Mark Cuban: LHN Huge Mistake

Keep in mind that every time something new comes out, Cuban says it will garner no interest or the concept is outdated. LHN might or might not work out, but its not because he has some great insight. If you just keep saying everything won't work, of course you will sound like a profit because most products don't work out.
 
Anything is possible. However, when we look back the NFL channel took sometime to gain traction as did the BTN. The Longhorn network hasn't been in existence long enough to say it was a mistake. The equity is the naming rights ($300 mil). If/when the LHN grows, UT stands to make a lot more than the 15 mil a year. UT will treat the LHN like novocain, give it a while, it works every time .
 
The Texas Revolution was slow getting off the ground but worked out pretty well.

Cuban is a mouth with an ego attached that has a lot of money. Who cares what he thinks about anything? Oh, yes, people in Dallas.
 
If he's referring to equity as in the ability to share in success, I thought $300 million was the minimum and that there was the potential to earn more. So then there is equity.

If he's referring to equity as in UT making an equity investment in this venture, then no, UT did not contribute equity to the project. But Cuban said that was a bad thing for Texas. Regardless of whether you share profits or not, getting a return of $300 million or more on a contribution of Zero is not a mistake. Ergo, Cuban is probably clueless.
 
1. Texas got paid. Even if 100% of the providers added LHN today, Texas isn't going to get any more $$$ under the current contract.
2. The NFL network is not available everywhere either. How long has it been in existence?
3. If UT fans don't raise hell with their providers and demand it, they won't have it.
 
What does he mean "Longhorns got no equity"? From what I understand the contract is quite a favorable one, with the possibility of Texas earning more if/when certain revenue milestones have been met.
 
Cuban is a great guy but he talks too much and it is well known that he isn't very bright. In fact, he is supports the premise that one can be a dumbass and still make a **** load of money. He is got some street smarts and common sense but his opinion on things even slightly outside of his bread'n'butter means ****.
 
He might be right but I wouldn't know it. I quit listening to anything Cuban said a long time ago.
 
Assume by "equity" he means ownership, i.e. the ability to sell the network (or shares of the network) as an asset. A $300 miliion payment over time is not equity -- its a revenue stream. Charley Sheen got a nice revenue stream from 2 1/2 men, but he didn't own the show (much less the network).

As to the merits of his point, I have no idea whether $300M in guarantedd payments over 20 years will be better than owning the network over the long run. If the LHn is worth $5B 10 years from now, Cuban will look pretty smart. Alternatively, if it never really gets off the ground, Espn has to shut it down and sue to get out of the deal, and UT ends up getting tens/hundreds of millions with nothing invested, then UT will have robbed Espn blind.

I don't know enough about the deal to know if Cuban is making a smart projection or talking out of his a$$. His success favors the former; his db-ery favors the latter.
 
It’s a risky venture, nothing else quite like it exists in college sports. UT probably could have negotiated an equity slice, but the annual guaranteed payments would likely have been lower. Not sure what value the equity would bring anyway, because I don’t see how UT would ever sell its equity, any more than it would sell off the football stadium.
 
Zona, reread your basic accounting textbook. Retained earnings (net profit) becomes equity on the balance sheet.

Cuban is bleeding money through HDNet and MavTV and assumes everyone loses money on their own tv network.
 
Texas has at least $300 million in equity.

Um, no they don't. Not unless ESPN paid out a lump sum that I didn't hear about.

Is it a huge mistake? How about is it just a mistake? Could be. Too early to tell. I hope it's not a mistake.
 
So what Cuban is saying is he believes the LHN is going to be a big success and UT should have negotiated a piece of the equity pie and made a huge mistake in not doing so.

That's a little different than what the headline implies.
 
But once ESPN makes back its initial investment (supposedly close to $300 mil), UT gets a 70 percent share of the profit. Who needs equity?

They'd probably have to offer the other 30 percent to a provider to oversee operation, anyway.
 
I wish they would offer academic classes via the LHN, for college credit of course. That would be pretty cool.
 
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