As The Wheel Turns

[spaceman]

Steve Walentik @
@Sportstalkcrap Apparently, there's discrepancy between what Boren and Deaton actually said. Imagine that in the Big 12.
2 hours ago

@PeteThamelNYT Deaton said they've agreed to pursue that, not that they've agreed to it.
2 hours ago

Steve_Walentik Steve Walentik
@
@Sportstalkcrap I don't believe that to be the case from people I have spoken to.
2 hours ago
Steve_Walentik
Exact Deaton quote on media rights: Big 12 Board "affirmed its intention to pursue the granting of media rights ... for a period of 6 yrs."
2 hours ago


http://twitter.com/#!/steve_walentik

[Tear Down This Wall]

No problem, spaceman. We already know that if Boren says it's a done deal, it probably ain't.

[FaninAma]

I figured as much. This baby may not be put to bed like everybody thinks.

Do you really think Texas is going to lock up its tier 1and 2 rights 6 years and then be unable to threaten to leave the conference if they don't get their way?

Just think about it for a minute. If UT agrees to that then they suddenly becone just another vote in the conference. If they get out- voted they cannot pout and threaten to leave since they will lose their media rights for 6 years. I know Texas has deep pockets byt I don't think even they could take a financial hit like this. So in essence UT becomes 1 of 9 votes( or 1 of however many programs are in the conference after expansion)

So either Boren is a negotiating genius and took Deloss to school or none of this has been finalized and Boren looks even more stupid than he did before.

[delhalew]

I figured as much. This baby may not be put to bed like everybody thinks.

Do you really think Texas is going to lock up its tier 1and 2 rights 6 years and then be unable to threaten to leave the conference if they don't get their way?

Just think about it for a minute. If UT agrees to that then they suddenly becone just another vote in the conference. If they get out- voted they cannot pout and threaten to leave since they will lose their media rights for 6 years. I know Texas has deep pockets byt I don't think even they could take a financial hit like this. So in essence UT becomes 1 of 9 votes( or 1 of however many programs are in the conference after expansion)

So either Boren is a negotiating genius and took Deloss to school or none of this has been finalized and Boren looks even more stupid than he did before.

If whorn wants a conference they'll sign. If not, **** 'em.

Let's see em go indie or run to the ACC.

Ye of little faith.

[FaninAma]

When I first heard what Boren said tonite I was disappointed but after thinking about it for a while he and the other university presidents have really backed Texas into a corner.

[colleyvillesooner]

How so?

[8timechamps]

When I first heard what Boren said tonite I was disappointed but after thinking about it for a while he and the other university presidents have really backed Texas into a corner.

That's what I took from it. Texas is finally going to get their feet held to the fire. Something that probably could've/should've been done a couple of years ago...but, that's 20/20 hindsight.

[FaninAma]

How so?

Texas has been thumping their chest the past couple of days about how they want to keep the conference together. So the other presidents have essentially told Texas to put their money where their mouth is.This is the deal: If Texas is serious about keeping the conference together and making it more stable they will agree to sign over their tier 1 and tier 2 television rights for 6 years. That means they cannot leave for 6 years no matter how many times they get out-voted.

If they refuse to do this then we all know they were just posturing inorder to not have to cave on the LHN.

Texas, the ball is in your court. What are you going to do now?

[Mr. Nuke]

Texas has been thumping its chest the past couple of days about how it wants to keep tge conference together. So the other presidents have essentially tod Texas to put their money where their mouth us. This is the deal. If Texas is serious about keeping the cnference together and naking it more stable they will agree to sign over their tier 1 and tier 2 television rights for 6 years. That means they cannot leave for 6 years no matter how many times they get out-voted.

If they refuse to do this then we all know they were just posturing inorder to not have to cave on the LHN.

Texas, the ball is in your court. What are you going to do now?
Texas really doesn't care about 1st or 2nd tier rights anymore. They'd honestly prefer to have a Big 12. If they get to keep the conference and their $15 million LHN on the side this is a win for them no matter how you cut it.

