SBD/January 24, 2011/Media

Time Warner In Talks For Stake In Univ. of Texas Network

Time Warner Cable, Texas' dominant cable operator, is a corporate sponsor of UT
Time Warner Cable and ESPN have "engaged in preliminary discussions that would give the cable operator an ownership stake -- as much as 20 percent -- in the new University of Texas channel in exchange for wide distribution throughout the state," according to sources cited by Smith & Ourand of SPORTSBUSINESS JOURNAL. ESPN said that it will "push for the broadest possible distribution, meaning expanded basic carriage in Texas and sports tier carriage elsewhere." A deal with TWC is "essential" for the channel's distribution, as Media Business Corp. indicated that the company is Texas' "dominant cable operator, with close to 2 million subscribers." TWC is a UT corporate sponsor, has "wired the university for cable and broadband services, and it has a system that covers" the state capitol, Austin. Smith & Ourand note execs are "tight-lipped on how much the channel's license fee will be for the channel when it launches in September." IMG College, UT's multimedia rights holder, "negotiated the deal for Texas and will lead the channel's advertising sales." Meanwhile, ESPN Senior VP/College Sports Programming Burke Magnus said it is impossible to know "how long it will be before the channel is profitable." But he added, "We wouldn't be doing this unless we thought it was a good business proposition." Oklahoma has reiterated its desire to create a 24-hour Sooner network, and Magnus "didn't rule out cutting a similar deal with another school." However, he said that ESPN "has nothing in the offing." Magnus: "Our focus is here for the foreseeable future" (SPORTSBUSINESS JOURNAL, 1/24 issue).

SKIPPING THE CONFERENCE? In Detroit, Drew Sharp wrote under the header, "Texas Longhorns Set Bad Precedent With TV Deal." The partnership with ESPN is "another indication of the continuing devaluation of conference affiliation," as Texas "officially became an 'independent' with this exclusive network deal." Sharp: "The Big 12 is nothing more than a convenient scheduling partner for the Longhorns now." The NCAA "must look closely at an exclusive 24-hour channel tied to one institution." Sharp: "It's basically a paid commercial for the school. ... Does 24 hours of 'Hook 'Em Horns' constitute an unfair recruiting advantage?" (DETROIT FREE PRESS, 1/23). In Providence, Kevin McNamara wrote the UT network means that the "rich get richer, so rich in this case that Texas has no need to look to the Big Ten or the Pac-10 or anywhere else to play its games." McNamara: "The Longhorns are doing just fine, thank you, beating up on ... their neighbors in the Big XII" (PROVIDENCE JOURNAL, 1/23). In Orlando, Matt Murschel writes the deal is a "win-win for all those involved, except maybe conference football." UT as a result of the network may not "even need the Big 12," and it "could be the first salvo to freedom from conference restraints." Murschel: "I believe that this deal only hurts college football in the long run" (ORLANDO SENTINEL, 1/24). But Big12Sports.com's Wendell Barnhouse said, “This is really good for the Big 12 because Texas with its own network is going to be pretty happy now as far as another revenue stream. A lot of people say this might be the start of the end for the Big 12, and I kind of tend to disagree with that theory." He noted the conference will be "even more powerful, stronger, than before.” Barnhouse: "What’s going to be interesting is to see whether or not another school can come up with that kind of monetary windfall, and I think that might be a little bit difficult” (“College Football Live,” ESPN, 1/21).

FLORIDA INTRIGUED BY UT DEAL: In Jacksonville, Gene Frenette noted Univ. of Florida AD Jeremy Foley is "intrigued by UT's lucrative deal." Foley: "At some point, we'll ask the question. We'll see if there's more opportunities for us, as I'm sure other schools will." Frenette wrote if there is anything Foley "knows, it's how to follow the money." But there is "one big glitch for the Gators," as the SEC's 15-year deal with ESPN "precludes member schools from making a similar deal." As a result, UF "will have some legal hurdles to cross." But SEC Associate Commissioner for Media Relations Charles Bloom said, "Technology-wise, who knows what will happen five years from now?" (JACKSONVILLE.com, 1/22).
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