University of Texas Plans Sports TV Channel
The school is in talks with Time Warner, Comcast, and AT&T to distribute Longhorn Sports Network, a first for a specific college
By Tom Lowry
In what would be a first for college sports on television, the University of Texas is planning to launch its own 24/7 sports network, signaling a further move toward niche programming on cable and satellite.
Officials from the University of Texas have teamed up with the college sports unit of IMG Worldwide, a talent agency and licensing company, to negotiate distribution on Time Warner Cable
(TWC), Comcast
(CMCSA), and AT&T
(T) in Texas and possibly in bordering states, says Pat Battle, a senior vice-president at IMG College. IMG has an agreement with the Austin (Tex.) school, which is part of the Big 12 Conference, to oversee its trademark licensing, marketing, and multimedia rights.
If the channel, tentatively named the Longhorn Sports Network, gets off the ground, it would be the first time a university has created its own sports network seeking broad distribution. "Texas has such an incredible fan base and such great content through all its sports programs," says Battle, "that we feel a network like this will have a real following." A spokesman for DeLoss Dodds, the UT athletics director, said he was unavailable for comment.
COLLEGE SPORTS' TV EXPANSION
While the network will show a range of sports, from baseball to track and field, it currently does not have the rights to show all the Longhorns' enormously popular football games, which raises doubts about what kind of an audience the network could attract.
Sports are a huge draw in Texas, with college athletics and music as the main attractions in its largest university's hometown. With a storied history in football and the largest university sports budget in the country, at more than $120 million, Texas reportedly operates one of the most profitable university sports programs. The University of Texas football team is currently ranked No. 4 nationwide, having been knocked out of the top spot by a Nov. 1 loss to Texas Tech. Texas defeated unranked Baylor at home on Nov. 8.
Over the past decade, college sports has expanded its reach greatly on television, moving from the broadcast networks to cable outlets such as ESPN, to regional sports networks like Fox, to such college-themed networks as CBS College Sports and ESPNU, to, more recently, networks established by college conferences themselves.
Now Texas is taking the lead in breaking out on its own to capture revenues exclusively. But is it economically feasible to support a university-only sports network, particularly when it has become much harder to get the necessary distribution on cable to make a profit? "I don't know how far down the tree you can take this thing," says Mike Trager, founder of TV sports consultancy The Trager Group. "The revenue pie for college sports stays essentially the same, but they keep slicing it up. The question for Texas is, 'Can you get the revenue and distribution for that specific of a niche?'"
TEXAS FOOTBALL TELECASTS
Even as sports offerings have grown on TV, cable and satellite operators have become more resistant to paying for the escalating rights to show sports, their most expensive category of programming. When the Big Ten Conference tried to get distribution deals for its network in 2007, it met huge resistance, particularly since it wanted to charge distributors a dollar a month per subscriber (ESPN charges about $3). Cable and satellite operators balked until the Big Ten lowered its price to about 70¢. The Big Ten Network now has distribution to about 35 million homes. Comcast offers it on its expanded basic service in those states with Big Ten schools and on its digital sports tiers elsewhere.
IMG's Battle says Texas would seek distribution only on digital sports tiers, for which subscribers pay an extra fee. The university has not reached any deals with distributors yet, but Alex Dudley, a spokesman for Time Warner Cable, with 1.8 million subscribers in such Texas cities as Austin, Dallas, and San Antonio, called the talks "very productive" thus far. A broadband offering of the network or of some programming on the network is under consideration as well, says Battle.
A big sticking point for distributors is knowing which sports and which games the university network will be allowed to show—the super-popular Longhorn football games are the main interest. The Big 12 has rights deals for broadcast TV with ABC
(DIS) and for cable with Fox Sports Networks
(NWS), so many of the Texas football games air on those outlets. Fox sometimes sublicenses those rights, therefore Big 12 games also air on other cable outlets such as ESPN and Versus. As it stands now, the university's sports network would be able to air as many as four football games, says Battle. Clearly, they wouldn't be the most competitive matchups, since ABC and Fox would want to keep those. The university could offer Fox, or the cable outlets, an equity stake in the network as an incentive to complete the ongoing deal talks. Battle says that hasn't been ruled out as a possibility.
Battle, whose father was the successful University of Tennessee football coach Bill Battle, is not deterred by the challenges. He's hoping the network will launch next fall and perhaps become a model for other large universities. Of course, Battle is not a disinterested party. IMG College represents the rights for 15 Division I universities, including the University of Michigan in Ann Arbor, where college sports might be just as much of a religion as they are in Austin.
This article appeared in BusinessWeek Magazine on Friday, November 7, 2008.
