One of the reasons the Big 12 still exists after last summer's aggressive poaching effort by the Pac-10 – even in a truncated, 10-team format – is that Texas couldn't bring itself to leave behind the vision of a lucrative, all-Longhorn cable network. The Pac-16 expansion model included (and still includes) plans for a conference-owned network on the overwhelmingly successful Big Ten model, which would have kept Texas from pursuing the nation's first school-specific property. At the time, UT hoped to bring in around $3 million annually from its own network, enough help drive the stake in the proposed move west.Back in November, the Longhorns' strategic retreat looked pretty smart when Orangebloods.com's Chip Brown reported that ESPN had swooped in with an offer of $12 million per year – four times the initial estimate – for the rights to build and maintain the network. When the university and the Worldwide Leader formally announced the partnership this morning, the actual number was even more impressive:
The University of Texas has struck a 20-year, $300 million deal with ESPN for a new, 24-hour network that will broadcast Longhorn sports and some non-athletic content such as campus musical performances.
UT President William Powers Jr. said the agreement, which also involves IMG College, a company that handles marketing and licensing for the university, will create 50 to 100 network jobs based at Royal-Memorial Stadium, fund some academic initiatives and further cement the university's sports brand, already one of the most lucrative in the nation.
[…]
Officials said ESPN has guaranteed the $300 million, with 82.5 percent, or $247.5 million, earmarked for the university. IMG is assured 17.5 percent, or $52.5 million.
About half of the first year's payout is slated for academics, according to Powers, but even 50 percent of this brand new pie is more than the majority of Division I football programs – including the bottom dozen or so from the "Big Six" BCS conferences – collect in net revenue (i.e. profit, if we're thinking in business terms, which we definitely are not because all proceeds are strictly for the benefit of the broader mission of the university and the academy and please don't start taxing us) on an annual basis. And so the rich get richer: Already, Texas consistently tops the lists of the wealthiest or "most valuable" programs in the nation, reportedly bringing in over $85 million in net revenue on football alone* in the 2008-09 school year – well above the No. 2 revenue generator, Ohio State. Based on that number, with the guaranteed network cash on top of the Big 12's desperate promise to significantly increase payouts by up to $20 million on its next television contract, Longhorn Football stands to clear $100 million in gross annual revenue within the next five years. Easily.
Texas' total football revenue when Mack Brown was hired in 1998? $21 million. It will take a lot of 5-7 finishes to overcome that number.
The only question then – besides what, exactly, is going to air on the network between retrospectives on the 1975 Bluebonnet Bowl, all-night Cat Osterman marathons and reruns of "Friday Night Lights" and "Austin Stories" – is, what other school(s) has the cachet to follow suit? Big Ten juggernauts Ohio State and Michigan are locked into the Big Ten Network; and although the SEC went out of its way last spring to emphasize that its schools are free to pursue their own media deals, no single member brings quite the high-population, high-growth, multi-market oomph of a Texas on its own. Notre Dame's current deal with NBC expires in 2015, but even if it doesn't preclude ND from setting up its own network, most media watcher seem to believe the Peacock isn't getting much bang for its buck, reportedly at $15 million per year for the rights to Irish home games. The potential for an all-Irish network may depend on how much stock a few executive are willing to put into the team waking up the echoes at some point in the foreseeable future after almost 20 years of persistent mediocrity on the field.
But rest assured, the competition has seen the future, and it is burnt orange. And green. Mostly green.
- - - Matt Hinton is on Twitter: Follow him @DrSaturday.
* The specific number for Texas' 2008-09 football revenue, $87.5 million, comes from data submitted to the U.S. Department of Education. The same number appears in this report to the Alumni Business Conference last spring and informally in a number of other university sources.
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