The Texas/ESPN Television Deal: What It MeansPosted by rtmsf on January 21st, 2011
Andrew Murawa is an RTC correspondent.
When it was announced on Wednesday that the University of Texas and ESPN had come to terms on a 20-year, $300 million agreement to create a 24-hour television network largely dedicated to broadcasting Longhorn sports, we entered a new era of college sports on a variety of different levels. What exactly this new era will look like remains to be seen, but the Texas move, which they have been angling in on for years, but most intensively since they turned down the Pac-10’s offer this summer, will reverberate around the world of college athletics.
First let’s look at some of the details of the deal. The network, launching in September, will be developed and managed by ESPN. According to the Austin American-Statesman, of the $300 million, 82.5% or $247.5 million is guaranteed to Texas, with the other $52.5 million promised to IMG College, which handles marketing and licensing for the university. According to Texas president Bill Powers, the university will receive about $10 million per year during the first five years of the contract, half of which will “be devoted to academic and faculty support” and half of which will head to UT Athletics. This $10 million annually will grow over the course of the contract, and Texas can expect an average of $12.4 million per year above and beyond their share of the Big 12’s television agreements. Currently, Texas receives approximately $14-15 million from those existing agreements (a number which will grow to $20 million next year with the departure of Nebraska and Colorado), and with the additional income from the new deal will earn more than $30 million per year from their television deals. All told, this new network is only guaranteed one football game and eight men’s basketball games, although it may get a few more in the early years of the contract and perhaps even more down the road. But, the crux of these numbers bears repeating: ESPN essentially gave Texas $247.5 million to air one football game and eight basketball games a year over the next 20 years.
This is by no means the first example of an individual school striking out on its own to pursue its own television contracts. Notre Dame’s football deal with NBC in 1991 was the first such example, and it was indeed a blockbuster, but given their lack of ties to a conference there were few immediate ripples. Gonzaga basketball has its own television deal with Spokane’s KHQ-TV and FSN Northwest, independent of the West Coast Conference’s television deals. And BYU, just this past summer, decided to break away from the MWC and move ahead as an independent in football, with a brand new contract with ESPN and with plans to air additional sports content on its own network, BYUtv. But given the size and stature of the Texas athletic department, this development is a whole different animal, and its repercussions are numerous and considerable.
Perhaps the biggest impact of this move will be felt across the Big 12. With Texas earning perhaps $15 million more than any other school in the conference, financial competitive balance goes right out the window. Sure, money doesn’t buy you players in college athletics (yes, slap on the blinders and repeat that phrase along with me), but Texas just bought themselves more exposure than all of their competitors in their conference and the ability to offer more in the way of sports facilities to its student-athletes. That alone isn’t going to make Texas a consistent national title contender in either football or basketball (and really, once again, as we learned this summer, none of this financial maneuvering going on in college sports is really about basketball – sorry hoops fans), but it sure is going to help Texas coaches when they hit the recruiting trail. And given that Texas football can already basically pick and choose from the cream of the crop of Texas high school athletes, this is just another little bump in their favor.
Before we finish up the recruiting topic, let’s take a little side trip. This is going to be a 24-hour network. It will air one live football game and eight live men’s basketball games per year. There will be three hours of non-sports university-related programming per day, there will be coverage of women’s basketball and many of the Texas Olympic sports (although, curiously, Texas’ baseball program – the most successful program on the campus – is excluded from this deal) and then there will be re-runs of Texas football and men’s basketball games that aired on other networks. That’s not a lot of content there, and even less of the truly compelling type of content that is going to bring ratings to the network and earn ESPN back their money (although Dan Wetzel and Darren Rovell have some good ideas to pitch to the powers that be). But, to fill in some extra time on the network, it is expected that it will televise some Texas high school athletics, and here’s where things get sticky. As Michael Rosenberg of Sports Illustrated points out, there is this little section in the NCAA rule book that says:
Rule 16.4.7.03, Paragraph (e)
13.10.3 Radio/TV Show. A member institution shall not permit a prospective student-athlete or a high school, college preparatory school or two-year college coach to appear, be interviewed or otherwise be involved (in person or via film, audio tape or videotape) on:
(a) A radio or television program conducted by the institution’s coach;
(b) A program in which the institution’s coach is participating; or
(c) A program for which a member of the institution’s athletics staff has been instrumental in arranging for the appearance of the prospective student-athlete or coach or related program material.
Now, I’m no lawyer, but prong “c” there pretty clearly looks out of bounds. A network solely dedicated to the University of Texas broadcasting games in Texas in which prospective UT student-athletes compete would seem to give the Longhorns an advantage over rival schools in not only recruiting student-athletes, but in marketing those prospective student-athletes before they even set foot on campus as collegians.
The other big sticky mess here is Texas’ involvement with ESPN, ostensibly a journalistic organization that should maintain a degree of objectivity regarding the subjects of their journalism. All of a sudden, Texas and their athletic departments are no longer just subjects for ESPN, they are partners. And not just partners, but partners in a wildly speculative $300 million deal. For ESPN to make money on this deal, they need Texas’ football and men’s basketball programs to win games. The more games those teams win, the more eyeballs wind up watching this new Longhorn Television Network and the more money ESPN makes off the deal. Given that ESPN already has plenty of questions about its journalistic integrity (just look at “The Decision” or Dick Vitale’s Duke fixation for two prominent examples), one can easily imagine a scenario where ESPN’s journalists might need to decide between publishing a story critical of Texas athletics and thereby damaging their value or sweeping that story under the rug and giving their $300-million partner a pass. What if ESPN uncovered a story dealing with rule violations that could lead to Texas football losing scholarships? Publish and the flagship program of the new network takes a major hit and maybe ESPN brings in less revenue as a result. Try selling that story to your editor.
The final big question is where college athletics goes from here with regards to television rights packages. There are only a handful of other schools across the country that could pull off this type of deal: big state schools with huge followings and historically excellent football programs – schools like Ohio State, Michigan, Alabama, Florida, Georgia, etc. Sure, the Buckeyes and Wolverines are tied in with the Big Ten Network and are making plenty of money off of that, but you’ve got to assume that there are people in those athletic departments right now doing their due diligence trying to figure out if they can come up with one of these sweetheart deals of their own. While they may be doing just fine as it is, there is no sense in any of those schools leaving available money on the table. Do we get to the point where it becomes each school for themselves, conference affiliation be damned? Much like the near-apocalyptic scenarios that crossed the college sports landscape this summer, we’re not quite to those end times yet, but this Texas move maybe notches us one step closer to the unraveling of college athletics as we know it.