OT - Fox Sports says LHN losing tens of millions of dollars

[leopold]

http://www.foxsports.com/college-footba ... tle-051115

I have to admit, I find this interesting.

Apologies if this has already been posted.

EDIT: Sorry, I initially posted the wrong article. Corrected.

[Pony Boss]

Not surprising, one team networks don't work

[Planter's Punch]

They could have had more money and a stable conference if they didn't think it was 1991. Looks like Texas A&M made the more financially sound decision.

[Digetydog]

They could have had more money and a stable conference if they didn't think it was 1991. Looks like Texas A&M made the more financially sound decision.

1) The original plan was to have a joint network with the Aggies. The Aggies didn't want any part of it and then complained when UT ended up sitting on a pot of cash.
2) When the Aggies left the Big12, they did it for spite, not money - they left for LESS money than the B12 offered. While things worked out well for them when they lucked into Johnny Football, let's see how they like living in the 2nd tier of the SEC with decades of 4-6 loss seasons in their future.

[CalallenStang]

The failure of LHN has not been a secret. However, for UT, it gives them:

1) $15 mil/year for allowing it, and
2) Promise of a future payoff when ESPN's losses eventually lead them to offer UT a buyout to discontinue the channel

[stc9]

2) Promise of a future payoff when ESPN's losses eventually lead them to offer UT a buyout to discontinue the channel

At which point UT will have the buyout and ESPN will launch the Big XII network giving them even more cash. The new network will have all of the LHN (UT cheerleaders) employees, thus making it just as divisive to the rest of the Big XII as the original LHN.

Even though the LHN is a disaster, somehow the (W)hornes will walk away better off than they were before.

[Mexmustang]

Interesting numbers about the SEC and Big Ten, "It was the eight million cable and satellite subscribers in Texas that made the SEC Network financially viable."

If only if, SMU could become viable in football again, the PAC and Big Ten, might just come calling--wouldn't that be special to make more TV revenue than the Teasips?

[Pony81]

Or a buy out so UT can join the PAC12. Don't see them staying Big 12 pas the current GOR. OU will go SEC.

I know there are political implications to both UT and OU leaving without bringing other state schools. However, I don't see their respective politicoes making one stay if the other bolted. The Big 12 would be fatally weakened.

BTW: I can't believe the Big 12 will get a waiver to have a championship team with only 10 teams. Kinda unfair to the rest of the P5 expanded partly to have a championship game and consequently have to split their revenue 12 -16 ways. Why would they vote to give the Big 12 a waiver.

[Digetydog]

Or a buy out so UT can join the PAC12. Don't see them staying Big 12 pas the current GOR. OU will go SEC.

I know there are political implications to both UT and OU leaving without bringing other state schools. However, I don't see their respective politicoes making one stay if the other bolted. The Big 12 would be fatally weakened.

BTW: I can't believe the Big 12 will get a waiver to have a championship team with only 10 teams. Kinda unfair to the rest of the P5 expanded partly to have a championship game and consequently have to split their revenue 12 -16 ways. Why would they vote to give the Big 12 a waiver.

While there is some merit to your analysis, there is a fundamental problem with it as it relates to OU and UT leaving the B12. Simply put, as arms of state government, they are not entirely free to make a decision to leave the Big 12.

Assume that each Big 12 team gets a $20-25M annual distribution from the conference. If Tech and/or OSU are left behind in the Big12 (which is likely), they are looking at an enormous hit.
- For the state to be a net winner, the windfall to UT and/or OU would need to be enormous.
- Both OSU and TT have enough clout in state government to make it hard for them to become orphans.
- The Pac12 will never take Tech or OSU.

It will be interesting to see if Texas and/or OU are ever allowed to go it alone.

[Pony_Law]

So that article is pretty dubious as far as supporting the contention that the LHN is losing money. The article's argument is a) the subscription revenue only exceeds the payment to UT by 10 million a year and then b) 10 million a year is not enough to cover the cost of operations/start up costs c) therefore the network must be losing lots of money. There is no evidence for b or c and the article does not account for any revenue streams other than subscriptions which of course misses the biggest source of TV revenue, advertising. So to the point I simply do not buy the premise that the LHN is losing money (if it was there should be direct evidence of it in earning reports for the publicly traded company of ABC-Disney). My guess is that the LHN is low hanging fruit that earns a nice profit for ABC-Disney. It is an amazing profit center? probably not but i bet both sides are happy with the arrangement.

This of course is not to mention that it comes from a news source that is a direct competitor to LHN. I'm sure they would love to see it fold and get UT back into the fox sports big 12 media rights.

[leopold]

Yeah, I do wonder about the fact that Fox Sports is reporting losses of an ESPN venture.

But I also wonder what effect this is having on the Longhorns image as a whole. I remember when Notre Dame got there TV deal with NBC and it isolated them for a generation - anybody who was neutral on the Irish almost immediately came to hate them because they viewed having their own personal TV contracts as unfair. Their are reports showing a growing shift of support away from the horns and towards the aggies, and while I have no dog in that fight I can't help but wonder if the LHN had something to do with it.

[Digetydog]

Yeah, I do wonder about the fact that Fox Sports is reporting losses of an ESPN venture.

But I also wonder what effect this is having on the Longhorns image as a whole. I remember when Notre Dame got there TV deal with NBC and it isolated them for a generation - anybody who was neutral on the Irish almost immediately came to hate them because they viewed having their own personal TV contracts as unfair. Their are reports showing a growing shift of support away from the horns and towards the aggies, and while I have no dog in that fight I can't help but wonder if the LHN had something to do with it.

Until Charlie Strong gets a couple of years under his belt, it will be hard to see if the shift is permanent. The Aggies lost 5 games last year and don't have Johnny Football driving headlines.

[Pony_Law]

I'm sure that the shift to aggies just represents fair weather fans. The aggies were pretty good and exciting to watch with johnny football at the same time that UT was having several down years. I expect aggies to be mediocre to poor for most of the time in the SEC and for Texas to be pretty consistently in the first tier of the big 12. So expect a lot of the fair weather fans to come back

[ghost]

My take is that this deal was one probably most institutions would take because it looks so good financially and provides so much exposure. Maybe it is just me but besides the money in the short-term I think it is doing great harm to the UT athletic teams. There seems to be dramatically less news coverage for UT compared to 4-5 years ago outside the LHN. And the 24-hour coverage is draining on the different coaches. Now instead of hearing the coaches in short, edited sound bites that sound impressive these longhorn coaches sound less impressive the longer they talk which has to hurt recruiting. Example would be the allure of Mac Brown showing up in your home for a recruiting visit and knowing little except for the aura. Now the parents and kids have heard them talk over and over on tv and so there trite sayings and expressions are not new. Too much exposure is sometimes a bad thing....plus now they can't abuse the players in practice like Patterson at TCU does.

[DanFreibergerForHeisman]

Interesting theory, ghost.

This whole thing started when they were riding the wave of the football championship, and everybody thought with all of the money they would just start winning everything.

Since then they have won volleyball once, but I don't think they have won anything else - not even close in anything remotely major too.