College football troll king Clay Travis isn't the first name that comes to mind when discussing programs outside the SEC in a fair, nuanced manner. But he might be onto something here.
Travis broke down the first four years of the Longhorn Network on his Outkick The Coverage site yesterday and OH GOD THE BLOOD:
How's the Longhorn Network doing?
The answer depends on who you ask.
According to SNL Kagan, the Longhorn Network now has 6.5 million in-state subscribers paying an average rate of .29 a month. Based on SNL's numbers, that means in 2015 the Longhorn Network will bring in $22.6 million in revenue from those 6.5 million subscribers in Texas. ESPN doesn't comment on particular revenue numbers for channels, but ESPN says the LHN actually has 20 million subscribers. That's a big difference in subscriber numbers, but when you parse the difference between those subscriber numbers, the revenue isn't much different. That's because, according to SNL Kagan, all of the national subscribers outside the state of Texas -- that's roughly 13.5 million subscribers -- are paying $0.02 a month, or $0.24 a year, for the Longhorn Network. Those 13.5 million subscribers would add just $3.2 million more a year in revenue, meaning after four years the Longhorn Network is still just doing $25.8 million a year in revenue. (Putting that number in a sports TV context, the Longhorn Network is on pace to do less revenue in 20 years than Mayweather-Pacquiao did in one night of pay-per-view boxing.)
Regardless of the author's supposed biases, two cents a month as a national subscriber rate is not good. The in-state rate for subscribers of 29 cents a month is paltry, too. Compare those numbers to the Big Ten, Pac-12, and SEC Networks:
|Network||In-Market Rate||Out-of-Market Rate|
|Big Ten Network||$1.00||$0.44|
On top of just the gulf in numbers alone, remember too that the Big Ten, SEC, and Pac-12 Networks all have multiple states and markets to charge the "in-market" rate. LHN has exactly one. For a comparison, think how much you watch, say, CBS Sports Network -- Viacom's oft-neglected 24 hours sports network. If subscriber rates are an accurate reflection of how often people are watching a network, CBS Sports Network (.25 cents/mo) is drawing nearly thirteen times the eyeballs nationally of Longhorn Network. That's ugly news for ESPN and Texas' athletic coffers.
Of course, this wouldn't be a Travis piece if it didn't end with a shot at Texas. But, he might be... right?
And here's the craziest fact of all: If the Longhorn Network hadn't existed, then the SEC Network wouldn't have existed either. Without Texas A&M leaving for the SEC, the SEC's own network wasn't lucrative enough to undertake. It was the eight million cable and satellite subscribers in Texas that made the SEC Network financially viable. Here's some simple math for you: Every major cable and satellite subscriber in Texas pays around $16.80 a year for the SEC Network. Every major cable and satellite subscriber in Texas -- except for those with Comcast, which doesn't carry it -- pays $3.48 for the Longhorn Network. So right now in Texas, the only state paying more than a quarter a year for the Longhorn Network, the SEC Network makes nearly five times as much every month. (Nationwide the SEC Network, on pace to do nearly $550 million in revenue this year, makes nearly 22 times as much money a month as the Longhorn Network.)
This means the Longhorn Network, launched to strengthen Texas' competitive stature for a generation to come, actually strengthened its rivals more than it did Texas. The launch of the Longhorn Network was such a disaster that ESPN used it as a road map for what not to do when they launched the SEC Network. The result? The SEC Network was the most successful channel launch in cable history; the Longhorn Network remains the least successful cable launch in ESPN history. (If you want to give ESPN credit for playing grandmaster-level chess, did the network encourage Texas to start the Longhorn Network knowing that it would lead to the SEC Network, which will make hundreds of millions for ESPN? If so, that would be true genius level.)
It might not so much be an indictment of Texas athletics, rather than the business model of the network itself -- it would've taken a special kind of effort and marketing plan to make single school-centric network succeed like Texas' administrators had once hoped. If Travis' financials are on the money, it'll be interesting to see what the future holds -- as it's clear ESPN is losing buckets of cash on the venture. What do you think? Did the launch of LHN do more to hurt Texas than help?