials raised concerns about the impact of the Longhorn Network. Nebraska and Colorado left the league last year, nearly splitting up the conference, which is down to 10 teams.
The niche channel trend
The concern that college sports powers would cut their own TV deals and become more powerful goes back at least to Notre Dame getting NBC to carry its home games in 1991. But since then, the Irish, who have won eight national football titles since 1936, haven't won a national title and lost nine consecutive bowl games before winning two in the last three years. And the team isn't a huge TV draw: Last year, its games on NBC averaged 2.1% of U.S. households — less than one-third the audience of college football's top-rated games.
So while there isn't much precedent for a college power getting its own channel, TLN fits in with a broader TV sports trend: The proliferation of niche channels largely airing events, surrounded by filler programming, that are available because they otherwise wouldn't get on TV.
Niche channels were common in pro sports before colleges jumped in four years ago with the Big Ten Network. BTN, majority-owned by the conference with an investment stake from Fox, reaches across populous states. It's filled with talk shows and niche sports — and a sampling of men's football and basketball that has enabled it to pay each conference school about $9 million annually. The Pac-12, which welcomes Colorado and Utah this season, recently announced it would start its channel next year and add a targeted twist: supplemental local channels featuring multiple schools — such as showing Oregon and Oregon State sports on one channel in their state.
While conferences preclude school channels, Texas became an exception through its leverage when the Big 12 faced defections from Nebraska (to the Big Ten) and Colorado, plus speculation that Oklahoma and Texas A&M might join the SEC. Texas leaving for, say, the Pac-12, might have been crushing: The state has about 8 million TV households — more than the New York City TV market — and Longhorns merchandise is the top seller among colleges, Collegiate Licensing Co. says. Texas, which has won four national football titles since 1936, has an undergraduate enrollment of about 38,000.
The Big 12 granted the Longhorns and its other nine schools freedom to create channels. The Longhorns staying put helped the Big 12 last spring land a 13-year cable deal with Fox for $90 million annually — up from $20 million in its old Fox deal — on top of its $60 million annually from its ESPN/ABC deal that runs through 2016. Says ESPN's Magnus: "The channel was made a year ago when Texas decided to stay in the conference. Whether it was with ESPN or not, Texas was going to have a channel."
Big 12 Commissioner Dan Beebe has said TLN is just the first school channel "out of the gate" and he expected others to follow; Oklahoma has expressed interest. But they won't have Texas' population size, notes Maestas: "The Big 12 is unique in that its schools can do this. Oklahoma and maybe Missouri will try, but the models couldn't sustain them. … Texas' channel will be a success — and a cautionary tale to other conferences to not leave room for these channels."
Subscriber fees trump ratings, ad fees
Well-known sports shown on ESPN, such as pro tennis, can draw under 1% of U.S. TV households.
So the big deal for cable channels is not the small clusters of viewers they manage to attract and sell to advertisers but the subscription fees they collect from cable operators. ESPN, which charges about $4 a subscriber, an industry high, is asking about 30-40 cents a subscriber for TLN. With TLN's subscriber fees likely to produce more than 90% of its revenue, Maestas suggests, any ad sales resulting from anybody watching TLN will be "just the cherry on top."
Since distribution deals for new channels are often cut at the last minute, ESPN's Magnus won't estimate how many households TLN will have at launch. A key selling point in signing operators will be TLN airing two football games annually — this year it's Texas hosting Rice on Sept. 3 and an unnamed game — as well as 10-12 men's basketball games not included in national TV packages.
"Think of the channel as a mall, and football and basketball games are your anchor stores, with the other sports and shows being Yankee Candle stores, smoothie shops and pretzel stands," says Robert Thompson, a Syracuse professor for television and pop culture.
TLN also wanted to fit in Texas high school football games — with ESPN programmer Dave Brown suggesting Texas recruits could get "spotlight treatment" — until schools cried foul. Texas said NCAA rules weren't clear on the issue before the Big 12 decided on at least a one-year moratorium for "an extended period of analysis." On Thursday, though, Lennon said the NCAA board of directors endorsed the staff's initial interpretation that recruiting regulations preclude broadcasts of youth programs.
The worry, Iowa State athletics director Jamie Pollard says, is that "it sends us down a slope. We're in an era of rapidly changing methods to deliver our product. How do we keep our arms around it?"
Says Jim Haney, executive director of the National Association of Basketball Coaches, "How do you balance providing exposure with creating recruiting chances? … Once it starts, it would be difficult to rein in."
Chuck Neinas, former commissioner of the then-Big Eight Conference and now a consultant, says letting college channels carry high school games will create an intractable problem — "we will not be able to unravel that Rubik's Cube."
TLN shows announced include Longhorns Legends, Texas' Greatest Games and Texas' Greatest Athletes. Consultant David Carter with the Sports Business Group says TLN will be "a brochure for the school dressed up as a cable channel."
And while ex-Texas A&M running back Greg Hill's alma mater isn't happy about its rival having its own channel, Hill suggests it makes sense.
"Texas is smarter than we are," Hill told the Fort Worth Star-Telegram. "They're going to put on everything great about the University of Texas, and kids are going to want to be a part of that."
Magnus says ESPN's new $13 million on-campus studio won't be a propaganda hub. He says TLN is analogous to the New York Yankees' YES Network — "this isn't uncharted territory." And he suggests Texas shouldn't expect preferential treatment in ESPN's overall coverage: "We have relationships with just about every sports league, and it doesn't impact our journalistic mission."
Magnus says TLN will give Olympic-style sports a shot to be on TV. Texas President William Powers has said he expects the 10% of TLN fare unrelated to sports to be "high level —Discovery Channel. History Channel sort of stuff."
Texas football coach Mack Brown has said he needs to figure out how much access TLN will get "and not hurt our chances to have an edge to win."
Magnus says TLN doesn't expect special access. Except, he says, "at practice. But we won't cover practices, just use them as backdrops. Mack won't allow an overhead camera to show plays they're working on."
Still, the school has plenty of motivation to be mediagenic. If ESPN ever recoups $295 million in profits, Texas will collect 70% of future profits.
And ex-CBS Sports president Neal Pilson suggests the brand isn't going away: "Fifty years from now, people will still be loyal to schools like Texas."
Contributing: Jack Carey, Andy Gardiner and Steve Wieberg
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