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Why Texas is doing the rest of the NCAA a favor with The Longhorn Network

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Several months ago, ESPN announced its intentions of airing high school football games on the Longhorn Network. Predictably, all hell broke loose. Texas A&M and Oklahoma were very vocal in their opposition to airing high school football on the Longhorn Network. They argued that airing high school games on a university affiliated network violated NCAA rules and gave Texas an unfair recruiting advantage. The NCAA agreed, and ESPN gave in (at least temporarily).

There has been all sorts of anger directed at the Longhorn Network. I am interested in a very narrow portion of this anger -- the anger which has come from other universities.  I think you can make a pretty good argument that in developing the Longhorn Network, The University of Texas doing the rest of the NCAA a favor.  Efforts to hinder the development of the network -- such as the efforts to prevent the airing of high school football, Texas A&M's decision to not allow the Longhorn Network to interview Mike Sherman, and Texas Tech's refusal to play football on the network -- seem pointless and counter to the long term interests of these other schools.  I will try to explain this after the jump.

The Longhorn Network is really a package of third tier football rights, the rights for a handful of basketball and baseball games, the rights to a number of other sports, and an opportunity to develop and produce UT-oriented content that was sold to ESPN.  Additionally, 24/7 programing is a nice commercial for the university, and great for the fans. But it has turned the administration, alumni, and fanbase of Texas A&M into complete and total anger-balls.  And it has upset a few other schools as well, to the point where they clearly don't want to play nice with the network.

The Longhorn Network is a new way for a university to produce a revenue stream, which may or may not pan out. Texas is conducting an important experiment for this revenue model. If it works out, it will be easy for other universities to copy and implement. If it doesn't, then everyone can learn from the mistakes of the Longhorn Network.  For the rest of the major athletic programs in the NCAA, the Longhorn Network is a risk-free experiment in raising additional revenue.  The major NCAA athletic programs should want the Longhorn Network to succeed, as it will show them a way to make more money.

I believe that NCAA athletic programs are heading towards a financial day of reckoning.  Only a really small fraction of NCAA athletic programs get by without being subsidized by their university.  State budgets are shot and university tuition is growing at unsustainable rates.  Something has to give.  Many athletic programs are going to need to get creative and bring in additional revenue at some point in the future.

The anger A&M et al. have displayed comes from the mindset where Texas is their competitor. Viewing university athletic departments as competing businesses is not the right model. The university athletic programs compete on the field, but on the revenue side they actually work cooperatively. Furthermore, Texas with the Longhorn Network is not taking away market share from other universities. In effect, the Longhorn Network is creating a totally new market for everyone. The anger is short sighted, because if the Longhorn Network works then many universities will want to adopt a similar approach.

With this as the backdrop, let's go back and revisit the issue about putting high school football on the Longhorn Network.  High school games make the single university network model stronger, making it more viable and profitable. Perhaps Texas gets an unfair recruiting advantage for a year or two. I don't necessarily grant this point -- I am actually pretty skeptical that Texas gains a specific recruiting advantage from the airing of high school football on the Longhorn Network -- although I freely accept that the Longhorn Network as a whole is a good recruiting tool for Texas. But any benefits would likely be temporary.  A couple of years down the road if the Longhorn Network was allowed to air high school games, everyone who starts their own network gets the benefit of having a more profitable model.  And more revenue means that there is a better chance that more NCAA programs will be viable.

Now, I don't want to suggest that Texas is being altruistic.  The University of Texas created the Longhorn Network for its own benefit.  Altruism isn't always required to make things better for everyone.