Here's a CNBC article from yesterday discussing the economics of LHN. My understanding is that BTN revenues were up over 20% again this year and that the network paid out $8.9 million per school. According to the CNBC report, LHN will pay UT approximately $11 million in the first year with a 3% escalator each year thereafter. That means BTN is on track to pass the LHN in revenues per school by 2013. It also has much broader distribution nationally. I found that interesting considering all the hype LHN has received.
Let's start with the Longhorn Network, which launches Friday, but has no carriers. Texas will receive $10.98 million a year and receive guaranteed three percent bumps through the life of the contract.
But Texas will only receive the truly big bucks — equal to 70 percent of the net revenue — after ESPN nets $295 million on the project. That might never happen. Carriers will surely come, but at what price will they accept a deal? And how many Longhorn fans will push their local carriers to get something done with one football game and eight men's basketball games? ESPN officials did not immediately respond to comment.
Then there's the issue with ticket prices. Texas is charging $70 for the Rice game, $75 for Kansas and Kansas State, $85 Oklahoma State & BYU and $95 for Texas Tech. Coming off a horrible 5-7 year, it appears like there's a glut in the marketplace for the non-marquee games and fans easily see that now that StubHub is the official secondary ticketing site of the Longhorns.