[FaninAma]

Texas really doesn't care about 1st or 2nd tier rights anymore. They'd honestly prefer to have a Big 12. If they get to keep the conference and their $15 million LHN on the side this is a win for them no matter how you cut it.

So you're saying they would be willing to give up 6 years of tier 1 and tier 2 television revenue? Have you checked the dollar amount the conference is getting for those rights

I seriously doubt that they don't care about their share of that revenye.

[Mr. Nuke]

So you're saying they would be willing to give up 6 years of tier 1 and tier 2 television revenue? Have you checked the dollar amount the conderence is getting for those righrs?

I seriously doubt that they don't care about them.
No I'm say Texas would be thrilled to have the Big 12 guaranteed to last at least 6 more years. Texas isn't going anywhere as long as there is a Big XII. Why would they? They have a guaranteed 1st and 2nd tier rights revenue stream plus a 3rd tier rights revenue stream that no other conference is willing to take. I'm saying I wouldn't be surprised if Texas is willing to share 1st and 2nd tier rights equally all of the sudden, because they lose $1 or $2 million but are guaranteed to make $15 million in 3rd tier rights in a stable Big XII.

Texas would be more than willing to sign the proposed 6 year agreement. That is a pretty big "win" for them.

[Sooner1972]

The Mizzou fans desperately want to go to the SEC if you read their forums and polls, but it sounds like Deaton prefers to remain in the Zombie Conference.

How would Mizzou's exit impact us? Would we still be forced to stay with Texass and the little sisters of the poor with no other options?

[FaninAma]

Its more than 1 or 2 million a year. The Big 12 signed a deal with FOX last year for 1.1 BILLION for its tier 2 rights alone over 13 years. You do the math.

That doesb't include the ABC/ESPN tier 1 revenue which will be coming up for renogotiation in 4 years. The tier 2 rights by themselves are worth over $8.5 million per school per year. Now add the tier 1 rights to that.

Multiply that by 6 years. Are you saying Texas would leave that kind of money on the table?

[prrriiide]

I figured as much. This baby may not be put to bed like everybody thinks.

Do you really think Texas is going to lock up its tier 1and 2 rights 6 years and then be unable to threaten to leave the conference if they don't get their way?

They don't have a choice, really. If they want to stay in the conference, they sign. If they don't, they walk away from a pile of shared conference revenue. tLHN isn't going to make up for those lost dollars. AND, if they were to walk away - where would they go? The Pac isn't going to look at them again. The SEC and B1G aren't interested in their baggage and their network. The ACC is looking unlikely. The Big East is on a respirator. The only other choice is Indie, and then they're still losing all of the shared conference revenue. I doubt ESPiN would be willing to make up the difference completely. Follow the money. The money follows conference affiliation, and texass always follows the money. Also, we just saw a very statesman-like appearance from Boren, JC, and Stoops. They talked about equality even if OU takes a financial hit. If texass walks away from that, then once again, they will have shown the nation that they aren't the least bit interested in compromise or equality. OU takes the high road, and texass looks like an azz.


Just think about it for a minute. If UT agrees to that then they suddenly becone just another vote in the conference. If they get out- voted they cannot pout and threaten to leave since they will lose their media rights for 6 years. I know Texas has deep pockets byt I don't think even they could take a financial hit like this. So in essence UT becomes 1 of 9 votes( or 1 of however many programs are in the conference after expansion)

Which gets us back to what started this whole chit-storm: conference equality. Whether or not they wanted it, unless they go Indie, texass has just had it shoved up their arse.


So either Boren is a negotiating genius and took Deloss to school or none of this has been finalized and Boren looks even more stupid than he did before.

Considering he held his own in negotiations with the likes of Ronald Reagan, Tip O'Neill, Strom Thurmond, Howard Baker, Robert Byrd, Ted Kennedy, and John Stennis, I bet he took DeLoss to more than school. But I really don't think there was much negotiating. I think he got the rest of the conference on board, and gave texass the news.

