The Business of Sports

State of Football: Is Texas a Mess?


Until the University of Miami and its football player perk-happy boosters assumed the position for their NCAA spanking this week, sports’ scolds had their sights set firmly on Texas A&M. The reason? That school’s audacious plot to leave the shrinking Big 12 high and dry for college football’s marquee Southeastern Conference (SEC). If and when it flies southeast, Texas A&M is going to be more vulnerable than a PETA activist at an NRA convention. Before then, the Aggies should really stop and take a long look at the home pastures around them.

From “America’s Team,” the Dallas Cowboys, in the NFL, to repeat NCAA gridiron champions, to high school powerhouses with $60 million stadiums (complete with naming rights and luxury suites) and media deals to match, all things outsized in football seem to begin and end deep in the heart of Texas.

Friday Night Lights was not set in Georgia.

But sometimes the next big thing isn’t the best thing—as the University of Texas’s Longhorn Network, and its burnt-orange shower of consequences, is beginning to prove.

Fallout from the Longhorn Network

From the pros to forward-thinking high school programs, media rights deals are front and center in football programs’ arms race to obtain competitive advantage. That knowledge was front and center for University of Texas officials when they partnered with ESPN to launch the Longhorn Network, which will go live in less than two weeks. Indicative of the complexity behind the launch, the Dallas Morning News noted last weekend that “not a single cable, satellite, or telecom carrier in the state has signed on.”

One major obstacle in the Longhorn Network’s launch is controversy surrounding ESPN’s announcing that the Longhorn channel would broadcast Texas high school games in addition to UT sporting events, potentially giving the school a major leg up in recruiting. After outcry by Texas A&M and other schools in the region, including UT’s arch rival Oklahoma, the Big 12 Board of Directors earlier this month approved a recommendation by the conference’s athletic directors for a one-year moratorium on any high school broadcasts by Big 12 members. The NCAA followed suit last week, ruling that no high school games would be allowed to be aired on school or conference networks nationwide.

As the Longhorn Network’s primary backer, ESPN obviously has a major stake in both Texas A&M’s possible departure and in the high school ruling. If Texas A&M bolts for the SEC, that conference would likely be able to renegotiate its current rights deal with ESPN for a bigger number: More inventory equals more money. The cable network also has an existing arrangement with the Big 12 for an exclusive negotiating window for that conference’s media rights within the next two years—that deal could be in jeopardy as well. As the Kansas City Star observes, the normally astute ESPN would have “essentially paid $300 million for something (the Longhorn Network) that will force it to pay millions more for one thing it already bought (SEC broadcasting rights) and lose something else it already paid for (Big 12 rights).”

(The Big 12 spreads its sports broadcast rights around—in April, the conference also signed a 13-year, $1.17 billion contract with Fox Sports.)

Not one to lose its forward momentum, let alone its edge, ESPN this week announced that this fall it plans to launch up to a dozen college-specific websites that will focus on high school recruiting, to better compete with 24/7 Sports and Yahoo!’s (YHOO) Rivals. The first two websites to go up will cover the University of Southern California and … the University of Texas.

Aggies Toe the Line—For Now

Texas A&M is only slightly appeased after the Big 12 and NCAA’s ruling that UT can’t use its Longhorn Network as one more line in its pitch to star high school recruits around the region. Even though it is UT’s biggest in-state rival, Texas A&M has long been stuck in the Longhorns’ shadow—the dynamic even made its way into the Broadway and on-screen hit Best Little Whorehouse in Texas, when Miss Mona’s girls at the Chicken Ranch bemoan having to entertain the Aggies after A&M defeats the Longhorns in the schools’ annual Thanksgiving football game.

Even though the SEC claims the conference is happy the way it is for now, expansion is all but inevitable and the Aggies clearly aren’t giving up. On Monday, the Texas A&M Board of Regents gave university President R. Bowen Loftin unanimous approval to negotiate on the school’s behalf in regard to conference alignment, and Loftin “made it clear the Southeastern Conference is [still] an intriguing option to the Aggies,” according to the Fort Worth Star-Telegram. But Loftin admitted that A&M has much to consider before pulling up stakes and jumping to another conference. One “significant obstacle,” he said, is the “forfeiture of 90 percent of league-related revenues over a two-year period [2010 and 2011] as outlined under Big 12 bylaws,” if A&M joins the SEC by the beginning of the 2012 football season. The school could also face a protracted legal battle over its Big 12 TV contract, and political fallout over walking away from its longtime rivals, UT in particular.

Loftin continued to emphasize that his school would proceed “methodically” now that SEC member school presidents opted to table the Aggies’ potential admission to their conference. Wanting to keep a balance between its two divisions, the SEC would likely add another school if it decides to admit Texas A&M—Florida State, Georgia Tech, and others have been mentioned as possible candidates. On a parallel track, Big 12 officials, still stinging from the departures of Colorado (to the Pacific-12 Conference) and Nebraska (to the Big Ten) have promised to aggressively pursue one to three new conference members if Texas A&M decides to go southeast.

Meanwhile, one of the most popular T-shirts currently on the Texas A&M campus, according to reports on ESPN.com and elsewhere, bears “the unofficial slogan of the Texas A&M fan base: ‘SECede.’ ” Starting in 2010, supportive A&M fans bought out the supply at Aggieland Outfitters, a popular apparel store near campus, and recently the store can’t keep the maroon and white shirts in stock. “We’re printing them as fast as we can,” a store employee told ESPN.com. “Basically we have people going to the printers nonstop to pick up shirts.”

Many sports watchers this week have used the Texas A&M story to point out a major omission in the basic structure of college football—while the NCAA has a president, as do the conferences, and the individual schools have presidents, athletic directors, and football coaches, college football itself lacks a commissioner, a Roger Goodell-type figure who can help guide the sport long-term. (We’ll bet good money that if such a position is created, its first occupant will wear a Texas-size 10-gallon hat.)

And recognizing that conference musical chairs are getting out of hand, college sports’ current chief steward, NCAA President Mark Emmert, reached out to a handful of top university officials on Monday, floating a meeting “to discuss a less cannibalistic and more collegial way to approach conference expansion,” according to the New York Times.

Meanwhile, a New Sun Belt Conference Star?

A ways north of all the hoopla surrounding the Longhorns’ TV deal and the Aggies’ possible secession, the University of North Texas and Austin-based networking firm Apogee Telecom just announced a 20-year, $20 million naming-rights sponsorship agreement for the Division I-FBS school’s glitzy new football stadium. The deal is the second-largest naming-rights agreement for any college football stadium to date, according to university officials.

This fall will be the inaugural season for UNT’s Mean Green at Apogee Stadium, the centerpiece of the recently developed Mean Green Village, which encompasses most of the academic, training, and competition facilities for UNT’s nearly 400 student-athletes. With a capacity of nearly 31,000, the $78 million stadium was built under the design and construction of companies HKS, headquartered in Dallas (also behind the renovation of Texas Christian University’s Amon G. Carter Stadium nearby), and Manhattan Construction. It features 21 luxury suites, 750 club seats, and a team apparel store.

UNT officials confirm that the naming-rights deal is a majority cash agreement, with some in-kind networking services provided that will help keep UNT students on the cutting edge of technology—and presumably, after they graduate, help them earn even more of that mean green.

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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