Horns247 Board

Also signals a few other things

* that Texas is a little embarrassed and frustrated.

* that the powers that be at Texas don't think there's a distribution deal coming in the near future. (you don't make those comments if you think time Warner signs on next week)

Agree...

It's not even a "vote of confidence."

We're getting 15M. Can't blame ESPN for trying to hold firm in trying to cut the best deal. If they can't, I suspect while we'll get the checks they're obligated to send, we won't get their best effort eventually. They want us on the basic tier, something that is definitely what we want too. If we're stuck on a premium tier that only UT fans pay for, we'll also be stuck paying a real premium for a bunch of crap sports that no one really wants to see. This is a 20 year contract, too early to start crapping our shorts despite the irritation we may currently feel. If ESPN does pull this off and we're on the basic sports tier the boon for us will be incredible. I'm willing to let this play out an awful lot longer before I start setting stuff on fire.

As they should be.

Yes, it's a 20-year deal, but Texas fans are worse off now than they were a year ago when it comes to being able to view their teams.

I can't remember the last time a college program said that.

As I said elsewhere, Texas is in the unusual position of being paid NOT to have its games widely seen. Not the best long-term situation, but for now, quite interesting.

We got 300M, it isn't as if we got nothing and I don't think anyone yet views this as any sort of "mistake". It'd be nice if we got to dictate all the rules but these are big boys on the other side of the table too. All in all, I still feel pretty comfortable that ESPN will come out of this whole and as a result, so will we.

Not a mistake at all. It would be naive to think that Texas could have an out without granting ESPN an out as well. The LHN is a game-changer. Fortunately, the people on both sides of this negotiation realized this. ESPN is fronting the costs and paying us a huge fee. The upside for both sides is huge. This isn't just a $300 million contract.

Any time you completely surrender any control or influence over the way your product can be distributed, it is a mistake. There should have been deadlines or trigger dates to force ESPN to get the LHN on the air. Worst case scenario: they don't get the job done (real egg on their corporate face) and Texas gets its rights back, and takes it to someone who will distribute the product with at least some of our interests in mind.

The money is great. I get that. However, the only reason anybody ever creates a TV network is because they want people to see it. If that particular element is missing, the enterprise has failed. As far as patience goes, ESPN has allowed all of its leverage to disipate without making a single significant deal. Now, its leverage does not return until this fall. However, the second time around, that leverage will be reduced unless the major carriers find that their subscriber lists have been ravaged by the defection of angry Texas fans. There is no evidence that is going to happen, which puts the ball back into ESPN's court. Either drastically reduce the ridiculous demand for $.40 per subscriber per month on the basic tier, or work out a subscriber fee for the sports tiers and/or PPV packages.

BTW, before you suggest that the $.40 is not ridiculous, do some math. DirecTV alone has 30 million subscribers. $.40 per month works out to nearly $150 million annually. That is way beyond covering your investment and making a reasonable profit.

That's because it's not ou's network. They have airtime on a crappy channel.

Your premise is so far off base it is hard to know how to respond. Are the Big 12's Tier 1 and Tier 2 contracts a mistake because Fox Sports Network and ABC/ESPN determine how the product will be distributed? Of course not. Texas could have retained full ownership and control over the network and have cut its own distribution deals, but it would have required a huge investment by the University and a breakeven point in the very distant future. The upside would have been greater but so would have the risk. ESPN' leverage will return in the Fall and trust me, they have a clue about what they are doing. The Big 10 network had tons more content and it took more than two years to get widespread distribution. I suspect that there are a lot of people that could switch to Verizon Fios today but haven't made the switch. That describes me.

We're in uncharted waters. No one has ever had their own network. The cable companies don't know how to handle it and want to treat it in a far different fashion. If they're successful it will mean that ESPN loses bargaining power for any possible similar channels. First one to blink loses.

No question about it.