SBJ/January 2-8, 2012/Colleges

Sooners stake their claim on two Fox RSNs

Editor's note: This story is revised from the print edition.

Cable customers in Austin, Texas, don’t have access to their hometown University of Texas’ Longhorn Network.

But starting next fall, those Texas subscribers will be able to see plenty of the Longhorns’ bitter rival through hours of University of Oklahoma-branded programming, thanks to a deal that’s close to being signed with Fox Sports.

Fox has agreed to carry at least 1,000 hours a year of Oklahoma programming on its FS Southwest and FS Oklahoma regional sports networks, which go to 8.6 million homes in Oklahoma, Louisiana, Arkansas and, yes, Texas.

The programming will be branded in the name of the school — something like the Sooner Network or Oklahoma Network — and will feature third-tier TV rights, including at least one live football game, several men’s and women’s basketball games and Olympic sports. Third-tier TV rights include live games that are not picked up by the Big 12’s primary network partners, ESPN and Fox.

The deal covering FS Southwest and FS Oklahoma will include at least one live football game each season, several men’s and women’s basketball games, and Olympic sports.
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Money from third-tier rights is especially valuable in the Big 12 because that’s the only revenue that doesn’t have to be shared with the rest of the conference. Third-tier TV revenue in the Pac-12 and Big Ten, by comparison, is shared with the rest of the league.

Whereas Texas’ deal with ESPN for the Longhorn Network is valued at $300 million over 20 years, OU’s deal with Fox is believed to be worth much less, both in terms of annual value and length.

Industry sources cautioned that Oklahoma and Fox haven’t yet signed an agreement. But the school has moved into exclusive negotiations with the network and both sides have agreed to several big issues that would make Fox the exclusive regional home for Oklahoma athletics. There is expected to be a broadband component to the deal, as well, but those details have not been finalized, sources said. The OU-branded broadband site would feature live streaming and other on-demand content.

OU’s deal with Fox alleviates the pressure that comes with starting a new network from scratch, which would entail everything from building out studios and hiring talent to negotiating with cable and satellite carriers and setting up a sales staff. One of the Sooners’ primary objectives in striking a deal with Fox was to launch their branded content on a partner that offered complete distribution from day one, sources said.

In the last year, Oklahoma officials have said they had talked to a variety of networks, distributors and private-equity firms about partnering on a linear channel. But sources say Fox had a significant advantage in the talks because its fully distributed regional networks meant that Oklahoma would not have to suffer through the same type of carriage battles that are hurting Longhorn Network.

Longhorn Network launched in August 2011 to only a handful of cable carriers. It still has not been able to cut a deal with Texas’ two biggest cable operators (Time Warner Cable and Comcast) or two biggest satellite operators (DirecTV and Dish Network). Sources say the network, which is fully owned by ESPN, is not close to working out a deal with any of these pay-TV operators.

Sooners officials did not comment on the progress of the talks, which are expected to be finalized in the next month.

While a Fox deal would not provide Oklahoma with a full 24-hour channel, it would give the school a fully distributed regional network on which to run its branded programming. This type of coverage is coveted by schools for its ability to broaden their fan base and recruiting base.

In addition to sports, the OU-branded programming block would include university events, such as commencements and guest speakers, and programming from departments other than athletics.

Oklahoma, which is working with its multimedia rights holder Learfield Sports on the Fox deal, also has been a leader among athletic departments in creating original programming. The school recently produced a series of DVDs called “The History of Oklahoma Football,” narrated by CBS talent and former OU running back Spencer Tillman. Athletic Director Joe Castiglione has often cited that production as an example of the programming that could be produced from the archives.

The OU website, SoonerSports.com, also runs an extensive list of all-access programming that costs $99.95 for an annual subscription and $9.95 for a monthly subscription. That all-access content could also turn into programming for Fox.

The Sooners, who have flirted with membership in the Pac-12 twice in the last 18 months, will benefit from staying in the Big 12 and monetizing their own TV rights. The Big 12 gives its schools the most latitude of any conference, in terms of exploiting those TV rights.

In the Big Ten and Pac-12, for example, all of the member schools’ TV rights are managed by the conference and all revenue flows through the conference and is shared with other members. But in the Big 12, schools are free to make their own third-tier TV deals and profit from them without sharing the revenue with the conference.
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