By making this Dish Network agreement part of the overall ESPN family of networks, the Walt Disney Corporation has the ability to spread its revenue from Dish across its platforms in a manner they see fit.
As we all know, the sips LHN deal was thought to be lucrative on an annual basis at $300 Million over 20 years. But that is pre-realignment thinking. Tier 3 networks are proving to be very lucrative assets, when they can provide enough live programming to sell advertising. Now that we know this, the LHN is a severely undermarket deal, unless the sips can meet their cost sharing targets with Disney. Once Disney recoups its expenses in the form of profit, texas then gets to share in a manner above the $20 Million per year agreement. Meaning, if Disney spends $100 Million in fronting the network, they need to recoup their expenses, and make $100 Million in profit, and then, and only then, do the sips get their ridiculous 70% of revenue number.
This deal with Dish ensures this will never happen. Do you think the accountants and lawyers of Disney are going to allow the Disney financials to reflect that Dish is paying them one red cent for the LHN? Well, they may need to apply some revenue towards it, but it won't be reflective of a market rate. I would wager the LHN got picked up for around $0.05 per month, per subscriber, just to give it a figure. At that rate, the LHN will never generate the profit needed to trigger the revenue sharing agreement.
So the sips will be stuck in the $20 Million per year number for a while. Or is it $15 Million? Or is it $13 Million? Or is it less than $10 Million? I always forget the real number because they thought it was initially so big that they started giving it away. What idiots!
What a shame that the LHN couldn't be sold as a stand alone entity, and none of these accounting shenanigans could take place. What a shame that it took a game changer like the SEC Network to force a re-negotiation of the entire ESPN platform.
Sorry folks, your financial future was just etched in stone. You are effed through 2025 at the very least. At least 38 schools will make more media revenue than you starting in 2016 or 2017, and there will be nothing you can do about it for a decade. A freaking decade.
As we all know, the sips LHN deal was thought to be lucrative on an annual basis at $300 Million over 20 years. But that is pre-realignment thinking. Tier 3 networks are proving to be very lucrative assets, when they can provide enough live programming to sell advertising. Now that we know this, the LHN is a severely undermarket deal, unless the sips can meet their cost sharing targets with Disney. Once Disney recoups its expenses in the form of profit, texas then gets to share in a manner above the $20 Million per year agreement. Meaning, if Disney spends $100 Million in fronting the network, they need to recoup their expenses, and make $100 Million in profit, and then, and only then, do the sips get their ridiculous 70% of revenue number.
This deal with Dish ensures this will never happen. Do you think the accountants and lawyers of Disney are going to allow the Disney financials to reflect that Dish is paying them one red cent for the LHN? Well, they may need to apply some revenue towards it, but it won't be reflective of a market rate. I would wager the LHN got picked up for around $0.05 per month, per subscriber, just to give it a figure. At that rate, the LHN will never generate the profit needed to trigger the revenue sharing agreement.
So the sips will be stuck in the $20 Million per year number for a while. Or is it $15 Million? Or is it $13 Million? Or is it less than $10 Million? I always forget the real number because they thought it was initially so big that they started giving it away. What idiots!
What a shame that the LHN couldn't be sold as a stand alone entity, and none of these accounting shenanigans could take place. What a shame that it took a game changer like the SEC Network to force a re-negotiation of the entire ESPN platform.
Sorry folks, your financial future was just etched in stone. You are effed through 2025 at the very least. At least 38 schools will make more media revenue than you starting in 2016 or 2017, and there will be nothing you can do about it for a decade. A freaking decade.
