Longhorn Network is "under as much scrutiny as ever," as the channel's sudden decline has brought "into question the wisdom of ESPN's sizeable investment in the only single-school, around-the-clock sports network in the country, which thus far has lost" $48M, according to Bruce Selcraig of the SAN ANTONIO EXPRESS-NEWS. Data from SNL Kagan shows that though LHN was a "financial windfall for the university, the network has lost money for five consecutive years." The data also shows LHN was "'on the verge of being a bust' because of its early lack of full distribution," but was "rescued when DirecTV signed on last year." SNL Kagan projects LHN "will achieve its first profit" in '16. ESPN Exec VP/Programming & Scheduling Burke Magnus said that audience numbers for a recent Rice-Texas football game were "comparable" to numbers seen on ESPNU or ESPN2. Selcraig noted LHN's monthly subscriber fee, reported to be $0.29, plus advertising have "apparently been unable to offset some considerable costs on ESPN's side." ESPN's payments to UT started at $10.98M per year, increasing by 3% annually until '31. ESPN further "projected its production and overhead costs to run" $26M annually, increasing 3-4% annually. JMI President Tom Stultz, whose firm, in a joint venture with Texas rightsholder IMG, works on campus-wide college marketing initiatives, said, "ESPN is in this for the long haul and they derive other benefits from the network other than just financial rewards. They develop new talent. They produce valuable content for the middle of the country and one huge state, and with conference realignment always in play, they are joined at the hip for 20 years with Texas." Magnus said that ESPN "has no intention of buying itself out of the 20-year contract with Texas, selling it to a private equity firm or competitor" (SAN ANTONIO EXPRESS-NEWS, 12/28).
MIKE CHECK: In Houston, David Barron in a Q&A with UT men's AD Mike Perrin asked about "key issues" with the school and in college athletics. Asked if there had been any discussion about LHN carriage issues, Perrin said, "No. I’ve had no direct conversations with ESPN in Bristol (Connecticut). I have a constant working relationship with the people here, and they have been excellent." Asked if UT might expand on its football facility, Perrin said, "I think (Royal-Memorial Stadium) will be expanded sometime in the future. We have such a massive complex in the south end zone now that probably something that wraps around and completes the bowl will be considered. ... There was survey of season ticket-holders several years ago, and I expect that south end zone to be a topic sometime" (HOUSTON CHRONICLE, 12/26).
