(03-20-2017 10:27 PM)Pervis_Griffith Wrote: Texas wanted that channel to do more than just give them Texas. They already have that.
I've heard that this network is more than just struggling. And if ESPN is seriously considering shedding ESPN News AND Classic, I think the writing is on the wall for the Longhorn Network.
Whether or not the writing is on the wall for the Longhorn Network is entirely due to the performance of the Longhorn Network ... I've just googled and read an article from 2015 that it was "going to" hit break-even in 2016, but I don't know if it did.
It's certainly conceivable that the LHN may start to show a modest profit for a while. But it seems likely that the month that the contract expires is the month the plug is pulled on the Longhorn network in its present form, unless there has been a renegotiation that changes the form of the network, because it seems likely that sometime in the 2020's, the erosion of cable revenue will put it back underwater again, and that time is will be underwater for good.
That may mean that as the end of the contracted period comes closer, the incentive on the part of Texas to find some alternative arrangement will be growing ... but the end of the contracted period is more than a decade in the future, and so we are a long way away from any incentive to start thinking through the end-game of the network.
ESPN is not obligated to
anybody to provide ESPNU, ESPN News or ESPN Classic over the coming decade ... providing those networks is about the carriage they can get, their production costs, and the amount of low-incremental-cost programming that can be provided from sporting events which would otherwise be relegated to ESPN3. A smaller inventory in sporting events that can attract an audience after the needs of ESPN and ESPN2 are taken care, because ESPN is no longer willing to break the bank for content the way they were in 2010 with the LHN, combined with the challenge of negotiating carriage for the ACC Network (which also reduces the inventory for the lesser ESPN cable channels), makes it seem increasingly likely that the retrenching the number of cable channels is the profitable move.
Each retrenchment will, necessarily, increase the pool of available inventory of a given quality for each remaining channel, so rather than one retrenchment rapidly leading to another, it seems more likely that each retrenchment will be followed by a period of relative stability. IOW, a long, fighting retreat from one entrenched position to the next seems more likely than a sudden collapse.
One reason the LHN has such a small impact on the other channels goes to the core problem with the LHN, which is that it has such a limited inventory of games of interest. ESPN doesn't have very much incentive to pay UT-Austin any premium to buy out of the LHN obligation, because so little attractive inventory would be made available by that move.