[Mr. Nuke]

Its more than 1 or 2 million a year. The Big 12 signed a deal with Fix last year for 1.1 BILLION for its tier 2 rights alone over 13 years. You do the math.
In 2008-2009 the latest numbers we have for Big 12 revenue distribution, Texas earned $11.8 million. If the revenue had been distributed equally among all 12 schools, Texas and everyone else would've recveived $10.1 million. Or a net difference of $1.7 million for Texas. Equal revenue sharing of tier 1 and 2 revenue for them isn't an issue when you are getting $15 million for 3rd tier rights on the side. The Big XII had already agreed to modify the revenue sharing formula so the difference going forward is even less.



That doesb't include the ABC/ESPN tier 1 revenue which will be coming up for renogotiatuon in 4 years. The tier 2 rights by themselves are worth ovwr $8.5 million per school per year. Now add the tier 1 rights to that. Multiply that by 6 years. Are you saying Texas wiukd leave that kind of money on the table?
No. I don't think you are understanding what I'm saying at all. Texas is thrilled by this and lost no leverage at all. They aren't going anywhere nor did they really want to go anywhere. If they get to keep their share of tier 1+2 money in the Big XII with a 9-12 member Big XII plus their LHN money that is what they wanted, and they clearly won.

[Mr. Nuke]

They don't have a choice, really. If they want to stay in the conference, they sign. If they don't, they walk away from a pile of shared conference revenue. tLHN isn't going to make up for those lost dollars. AND, if they were to walk away - where would they go? The Pac isn't going to look at them again. The SEC and B1G aren't interested in their baggage and their network. The ACC is looking unlikely. The Big East is on a respirator. The only other choice is Indie, and then they're still losing all of the shared conference revenue. I doubt ESPiN would be willing to make up the difference completely. Follow the money. The money follows conference affiliation, and texass always follows the money. Also, we just saw a very statesman-like appearance from Boren, JC, and Stoops. They talked about equality even if OU takes a financial hit. If texass walks away from that, then once again, they will have shown the nation that they aren't the least bit interested in compromise or equality. OU takes the high road, and texass looks like an azz.
Again though, this is exactly the end result Texas wanted. They don't care if you share the tier 1 and 2 revenue equally in the Big XII. Yeah it may be a $1 to $2 million loss to them there, but they get to keep a conference and their $15 million LHN side project.




Which gets us back to what started this whole chit-storm: conference equality. Whether or not they wanted it, unless they go Indie, texass has just had it shoved up their arse.

If that is how you want to justify it yourself more power to you. I'd say Texas is all for "conference equality" if they get to keep the conference by sacrificing $1 or $2 million in first and second tier rights to keep $15+ million in third tier rights intact.

[prrriiide]

Texas is thrilled by this and lost no leverage at all.

You're delusional if you think texass lost no leverage at all. They just went from having Security-council veto-power to being just one vote in the general session. If Iowa State wants something that texass doesn't, they can get it if enough of the rest of the conference agrees. That isn't how it's been since the dawn of the BigXII. It's always been "we gotta go ask texass first." By handcuffing texass' tier 1 and 2 rights, the BigXII has effectively kicked them out of the driver's seat.

And about that precious LHN...if the conference decides as a group that it is giving texass any kind of unfair advantage vis a vis recruiting, you can bet that they can AND WILL demand that they either correct the issue or pull the plug. And the NCAA will come down on the side of the conference in terms of recruiting advantages. If texass doesn't like it, they can try their luck as an Indie because no other conference will take a second look at them if they screw this up.

[Mr. Nuke]

You're delusional if you think texass lost no leverage at all. They just went from having Security-council veto-power to being just one vote in the general session.
They are also set for 20 years with their 3rd tier agreement. A 6 year agreement that no one can leave the conference does nothing but benefit Texas. They are guaranteed the 1st and 2nd tier revenue from the Big XII over that period and a place to park their teams. Unless you are 100% convinced they wanted independence for certain for all of their sports within 5 0r 6 years, I'm not sure how you can argue that this isn't a benefit for Texas.


