With college football season looming, Longhorn Network scoring few points with pay-TV operators

editor's corner

Jim O'Neil

The Texas Longhorns kick off their college football season against Rice in less than two weeks, but ESPN's fledgling Longhorn Network--which is set to launch Friday--is facing tough times as it struggles to negotiate the first carriage deals of its brief history with pay-TV operators, who are unsure just what they're getting for their money.

The network, which is worth about $300 million to the University of Texas over the next 20 years, hasn't signed a single major carrier in the four states--Texas, Louisiana, New Mexico and Oklahoma--in which the channel plans to be available.

"The Longhorns are arguably the strongest brand in the state of Texas, and we are confident that, based on the content and the consumer demand, this new cross-platform enterprise will be a success for all involved," ESPN told Sporting News.

But that brand awareness hasn't helped the network cut deals with AT&T (NYSE:T) for carriage on U-verse, Verizon (NYSE:VZ) and its FiOS TV, or with Comcast (Nasdaq:CMSA), Time Warner Cable (NYSE:TWC), Charter, or satellite providers DirecTV (Nasdaq:DTV) or Dish Networks (Nasdaq:DISH), all key service providers the network needs to land.

But even days before the scheduled launch, and with the opening game looming Sept. 3, the network, which is seeking 40 cents per service provider subscriber each month, still hasn't been able to guarantee its content. Part of the reason is that operators still don't know what content they'll get.

Long Horn Network

The Long Horn Network will be available in Texas, Louisiana, New Mexico and Oklahoma.

The network promises Texas practices, insider features, at least two Texas games--one of which would be against a Big 12 foe--and Texas high school football. But, negotiations are ongoing for which college games will be on the LHN, as the Big 12 Conference has been has been vague in its own dealing with the network, saying that while the LHN can carry a Texas-Big 12 game, "we just want to make sure there aren't any unintended harmful consequences to any other members of the conference."

The NCAA, meanwhile, recently ruled that high school games can't be carried on a university-affiliated network.

So, while ESPN continues to toe the company line that says it is "in active discussions with all of the distributors, and we expect there to be an announcement in the new few weeks," the reality is that those deals may come down to the wire.

As a Charter Communications spokesman told the Ft. Worth Star-Telegram: "We've had discussions with ESPN to try to come up with a reasonable agreement to carry the Longhorn Network, and so far we haven't reached one. As of now, we don't have a timetable."

In addition to content, the issue remains of what service tier the network fits. LHN wants it placed in the basic service package to guarantee penetration, and the 40 cents per each operator customer it would get. Operators, however, are more prone to put it into a sports package, which would leave the network with 40 cents per subscriber to the package.

LHN is facing the same problem its predecessor, the Big Ten Network, faced when it launched in 2007.

While it found an early home with AT&T's U-verse, and on DirecTV, cable operators were slow to add the channel devoted to all things Big 10. The MVPDs said--and there's no surprise here--that the network was asking for too much money.

But, it reached 30 million households within 30 days of its launch and now is available in 19 of the 20 largest markets.

Will the Longhorn Network manage to pull off the same success? Stay tuned.--Jim

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