The myth of OU and "equal sharing"

2,739 Views | 9 Replies | Last: 14 yr ago by Carp Bear
SouthBayPhenom
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On a few threads some posters are stating that OU wanted into the Pac12 because the Pac12 would have equal sharing of revenues, and that's what they want.

OU currently is one of 3 schools in the Big12 (OU, UT, A&M) that currently receive an unequal (and higher) share of the Tier 1 revenues (apparently Tier 2 is shared equally) - this was negotiated in last year when the Big12 stayed together.

So let's not start putting halos on OU.

Now, they may have wanted out due to the LHN - in which UT gets to keep the revenues from all of their Tier 3 rights. But OU signed on last year knowing full well about the LHN and UT getting all those Tier 3 rights. Further, OU apparently has also explored their own network as well - so their objection is likely less due to the fact of the existence of the LHN - but rather due to the success UT had in marketing and getting paid for the LHN.
Cal84
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SouthBayPhenom;575487 said:

Now, they may have wanted out due to the LHN - in which UT gets to keep the revenues from all of their Tier 3 rights. But OU signed on last year knowing full well about the LHN and UT getting all those Tier 3 rights. Further, OU apparently has also explored their own network as well - so their objection is likely less due to the fact of the existence of the LHN - but rather due to the success UT had in marketing and getting paid for the LHN.


First of all, all B12 teams keep their Tier 3 revenues. UT and OU are not unique in that respect. That's the way it is handled in the vast majority of FBS conferences. In fact even the P12 "equal revenue" T3 policy is a bit unspelled out. Historically Tier 3 revenue has been mostly the sale of radio broadcasting rights. At this point we do not know if and how those would be rolled into a P12 TV broadcast channel. Certainly as this point with no regional channel off the ground, I'm betting each P12 schools still monetizes it's own radio rights and keeps that money.

Secondly OU did not know about LHN at the time the B12 signed its new TV contract last year. LHN post dates that event. OU did of course know that UT would get all the money from its T3 rights - as I said before that is true of all B12 teams.

Third, OU has done more than explore setting up its own channel. They've already sunk in about $5 mm IIRC into start up costs. But here's the problem - what no one realized, not OU, not Texass, not ESPN, is that its actually not cost effective to have a single school network. Potential subscriber density is too low to attract carriers. And the fixed costs can't be spread over enough revenue producing events. Everybody looked at the success of BTN and figured it would be easy. But BTN by its very nature has x12 the subscriber density and revenue broadcasting events that a single school channel does. That's why an OU network is pretty much DOA. The only reason LHN is better off is that ESPN is contractually obligated to pay UT for its T3 content for 20 years. But as a business LHN loses money, a LOT of money.

Still, even if UT's business partner is getting burned, UT is still getting paid - and with no prospect for OU to replicate that revenue stream, that's a disadvantage. Now you can see why OU was interested in the P12. A P14 regional channel would give them a weapon to fight with vs. LHN.
SouthBayPhenom
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Cal84;575516 said:

First of all, all B12 teams keep their Tier 3 revenues. UT and OU are not unique in that respect. That's the way it is handled in the vast majority of FBS conferences. In fact even the P12 "equal revenue" T3 policy is a bit unspelled out. Historically Tier 3 revenue has been mostly the sale of radio broadcasting rights. At this point we do not know if and how those would be rolled into a P12 TV broadcast channel. Certainly as this point with no regional channel off the ground, I'm betting each P12 schools still monetizes it's own radio rights and keeps that money.

Secondly OU did not know about LHN at the time the B12 signed its new TV contract last year. LHN post dates that event. OU did of course know that UT would get all the money from its T3 rights - as I said before that is true of all B12 teams.

Third, OU has done more than explore setting up its own channel. They've already sunk in about $5 mm IIRC into start up costs. But here's the problem - what no one realized, not OU, not Texass, not ESPN, is that its actually not cost effective to have a single school network. Potential subscriber density is too low to attract carriers. And the fixed costs can't be spread over enough revenue producing events. Everybody looked at the success of BTN and figured it would be easy. But BTN by its very nature has x12 the subscriber density and revenue broadcasting events that a single school channel does. That's why an OU network is pretty much DOA. The only reason LHN is better off is that ESPN is contractually obligated to pay UT for its T3 content for 20 years. But as a business LHN loses money, a LOT of money.

Still, even if UT's business partner is getting burned, UT is still getting paid - and with no prospect for OU to replicate that revenue stream, that's a disadvantage. Now you can see why OU was interested in the P12. A P14 regional channel would give them a weapon to fight with vs. LHN.


I actually agree with most everything you say here, but one factual point you have wrong: while LHN hadn't been formally announced, it was well in the works when the Big12 "got back together" last year, all parties knew about it and agreed that UT would have its own network and that other Big12 members wouldn't have any claim to their T3 rights.

My point is that some have painted "poor little OU" as somehow being victims here, and they were just running to the Pac12 to avoid all this evil unequal revenue sharing - which they were already the beneficiary of. They aren't the angel to UT's devil in all this. Rather, UT simply did a better job of monetizing their T3 rights and OU doesn't like - not because it's wrong or immoral, but because they won't be able to replicate it.
Cal84
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SouthBayPhenom;575524 said:

My point is that some have painted "poor little OU" as somehow being victims here, and they were just running to the Pac12 to avoid all this evil unequal revenue sharing - which they were already the beneficiary of. They aren't the angel to UT's devil in all this. Rather, UT simply did a better job of monetizing their T3 rights and OU doesn't like - not because it's wrong or immoral, but because they won't be able to replicate it.


