According to SNL Kagan, a media research company, Longhorn Network has lost $48 million in its first five years of operation.
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The initial business plan called for the network to broadcast prominent Texas high school football games, which the NCAA squashed. The LHN receives just two lower-tier Texas football games to broadcast each year. And cable providers were slow to add the station, which charges a fee of just 29 cents per subscriber.
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According to the San Antonio Express-News, ESPN signed a 20-year, $295 million contract, and also agreed to “absorb LHN production costs pegged at an estimated $26 million a year.”
Since then, Texas football and basketball have taken major tumbles, as both Brown and basketball coach Rick Barnes were fired. More recently, the Longhorns also canned athletic director Steve Patterson.
The report mentions that TexasÂ’ deal with ESPN angered Texas A&M, referencing it as one of the dominoes that eventually sent the Aggies to the SEC.
“Those were bigger numbers than even Notre Dame was getting from NBC,” former Texas A&M athletic director Bill Byrne told the Express-News. “I was stunned. What Texas did was extraordinary, and I suspect I was a little jealous.”
The SEC Network reaches an estimated 69 million homes, according to the report. Meanwhile, LHN reaches between 7.5 million and 20 million, depending on whether you trust the SNL Kagan study or ESPN.
More from the report:
The Kagan study says LHN was “on the verge of being a bust” because of its early lack of full distribution by cable and satellite providers but was rescued when DIRECTV signed on last year, bringing in an estimated 1.8 million new subscribers within the LHN footprint of Texas, Louisiana, Oklahoma and New Mexico. That grew LHN’s reach to some 7.5 million subscribers, according to Kagan. So, despite a losing football team, Kagan projects the network will achieve its first profit in 2016, at roughly $2 million on net revenue of $32 million.
DonÂ’t laugh too hard: The LHN still represents a nice financial windfall for the Longhorns, and ESPN appears to be steering the project out of the reeds.
