ESPN-Texas Contract For Longhorn Network

Thanks to spectacular work by the guys at The Midnight Yell the fifty page Texas-ESPN contractual agreement for the Longhorn Network is now available for public review. Check it out here. Reading through the agreement confirms the worst fears of the remaining Big 12 members: Texas has little to no interest in remaining committed to the Big 12 long term. In fact, the contract is riddled with references to Texas leaving the conference and becoming an independent.

Again, I’d direct you to the fine work from the guys at the The Midnight Yell, but in hastily reading the entire document tonight here were eight things that jumped out at me.

 1. If Texas leaves the Big 12 ESPN receives an exclusive sixty day window to negotiate for all of Texas’s athletic rights.

“In the event that UT determines not to participate in any athletics conference in one or more sports, UT agrees to provide ESPN a right of first negotiation of 60 days with respect to its television telecast rights..”

What’s more Texas also grants ESPN 48 hours to match the offer of any other entity.

Significantly the language allows this negotiation window to open “in one or more sports.”

So could Texas football go independent and cash in while the rest of the sports remained in a conference?

Yep.

2. ESPN agrees to make its best efforts to obtain the Texas high school state championship games to air.

And you thought the weekly high school games were controversial?

Wow.

What if Texas high school kids fought all year for the opportunity to play in a Texas state title game aired on the Longhorn Network? You think that might impact recruiting?

It remains to be seen whether the NCAA would even allow this to happen, but it’s interesting that ESPN and Texas agreed to specifically bid for these rights.

3. Woe unto you if you are unfairly critical of Texas on the Longhorn Network.

While ESPN agrees to spend $13 million on a studio and expects to hire 75 employees to work on the network, those employees better be Longhorns through and through.  

Here’s what I’ll call the “Don’t Mess With Texas” provision of the agreement:

“in the event that UT reasonably determines that any on-air talent does not reflect the quality and reputation desired by UT for the network based upon inappropriate statements made or actions taken by such talent and so notifies ESPN, ESPN will cause such talent to be replaced (and will in any event no longer allow them on air following such notice).”

Yep, Texas controls who works on the network and what they say, not ESPN.

So much for independent thought and non-homerism.

4. ESPN expects the network to cost $26 million a year and Texas will receive $ 10,980,000 per year growing at a 3% rate of increase.

But once that revenue reaches $295 million and ESPN recoups its investment, Texas will begin to receive 70% of the adjusted gross revenue.

At least I think this is true, some of y’all who are better at business can read these provisions and let me know if that’s correct. But if I read it correctly that means that Texas will reap a bonanza of cash once the network is paid for in a few years.

The potential payout to Texas is, I think, much greater than previously reported.

5. There’s a broad contractual provision that appears to prohibit Texas from being affiliated with any other network.

So those dreams of a Big 12 network? They seem pretty stifled by this language. “Neither IMG nor UT will during the Term and within the Territory i. participate in or permit the development of another “Longhorns Network” or similar network enterprise (regardless of name) related to UT”

The term is twenty years and the territory is defined as Texas. 

Again, there are other provisions in here, but that language seems to spell out that Texas doesn’t have any desire to be a part of any Big 12 network.  

In fact, more alarmingly for the Big 12, Texas may not even have the contractual right to be a part of a Big 12 Network.

6. Under the television portion of the contract: “the parties acknowledge their mutual desire that the Network telecast no less than two (2) such regular season games per college football season”

So far there is just one football game to be aired on the Longhorn Network. Anyone else think that’s going to grow? Well, the parties are mutually agreeing to “no less than two.”

7. Texas agrees to help ESPN gain “neutral or road games” to air a variety of sporting events.

It probably makes business sense to do that, but do you think other Big 12 schools want the Longhorn Network coming on their campus to carry games? I’d think not.

8. What’s redacted from this agreement?

There are a great deal of details included in here. Probably a lot of details that neither ESPN nor Texas really wants to be made public. But what sections are redacted and why? If we’ve got ESPN’s entire business plan for the network — don’t you think Fox and Comcast love to know the cost structure of their competitors? — what is so controversial that it can’t be made public?

I’d be nervous about that if I was another Big 12 school. Really nervous.

Again, lots of y’all are smarter than me and I’ve only had 45 minutes to review the entire document. Dive in to the contract here and tell me what I missed and what other important details are included.