TGTSTG Bonus Content: The Saga of the Longhorn Network

ESPN and Fox had saved the Big 12. Their commitment to pay the Big 12 the same with 10 schools as with 12 schools, coupled with virtually the entire college football world outside the Pac-10 converging to try to prevent conference realignment Armageddon, enabled Big 12 commissioner Dan Beebe to offer Texas, Texas A&M, and Oklahoma enough of a financial inducement to stay in their conference and not defect to the Pac-10. Texas athletic director DeLoss Dodds effectively said as much, though not in so many words. Though a Longhorns network was “really important” to the school, and a move to the Pac-10 would have precluded that by forcing the school to surrender their rights to the conference for their own network, it wasn’t the “deal-breaker” to back out of the deal. Chris Plonsky, who headed the school’s women’s sports, similarly said that the ability to start a network wasn’t the “linchpin” that kept them in the Big 12, but it was a “very important variable”. Certainly it was a key element allowing the math to work out, and was widely perceived as the bedrock on which the foundation of the entire conference would be built going forward. Unlike other conferences that could plausibly claim to have an all-for-one, one-for-all mentality, the Big 12, it was just made clear, existed only because Texas allowed it to exist, and Texas allowed it to exist because it could collect much more money than the conference’s other schools, with many millions staked on a Longhorn network, an entire network dedicated to one school and potentially beamed directly into the campuses of many of its conference rivals, that would prevent the Big 12 from even considering going down the conference network path their peers were headed down. But Texas, despite having one of the biggest brand names and fan bases in college sports, was about to learn starting their own network would not be easy.

If anyone was as disappointed in the outcome as Larry Scott and the Pac-12, it was probably cable operators and satellite providers across the country. The formation of a handful of superconferences at least would have kept to a minimum the number of networks each of them would have tried to launch. Now, however, Texas, Oklahoma, and even Missouri were each talking about launching their own networks, and it wasn’t clear whether or not SEC or ACC schools would try to follow suit. There seemed to be a sense that launching a network was an automatic ATM guaranteed to let the money flow in. Cable operators wanted to make clear that things were not that easy and that they would take steps to protect their bottom line, and potentially, their customers’ bills. And they intended to make an example out of a Longhorn network.

Perhaps sensing the uphill battle ahead, Texas planned to invest no money in the enterprise and carry no risk if it failed. It would find a partner that could help with distribution and was willing to shoulder all the risk. Fox seemed to be the early leader in the clubhouse; it held most of the rights a new network would need and could conceivably use FSN’s existing deals with cable operators and satellite providers to get the network widely distributed right from the start. Fox also had experience partnering with the Big Ten on the Big Ten Network, something the other major contender, ESPN, had no experience in. But ESPN was able to make a renewed push to score the rights to, and full ownership of, the Longhorn Network. It would have to launch the network from scratch and go through all the bruising battles with cable operators, but as it turned out, if Texas did have to launch the network from scratch, it couldn’t ask for a better partner than ESPN.

The road was very bumpy to start. Even before engaging in high-level negotiations with cable operators, the network had an early misstep when ESPN decided it would be a good idea to air high-school football game, only for other schools to wonder whether that might violate NCAA recruiting rules or otherwise give Texas a recruiting advantage above and beyond that represented by the network itself. That, coupled with ESPN securing the rights to a conference football game, caused some to wonder whether the conference was on the brink of collapse again, and helped push Texas A&M and Missouri to jump ship to the SEC.

Meanwhile, ESPN went to distributors asking for 40 cents a subscriber, expensive for a cable channel but chump change compared to major-conference and regional sports networks (BTN started out charging 70 cents). Nonetheless, as the launch approached the network was far apart in talks with Time Warner Cable, DirecTV, and Comcast, in part because of the uncertainty surrounding high school and conference games, and in DirecTV’s case, because they wanted to wait for conference realignment to settle down (A&M was actively engaged in negotiations with the SEC as the network launched). It did have a deal with Verizon, but lacking a deal with TWC meant most people in Austin and a substantial proportion of people across the state wouldn’t be able to watch Texas’ 2011 home football opener against Rice. With even Verizon’s deal not kicking in until about a week after the network launched, the Longhorn Network opened in just 20,000 households. For all the controversy the network had engendered, almost no one, even within Austin let alone the state of Texas, could see it, and in a prelude to the CSN Houston and SportsNet LA showdowns to come, cable and satellite operators were remaining steadfast; by June, TWC and DirecTV weren’t even talking about carrying the network.

The network added AT&T U-Verse in time for the 2012 season, but the network was starting to look like folly; Oklahoma had gone deep into negotiations with Fox on a branded network, but what eventually emerged was merely a block of programming on Fox’s existing regional sports networks, while football coach Mack Brown, always uncomfortable with the level of access LHN wanted, seemed to imply that the distractions and added intelligence LHN provided may have contributed to Texas’ slow start that season. By 2013, it looked like LHN would enter a third season still without coverage on the largest distributors, casting a shadow over ESPN’s efforts to launch the SEC Network.

But just as the season prepared to begin, ESPN finally reached an agreement for Time Warner Cable to carry the Longhorn network. In March 2014, Disney reached a wide-ranging deal with Dish Network that included carriage for the Longhorn and SEC Networks, with DirecTV doing the same in December. What, exactly, changed to cause such a breakthrough, and whether it was a concession more on ESPN’s part or with distributors, may never be known, but one thing that is clear is that ESPN’s leverage with its panopoly of other networks was key to securing deals, certainly with satellite providers. Would the Longhorn Network have been able to overcome its early struggles to secure deals with distributors with any other partner, or certainly if Texas had opted to go it alone? It’s a question worth asking, and it helps explain why the ACC is still thinking about pursuing a network as a conference rather than individual schools looking into their own networks. Ultimately, the Longhorn Network’s success, as qualified as it is, may have more to do with the power of ESPN’s brand than Texas’.

Note: I’m probably not going to finish this initial series of Bonus Content posts this week; among other things, I still need to help put the finishing touches on the paperback. Hopefully the entire series will be done by the end of next week with whatever other posts I want to put together coming out over the rest of the month.

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