If Iowa State wants something that texass doesn't, they can get it if enough of the rest of the conference agrees. That isn't how it's been since the dawn of the BigXII. It's always been "we gotta go ask texass first." By handcuffing texass' tier 1 and 2 rights, the BigXII has effectively kicked them out of the driver's seat.
It has always been in this conference if you have 75% of the vote you can do whatever you wanted. Not so coincidentally OU, Texas, A&M, and Nebraska formed a veto block together on most of the more significant issues like revenue sharing. I'm not really sure what ISU is going to propose and get 7 out of 9 votes that well either 1) really anger Texas or 2) harm them in anyway.


And about that precious LHN...if the conference decides as a group that it is giving texass any kind of unfair advantage vis a vis recruiting, you can bet that they can AND WILL demand that they either correct the issue or pull the plug. And the NCAA will come down on the side of the conference in terms of recruiting advantages. If texass doesn't like it, they can try their luck as an Indie because no other conference will take a second look at them if they screw this up.
The NCAA lost a fairly important lawsuit in part perpetuated by Oklahoma that limits what they can do regarding television. If there is a recruiting advantage like high school games, then yeah they can come down on it. That said, Texas doesn't need high school games. They are guaranteed the $300 million over 20 years regardless of what ESPN has to put on that network. The conference said they can have the network. There is no going back on it. That is why the news that everyone would have to stay and thus keep the conference going for 6 years is great news if you are in Austin.

[delhalew]

I'll say it again. With the amount of money Texas brings in outside of TV moneys, for any of you to be jealous of the LHN money is ludicrous.

Keeping our conference stable and viable is worth more than money. The problems with The LHN have never been about money. It's about them trying to backdoor their way into conference games and recruiting advantage. We now have the ability to stop that.

[Mr. Nuke]

Keeping our conference stable and viable is worth more than money. The problems with The LHN have never been about money. It's about them trying to backdoor their way into conference games and recruiting advantage. We now have the ability to stop that.
The recuiting aspect likely yes due to NCAA backing. The conference game I'm not so sure on. Given the way the Big XII has always dealt with Fox, the conference essentially sells them the rights to everything other than tier 1 (the current ABC contract). If Fox decides to sell a game back to ESPN for the LHN, I'm not sure the conference has much recourse until the Fox contract and or the LHN contract expire. The ball was certainly dropped at some point in the process from the conference. The question is can it be rectified at this point.

[EatLeadCommie]

doesn't Texas have to pay back ESPN quite a bit of money for getting the LHN on its feet?

The rest of the BXII should start its own network and divide the revenues amongst everybody but Texas.

[Mr. Nuke]

doesn't Texas have to pay back ESPN quite a bit of money for getting the LHN on its feet?
No. Texas is guaranteed a minimum of $300 million over 20 years. If ESPN makes money on the LHN, Texas then gets 70% of any profits. Unlike the BTN, Texas isn't on the hook for start-up costs.

[SoonerMom2]

Fox Sports tonight I was listening to while at the airport said that there is no conference in America who would want TX -- none after what they have all witnessed with their greed and arrogance. They are blaming TX for the SW Conference breakout, and CO and NE leaving last year, and A&M leaving this year because they made sure Beebe did everything they wanted including conference scheduling to make OU play at OSU two years in a row. They declared it was done on purpose.

[prrriiide]

No. Texas is guaranteed a minimum of $300 million over 20 years. If ESPN makes money on the LHN, Texas then gets 70% of any profits. Unlike the BTN, Texas isn't on the hook for start-up costs.

And therein lies the rub.

