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All Longhorns, All the Time

January 20, 2011

The imagery couldn't have been more powerful. On a day that headlines around Texas trumpeted the significant budget cuts that lay ahead for the state's public colleges -- threatening the possible closure of some more-vulnerable institutions -- the state's highest-profile campus announced that it would leverage one of its strongest assets for more visibility and much-needed revenue.

Officials from the University of Texas at Austin and ESPN said jointly on Wednesday that they would create a 24-hour network to promote the institution's sports programs and -- while they're at it -- "a taste" of its academic and cultural offerings, too. The as-yet-unnamed network, into which ESPN will pour its programming expertise and its mighty marketing and distribution powers, will be worth about $250 million to the university over 20 years (or about $10 million to $12 million a year), which President William Powers Jr. said would be split equally between athletics and academic interests.

"The situation that higher education is in will require more private/public partnerships of this sort, from commercialization of intellectual property that's developed on campuses to private/public partnership in redesigning educational courses," Powers said during a webcasted news conference. "We will find it with other institutions of higher education and other members of our conference, that these kind of public/private enterprises, all across the campus, will be a model for what it will mean to restructure and reinvent public higher education."

The colleges and universities best positioned to reinvent themselves are those that have distinctive and successful (and marketable) programs -- and given the American population's interests, for better or worse, big-time sports programs are a lot more marketable than many other things that happen on a college campus. And few college athletics departments have the visibility and fan base (not to mention the wealth, with an annual budget of $137 million) of the Texas Longhorns, which those involved acknowledged made the UT agreement unusual, if not one of a kind.

"We would love to be able to duplicate it, but Texas is very unique," said Tom Stultz, senior vice president and managing director of IMG College, which has helped the university market its athletics rights since 1998 and will itself earn about $50 million over 20 years in the deal. "You have to have passion for the university and the right number of households in the state to make it work, and there will be a very limited number of opportunities to do this, if any. We will do this anywhere we can, but Texas is uniquely positioned."

Other universities (like Brigham Young University) and conferences (the Big Ten Conference) have established television networks to promote their sports offerings, and while the Big Ten Network, for one, has generated meaningful revenue for its member colleges, none of the existing arrangements brings as much attention and guaranteed money to a single institution as Texas' deal will.

Powers, the UT president, and ESPN's senior vice president for college sports programming, Burke Magnus, said that in addition to covering the games of all of the university's teams and digging into the university's archives, the network would do a "deep dive" into Texas high school sports and "get creative on original programming, too." (For a humorous look at what probably will not be covered, see this post from CNBC's Darren Rovell.)

Powers estimated that the network could air up to three hours a day of non-athletics content, including "musical performances, plays, and documentaries by faculty members and students," he told the Austin American-Statesman.

The arrangement will generate at least $10 million a year for the university, and Powers said that half that would go to "academic initiatives," beginning with the establishment of faculty chairs in physics and philosophy.

DeLoss Dodds, director of men's athletics at Texas, said it made him and his colleagues in athletics "feel like part of the family to be able to help out financially on the academic side," especially at a time of great financial strain.

Chris Plonsky, the women's athletics director, said that as university officials began exploring the possibility of creating a network three years ago, they were urged not to "settle for a regional sports network," but to go national. "Think about the power of your campus, the power of Austin as a vibrant community," she said. "It's an unbelievable gift to be able to give to this university, to tell our story, our collective, collaborative story, for a long time."

 

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