Cable Operators

ESPN Hooks Texas Longhorns Network

1/24/2011 12:01 AM Eastern

Soon the eyes of Texas will be upon ESPN’s
affiliate team.

There will also be other interested observers throughout
the media and distribution communities, as the sports giant
announced last week that it will kick off a network dedicated
to the University of Texas next September.

The 24-hour, still-unnamed service will be located in
Austin, the result of a 20-year, $300 million agreement
with the university, the programmer and multimedia
rights-holder IMG College, which negotiated
the deal for the school.

The Texas network — proffering
one live football game, encores of
other Longhorn gridiron contests,
basketball, other sports and extensive
shoulder fare, as well as some
cultural, arts and academic programming
— will be the first devoted
entirely to one school.

IMG GETS AD SALES

ESPN will supply production — valued
by Sports Business Journal at $400
million over the life of the contract —
of more than 200 events per year. IMG
will lead the ad-sales effort.

The university reportedly will receive
$247.5 million, while IMG gains
$52.5 million as recompense for the
multimedia rights it held.

ESPN senior vice president of college
sports Burke Magnus said ESPN
has held preliminary talks with potential
affiliates.

“This is not a surprise,” he said.
“We’ve let this be known. Official
talks will begin shortly as Sean’s
group takes it out,” referring to executive vice president of
sales and marketing Sean Bratches.

Magnus said there would be different pricing structures,
which he declined to specify, based on location.

University of Texas president William Powers Jr. said he
believes the network would be included on basic cable in
Texas, Oklahoma and perhaps in parts of Louisiana, and
could be offered as “a premium, perhaps part of a sports
package or as a stand-alone channel” elsewhere.

The Big Ten Network, a joint venture of that conference
and Fox Cable Networks, charges one level of
pricing for the states within the conference footprint
and far less for those in other areas.

ESPN research indicated that 40% of the university’s
alumni live outside of the great state of Texas.

The first stop for ESPN’s affiliate team, perhaps with yellow
roses in hand, figures to be Time Warner Cable, the
predominant operator in a state that counts some 8 million
cable homes and is the provider on campus and in Austin.

“We have had a long relationship with the University of
Texas and are big Longhorn fans. We also have a great relationship
with ESPN,” the cable operator said in a statement.
“We look forward to exploring our opportunities in
Texas with both of them.”

For distributors fearing a repeat of the proliferation of
pro sports teams establishing their own expensive regional
sports networks, Magnus downplayed the notion of this
serving as a model for ESPN to start channels with other
schools.

“Texas is our focus for the short-term. There are only a
limited number of schools with the size, athletic success
and scope of audience,” said Magnus, who noted that the
Texas population also makes for “a significant business
opportunity.”

Most universities are constricted in pursuing such network
opportunities, because of existing deals.

“What are you talking about? Notre Dame? USC? Florida
[whose rights are controlled by IMG]?” said one network
media executive. “But what’s ESPN’s end game? If the
whole college conference landscape blows up, they’re sitting
there with this network as a template and perhaps in
a position to gain rights to more football games.”

SUITORS FOR SOONERS?

One school that is pursuing its own network is Texas’s regional
rival, Oklahoma University.

Sources indicate OU might be interested
in working with Fox Sports,
which was said to have offered between
$3 million to $5 million in annual
rights to Texas, before being
trumped by ESPN’s far more lucrative
bid.

Fox operates regional sports network
Fox Sports Oklahoma and has ties to
the Big 12 Conference, whose football
TV rights expire after next season.

Fox Sports declined to comment
about the opportunity with the Sooners.

Other observers believe OU, which
did not return calls for this story,
could bypass a third party entirely
and work directly with Cox Communications,
the predominant cable operator
in Oklahoma, perhaps in some
sort of revenue-sharing arrangement.

A Cox spokesman said: “Cox’s
general policy is that we do not talk
about specific programmers or programming
opportunities in the media.
However, we’re always open
to considering opportunities that
meet reasonable business criteria
and satisfy customer demand.”

ESPN also is working on a companion broadband service
for the UT network.

Magnus said brand marketing and focus groups are
working on a network name that will include “some form
of Texas, Longhorns or UT,” but won’t put the ESPN moniker
front and center.

ESPN production and technical personnel already have
visited the campus a few times scouting, for a studio location.
“They’ve identified three to five different places; construction
will begin soon,” Magnus said.

ESPN will dedicate somewhere between “50 to 75 employees”
to the network, he added.