Is Longhorn Network Roadblock to Texas Joining Pac-12?
Multiple reports are surfacing that Oklahoma is on the verge of joining the Pac-12. The next logical question is: What about Texas?
It was widely reported that University of Texas didn’t join the Pac-12 last year because it wanted to form its own network. We now know that the Pac-12 was planning regional networks across its footprint. A school with its own network didn’t fit into those plans.
The seemingly obvious choice for Texas is to go independent. Texas can control its own destiny. The last time numbers were released, Texas took home $11.8 million for the 2008-2009 school year in conference distributions. Texas’ share of LHN revenue for the 2011-2012 school year will be $10.9 million, increasing by 3% each year thereafter.
According to the LHN contract, ESPN would have the right of first refusal to all television rights held by the conference if Texas became an independent, which is currently rights to all but one home football game. If Texas is getting $10.9 million a year for one, and possibly two, home football games (and some other sporting events that essentially have nothing to do with the dollar figure put on this contract), it’s safe to assume they could make up what they’re losing in conference distributions by contracting with ESPN for the remainder of their home games.
Two other issues arise with independence: scheduling and no automatic BCS berth. Scheduling is a tough one for sports outside of football, but they could simply join another conference for every sport except football. No longer being in a conference with a BCS bowl berth isn’t much of an issue either. They’re the Longhorns. It’s not like they’ll be left out if they have a record deserving of BCS bowl inclusion.
Let’s say independence isn’t appealing, however. Could the Longhorns join another conference? The Pac-12 perhaps?
There’s been a lot of speculation that Texas would be precluded from joining the Pac-12 because of the Longhorn Network. After all, the contract has been signed and the network is on the air.
I pulled out my copy of the Longhorn Network contract (obtained by Twitter user @spadilly via open records request and posted on Midnight Yell) and here’s what I found. First, the entire agreement is subject to the rules and regulations of any conference of which Texas is a member. Not surprisingly, there’s also a provision that covers Texas going independent or changing conferences. Here’s what it says in terms of Texas joining another conference:
…in the event that UT determines during the Term to become a member of an athletics conference other than the Big 12 Conference or not to participate in any athletics conference, UT agrees to continue to grant and provide (or cause IMG to continue to grant and provide) to ESPN the Television Rights set forth in this Agreement.
What exactly are these Television Rights? Let’s look at just football for the 2012 season and beyond:
With respect to the college football season commencing in 2012, and each season thereafter during the Term, UT will use its best efforts to provide ESPN all play-by-play and commentary rights for a minimum of one (1) regular season and/or post-season intercollegiate men’s varsity home football game and will provide ESPN all play-by-play and commentary rights for the Annual Spring Football Game.
The provision goes on to say the parties have a “mutual desire” that LHN televise no less than two home football games per season. For this discussion, that essentially means nothing.
What does the rest mean? Basically, it means Texas is only contractually obligated to allow LHN to air the Annual Spring Football Game. Texas has to use “best efforts” to supply LHN with one home football game. Essentially, however, if they can’t…well, they can’t. No harm, no foul.
For all other sports, the provision begins, “As permitted by Conference regulations and agreements…” And that means…you guessed it, no obligation.
There is also a termination provision that gives ESPN the ability to terminate the contract if a “material portion of the material athletic events” cannot be provided under the terms of the agreement. There are a few sections of the contract that were redacted before the contract was provided pursuant to the open records request, but none of the provisions I see specifically require Texas to pay any sort of fee or penalty upon termination.
The practical effect of all this is that LHN will have nothing to air if Texas goes to the Pac-12, absent some sort of concession by the conference. Since ESPN and the Pac-12 are already partners, ESPN would likely be a part of the discussion before Texas is added and everything would be worked out by mutual agreement. I do not believe the Pac-12 would allow Texas to keep LHN.
I think LHN would morph into the Pac-12’s Texas regional network. Either the Pac-12 could make an exception to their policy of solely owning its regional networks and work out a joint ownership arrangement with ESPN, or perhaps the Pac-12 could purchase LHN (which would likely mean facilities and receiving an assignment of any agreements with cable/satellite providers) from ESPN.
The bottom line is that the Longhorn Network will not prevent Texas from joining the Pac-12 if that’s what all the parties involved want.
This article offers the personal observations of Kristi Dosh, and does not represent the views of her law firm or its clients. Any information contained herein does not constitute legal advice. Consult your own attorney for legal advice on these matters.