I don't know where ESPiN and texass have gotten their revenue figures, but from my experience (over a dozen years at cable networks), they are ambitious, to put it nicely. They want 40¢/per sub/per month. They might get that, but I doubt it. Only 4 sports networks get that much: ESPN ($4.08), FOXSportsNet ($2.37), NFL (75¢), and ESPN2 (54¢). MLB gets 24¢. NBATV gets 22¢. ESPNU only gets 16¢. Those three networks all have a much wider appeal than tLHN.

Compound that with the lack of numbers: tLHN is only going to be in texass. A generous figure puts the cable/sat sets in texass at about 7.5 million. Extrapolating the numbers (assuming 40¢/sub/mo) puts the cash flow at around $540 mil over 15 years. If texass is guaranteed $300 mil of that, that leaves only $240 mil in start-up and operating costs. Start-up and operating costs for a cable network can blow through that number in a matter of months depending on how you do it. Over the course of a 15 year run, it isn't going to come close to covering the gap in ad rates, which I believe is going to be substantial. I will be very surprised if they get more than 25¢/sub/month, and that will make the revenue projections even more shaky.

You have to understand how cable works as opposed to on-air. It's all about the number of subscribers. Yes, you get the monthly sub rate, but that number also dictates how much you can charge for advertising. It's only after you reach market saturation that ratings really play much of a part. tLHN will never reach market saturation, simply because it's not even a regional network. You won't be seeing much in the way of Home Depot or Ford or McDonald's or MicroSoft ads on tLHN. Why would they spend that money when their ads are already shown on 75 other basic cable networks in the same market? So tLHN will be left with statewide and local availability spots, 3D sunglasses, Pos-T-Vac and Extenze. Those advertisers don't pay chit. That's why you see them late at night when the rates on the other networks (the national ones) are a fraction of prime-time. In short, tLHN will be charging 3 a.m. ad rates during prime time for most of their programming, because advertisers won't be willing to pay any more than that. The cost/benefit is not there. In addition, the MSO gets a cut of all of the statewide and local ads, so the network doesn't even get full-rate for those.

So even if texass isn't on the hook for start-up costs, ESPiN is. And the operating costs.

Based on my experience, tLHN is going to be a money pit for ESPiN and the Mouse. Give it 6 months or 6 years. It just doesn't have a wide enough appeal even in the state of texass to be a money-maker on the advertising end of the equation, and there aren't enough sets in texass to make it a player in terms of monthly sub rates, assuming that ESPiN can (and they can) force the individual MSOs to carry tLHN as part of the ESPiN family package deal.

THAT is why we have been hearing the noise out of Bristol (cleverly diverted through Austin) about extra conference games, HS content, and the like. ESPiN knows that without that content and those assets, tLHN will not make money for either the company or the school. Even with that content and assets, it's an iffy proposition.

And ESPiN is a business. If tLHN becomes the money pit that I foresee, they will pull the plug long before 15 years and $300 million come texass' way.

Quite frankly, I was astonished that ESPiN did the deal in the first place, and I'm not the only one in the cable industry that was. That $300 million dollar guarantee and a picture of George Washington will get you a cup of coffee at Dunkin'.

[MyT Oklahoma]

:pop:

[kcboom]

Pretty sure tLHN went nationwide on Verizon FIOS?

[prrriiide]

Pretty sure tLHN went nationwide on Verizon FIOS?

Comparing FIOS (which, as far as I can tell isn't even available in texass) to the big players like ComCast, Cox, Charter, or TimeWarner is like comparing a pea shooter to an Abrams. Those four companies have around 45 million subscribers.


Estimates on December 31, 2009, were 3.4 million Internet customers and 2.86 million for FiOS TV, with availability down to 12.2 million premises.

Verizon announced in March 2010 they were winding down their FiOS expansion, concentrating on completing their network in areas that already had FiOS franchises but were not deploying to new areas.[/URL]

[URL]http://en.wikipedia.org/wiki/Verizon_FiOS (http://en.wikipedia.org/wiki/Verizon_FiOS#cite_note-15)

Putting tLHN on FIOS is like putting a french college soccer team network on the Buckeye Cable System. It's on, but nobody who can get it gives a damn.