If the argument is that OU benefited more than most in the B12 and supported such a system, and now sees that system not as beneficial to them, you'll get no disagreement from me.

My point is that they are disaffected AND willing to accept a new regime of equal revenue sharing rules, aka P12-style rules. And that very strongly differentiates them from a school located south of them that does not.
davetdds
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Is SBPhenom actually DeLoss Dodds. C'mon now DeLoss, Is that you????
Carp Bear
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My father-in-law lives in Austin and claims that the Longhorn Network is not available on cable (Time Warner is the local cable operator) in the same town where the university is located. Maybe he needs to switch to the Dish or DirecTV to get it. I just don't get Texas!
Cal_Fan2
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Carp Bear;575696 said:

My father-in-law lives in Austin and claims that the Longhorn Network is not available on cable (Time Warner is the local cable operator) in the same town where the university is located. Maybe he needs to switch to the Dish or DirecTV to get it. I just don't get Texas!


They don't have it either....here is who has it...

Quote:

Yesterday, we noted that the LHN had reached a deal with Dallas/Ft. Forth provider Verizon FiOS, which at least allowed the LHN to keep pace with that media market.

However, in a press release sent out by the LHN, it's become evident that Verizon is far and away the biggest media catch.

And that's not a good thing.

Consolidated Communications, En-Touch Systems, E-Tex Communications, Bay City Cablevision, Mid-Coast Cablevision and Texas Mid-Gulf Cablevision* are the carriers who have signed on with the LHN. Consolidated Communications, Bay City Cablevision, Mid-Coast Cablevision and Texas Mid-Gulf Cablevision will launch the network this evening; Verizon, En-Touch Systems, E-Tex Communications will launch the network next Thursday.

(*writer's note: to answer your question, no, we don't know who any of those carriers are, nor are we ready to dismiss the possibility that they are operated in/around somebody's basement)


:rollinglaugh:....:hammer:

Quote:

Noticeably absent from that list of carriers, though, is Time Warner Cable, Charter Communications, Dish Network and DirecTV. Any one of those can sign on at a later point for all we know, they're playing the role of early/late majority more than innovators/early adopters but it has to be disappointing for the LHN not to have landed Time Warner or a major satellite provider.


http://collegefootballtalk.nbcsports.com/2011/08/26/lhn-releases-list-of-carriers-twc-directv-nowhere-in-sight/
Cal84
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No major cable/sat provider carries LHN. Not Time Warner, not Comcast, not Dish or DirecTV. No major carrier. And none are likely to for the foreseeable future. Largest provider to carry LHN is Verizon FioS, which is national but has almost no footprint in Texas. And even on VErizon FioS LHN is a premium channel.

The cable co's aren't dumb. They have plenty of experience with carrying sports channels. They know what the ratings of BTN are. But LHN's programming inventory of games is 2. In an entire year. Over the course of a year, a cable co's 3rd food channel will have higher ratings than LHN. Why would a cable co. add LHN instead of another Spanish language channel? LHN's only hope is to be able somewhere down the road to be able to broadcast more UT football games. Until then it's sitting on the runway w/o enough power to take off.
Cal_Fan2
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Cal84;575709 said:

No major cable/sat provider carries LHN. Not Time Warner, not Comcast, not Dish or DirecTV. No major carrier. And none are likely to for the foreseeable future. Largest provider to carry LHN is Verizon FioS, which is national but has almost no footprint in Texas. And even on VErizon FioS LHN is a premium channel.

The cable co's aren't dumb. They have plenty of experience with carrying sports channels. They know what the ratings of BTN are. But LHN's programming inventory of games is 2. In an entire year. Over the course of a year, a cable co's 3rd food channel will have higher ratings than LHN. Why would a cable co. add LHN instead of another Spanish language channel? LHN's only hope is to be able somewhere down the road to be able to broadcast more UT football games. Until then it's sitting on the runway w/o enough power to take off.


Now I remember what the LHN reminded me of...........





GivemTheAxe
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Cal84;575709 said:

No major cable/sat provider carries LHN. Not Time Warner, not Comcast, not Dish or DirecTV. No major carrier. And none are likely to for the foreseeable future. Largest provider to carry LHN is Verizon FioS, which is national but has almost no footprint in Texas. And even on VErizon FioS LHN is a premium channel.

The cable co's aren't dumb. They have plenty of experience with carrying sports channels. They know what the ratings of BTN are. But LHN's programming inventory of games is 2. In an entire year. Over the course of a year, a cable co's 3rd food channel will have higher ratings than LHN. Why would a cable co. add LHN instead of another Spanish language channel? LHN's only hope is to be able somewhere down the road to be able to broadcast more UT football games. Until then it's sitting on the runway w/o enough power to take off.


Not a bad idea. How many Spanish speaking fans does UT have.
LHN could carry 2 college football games in English; then fill in the rest of its schedule with futbol games in Spanish.
Carp Bear
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Does anyone remember OU making a big stink about the loss they took a few years back in Eugene? They did get robbed by the Pac 10 (now equally bad Pac 12) refs. Oklahoma was threatening of never playing a non conference game with our favorite conference again. They were leveraging a move to the Pac 12 to get more money out of the Little 9. I really like the fact Larry Scott took Oklahoma's leverage away. Plus one Stoops in the the conference is enough.
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