SBD/January 19, 2011/Media

ESPN, UT Reach 20-Year, $300M Deal For Longhorn Network

New Longhorn Network provides added exposure to sports like baseball
The Univ. of Texas today will announce a 20-year, $300M deal with ESPN to create the Longhorn Network, the first-of-its-kind channel to broadcast live UT athletic events, shoulder programming and non-sports university content. The Longhorn Network will launch in the fall and will be owned by ESPN, which will pay the school a rights fee that averages $15M a year, sources said. In addition, ESPN has committed close to $400M in production value to the channel over the 20-year term. IMG College, the Longhorns’ multimedia rights holder, negotiated the deal with UT. All three parties -- UT, ESPN and IMG -- signed the contract, sources said, because some of the rights had to be sublicensed from IMG, while other rights came directly from the university. In addition to the channel, Texas makes more than $10M a year from its multimedia rights agreement with IMG, which will give the school an annual revenue stream of about $25M for its multimedia rights and the channel combined. The Longhorns’ budget for the '10-11 fiscal year, already the nation’s richest, is $137M (Ourand & Smith, SportsBusiness Journal). UT President William Powers said that he anticipates the new net “would carry one or two football games, a larger but unspecified number of men’s basketball games and a variety of other men’s and women’s sports, including volleyball and swimming.” He added that non-athletic programming is “likely to run for about three hours a day and include musical performances, plays, and documentaries by faculty members and students.” Powers: “This will be high-level, entertaining cultural, music, scientific, Discovery Channel, History Channel kind of stuff. And we have a team put together working on it, and that will be done in collaboration with ESPN” (STATESMAN.com, 1/19).

EXCEPTION TO THE NORM: USA TODAY's Michael Hiestand writes there is "not much chance" that other universities will follow UT in securing their own networks. Only the "big-time programs could assume there'd be much viewer interest in their niche sports, but unlike in the Big 12, TV deals for the power conferences such as the SEC, Big Ten, Big East and ACC preclude their schools from starting their own channels" (USA TODAY, 1/19).
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