There are reports that the creation of a Longhorn Network will take a major step by the end of the month. The paysite Sports Business Journal is stating that Fox Sports Net is the leader to become the broadcast partner for UT in the venture. The target date for launching the Longhorn Network is August, 2011.
IMG College, the multimedia rights holder for UT, is handling the negotiations and supposedly Fox Sports Net and ESPN have emerged as the two main potential partners for the network. An August 2011 debut is still the goal for the Longhorn Network.
The selection of a partner is key for Texas, because unlike the Big 10 Network, which is already a booming success, or the proposed Pac 10 Network, the Longhorns will not have the luxury of having other programs in a conference to help supply content for the network.
The selection of the broadcast partner is also important for the multiple goals of the proposed network.
Expanding and protecting the UT brand is a major goal of the Longhorn Network.
The added revenue that a Longhorn Network will bring in is important, but it is hardly the only benefit Texas is looking to produce. Furthering the Texas brand -- by controlling the message going out -- is another key factor in this project. Texas already has an excellent brand equity built in, and a channel broadcasting that brand throughout the dominant markets of influence carries recruiting advantages for all parts of the University - not just the athletic department.
Another goal is to avoid as much risk as possible. Over 20 years ago, Texas signed on with Host Communications as their broadcast partner. Deloss Dodds wanted an outside agent who would provide a "turnkey" process whereby the football and basketball coaches were taken out of the fund-raising business for their own TV and radio shows. Host became responsible for the sale and placement of the media products, and would pay the coaches a flat fee. This process soon became the industry standard.
As Texas looks to start its own channel, Dodds again is looking at uncharted territory for individual schools, and he is looking to cut the risk factors down to a minimum. The Big 10 Network offers a great opportunity to look at the pitfalls, and benefits of having your own network.
The Big 10 Network is seen as the template for creating a new media revenue stream.
The biggest battle any channel has in starting out is getting clearance from the cable and satellite distributors. The Big 10 Network had an extended - and ugly - battle with Time Warner and Comcast Cable when they were launching. Getting on the basic tier while also getting a monthly franchise fee that was profitable was a very difficult process for the Big 10 Network.
The Big 10 Network is co-owned by the league (51%) and Fox Sports (49%). Dodds has gone on public record in the past that Texas does not necessarily have to be a part owner of the network.
Texas could have another "hands off" arrangement by having IMG College and a media partner own the channel and simply pay Texas a yearly rights fee. Another option would have Texas, IMG, and the media partner all as owners of the network.
Texas and IMG could also look towards distributors such at Time Warner, Comcast or AT&T as partners as well. AT&T and Verizon have launched video businesses to compete with the traditional distributors. Right now Fox Sports and ESPN are the major players in any kind of sports channel creation. There are pros and cons for both operations.
ESPN is currently the 800-pound gorilla that dominates the sports media landscape. They have a proven track record in running multiple media platforms with great success, including broadband. They obviously have the expertise in programming, production and sales that would be needed for a start up, and they are the best negotiator around when it comes to carriage deals -- and that might actually be a strike against them for Texas.
ESPN just completed a protracted - and bitter - negotiation with Time Warner over its channels. The idea of re-opening those negotiations for a new niche sports channel is an unpleasant one for both sides.
Fox Sports has several inherent advantages in its proposed deal with Texas. Fox already operates Regional Sports Networks across the country, including several in Texas. They include Fox Sports Houston, Fox Sports Southwest, and Fox Sports College. Fox could take one of those channels, assign the Longhorn Network to it and solve the carriage negotiation problem within the state of Texas overnight, giving the network strong coverage in the state right from its launch.
Fox also has an advantage in producing programming, since it already controls much of the inventory that would fill in a Longhorn Network by way of their current agreement with the Big 12. This is especially important in the area of Olympic and women's sports, which will offer the opportunity for live broadcasts.
It is expected that UT will negotiate into the next Big 12 contract that at least one home football game be retained for its network.
Several home basketball games are expected to be made available on the Longhorn Network.
Men's and women's basketball as well as baseball and softball are also expected to be the major events that will find their way live onto the channel.
Again a look at the Big 10 Network will also give you an idea of what supplemental programming will look like on the Longhorn Network. You can expect replays of past games, coach's shows and other "insider" video on the athletic department. Non-sports programming will also have a home on the channel. Major events on campus could be telecast live. Departments throughout the University will be given the chance to highlight their achievements.
Shows highlighting Austin and its attractions - such as 6th street - will find a home on the Longhorn Network.
There are plenty of voices in the industry who are more than willing to point out the potential pitfalls facing such a start up. Partnering with an experienced media provider does not guarantee wide spread distribution.
A single University Network has a hard sell when it comes to convincing distributors that their content is as valuable as other sports channels already out there. The deeper you go into the non-revenue sports for live broadcasts the smaller the audience you attract that wants to view that content. That makes settling on the license fee that doesn't price you out of the market a critical part of the equation.
Still, Texas is willing to step out before other colleges take the plunge, and they are working on a proven business model that can produce the desired fiscal and branding results while keeping the risks to that brand at a minimum.
One of the advantages Texas saw in preserving the Big 12 was the ability to strike out with a Longhorn Network. Nobody is willing to make a guess as to the long-term viability of the Big 12, but no matter what, UT wants to have its own channel as part of its total package -- no matter where they call home.