AUSTIN — At the Longhorn Network’s sleek set outside Royal Memorial Stadium, production assistants in burnt orange ski caps hustled about, Texas Heisman Trophy winner-turned-commentator Ricky Williams prepped for his on-air segment, and six blocks away technicians in a $13 million studio prepared to transmit the Kansas-UT football game to regional viewers.

Five years ago, ESPN signed a 20-year, $295 million contract with the University of Texas, broke ground on the swanky studio, and agreed to absorb LHN production costs pegged at an estimated $26 million a year, the contract details state.

At the time the deal was signed, Texas — the national champion in 2005 — was a year removed from an unbeaten, 13-0 regular season and a title game loss to Alabama. But its 5-7 record in 2010 was a harbinger of things to come. Since then, the Horns have not acted the part of a marquee program, going just 36-28, dipping once again to 5-7 in 2015 and missing a bowl game.

On this blustery November day, the Longhorns were matched up in a meaningless game against winless Kansas while bitter Big 12 foe Oklahoma and in-state rivals TCU and Baylor were jousting for inclusion in football’s final four playoffs.

Another old adversary, Texas A&M, angered by the Longhorns favored treatment by ESPN, had bolted the Big 12 several seasons earlier and joined the Southeastern Conference.

Asked about the Longhorns’ sudden decline, ESPN executive vice president Burke Magnus replied, “Nothing suggested that could happen.”

But it has, bringing into question the wisdom of ESPN’s sizable investment in the only single-school, around-the-clock sports network in the country, which thus far has lost $48 million, according to SNL Kagan, a media research firm.

The football team’s mediocre performance, matched by the men’s basketball team, has cost head coaches of both programs their jobs. Just a few months ago, the school bounced its athletic director, Steve Patterson, who was supposed to turn things around.

“Did we think about that?” Magnus asked recently, referring to UT’s struggling programs. “Certainly not. But the nature of our business is constantly cyclical. In the NBA, the Lakers, Knicks and Celtics are all down and we’re having to build stories out of small-market teams like the Golden State Warriors. When all is said and done, we will be very happy with the deal we did.”

The Longhorn Network has been controversial since well before it launched, on Aug. 26, 2011, when Burnt Orange alum and sideline dreamboat Matthew McConaughey cooed grandiloquently: “Ours is the color of the sunset and leather. The shade of pride and heat. It’s the salute of a citizenry and sign of a nation. … For one school. One star. One state. Welcome to the Longhorn Network.”

Sports business sages and envious athletic directors variously said that ESPN, the Bristol, Connecticut, juggernaut valued at $51 billion in 2013, had dramatically overpaid Texas, that the fledgling network would disrupt the Big 12 conference’s ability to secure a sweet network TV deal, and that the whole affair smacked of Longhorn hubris.

“Those were bigger numbers than even Notre Dame was getting from NBC,” said former Texas A&M athletic director Bill Byrne. “I was stunned. What Texas did was extraordinary, and I suspect I was a little jealous.”

But from the beginning, LHN had problems: Not enough cable providers signed up in the first three years. LHN did not offer any major football games — only the lowest “third-tier” matchups such as Kansas or Rice. And a steady diet of what is left — volleyball, soccer, softball, swimming, golf and campus academic events — never was enough to excite even the most loyal Longhorn.

Rival coaches said LHN would give the Longhorns a big advantage in recruiting high school athletes. (Texas once planned on televising Texas high school football games, but the NCAA rejected the idea.) Journalists warned that LHN would become a public relations arm for the most lucrative college athletic department in the nation and that ESPN’s solid journalism reputation — honed on tough stories such as steroids in baseball and NFL head trauma — would be damaged by LHN’s conflict of interest.

“People were ready to be judge, jury and executioner when we were just six to 12 months into the deal,” Magnus said. “I thought that was unfair.”

For many, the Longhorn Network, while risky and audacious, seemed logical in the big scheme of extravagant college athletic deals. What other university could even contemplate such a single-college sports network?

Not Notre Dame, which is locked into a 10-year, $15 million-per-year, NBC contract to televise home football games. Not Alabama, Florida, UCLA, Ohio State or Michigan, TV industry analysts said.

“Texas was unique in their ability to do it,” Magnus said. “The size of the school, the teams they play, the market of Texas (with its 26 million residents), the size of the (network’s) footprint. …”

But five years into the deal the Longhorn Network is under as much scrutiny as ever.

Though LHN was a financial windfall for the university, the network has lost money for five consecutive years, according to a financial study this year by SNL Kagan. (ESPN is owned jointly by the Walt Disney Co., a public company that has an 80 percent stake, and privately owned Hearst, the owner of the San Antonio Express-News.)

The Kagan study says LHN was “on the verge of being a bust” because of its early lack of full distribution by cable and satellite providers but was rescued when DIRECTV signed on last year, bringing in an estimated 1.8 million new subscribers within the LHN footprint of Texas, Louisiana, Oklahoma and New Mexico. That grew LHN’s reach to some 7.5 million subscribers, according to Kagan. So, despite a losing football team, Kagan projects the network will achieve its first profit in 2016, at roughly $2 million on net revenue of $32 million.

ESPN disagrees with Kagan’s LHN subscriber numbers, but declines to say why, countering that LHN has 20 million subscribers. Most of those customers subscribe to a tier of programs that includes LHN. That doesn’t indicate if they’re watching LHN or not.

Nielsen, the standard for rating TV viewers, doesn’t track LHN. Instead, the UT channel is rated by Rentrak, which reports that LHN’s most-watched programs for 2015 were the only two Longhorns football games it televised. For UT vs. Rice, Rentrak says LHN was seen nationally in 423,000 homes; against Kansas, about 334,000.

ESPN’s Magnus said those numbers are comparable to what they get for football games on the ESPNU or ESPN2 channels.

The Longhorn Network makes most of its money through subscriber fees and advertising. Those subscriber fees, reported to be 29 cents per customer per month, plus advertising, have apparently been unable to offset some considerable costs on ESPN’s side.

According to its contract with the university, ESPN’s payments to Texas started at $10,980,000 per year, increasing by 3 percent annually until 2031, or an average of just under $15 million each year.

ESPN further projected its production and overhead costs to run $26 million annually, increasing 3 percent to 4 percent per year, plus ESPN was to build the LHN studios in Austin, located on the former downtown site of Concordia University, off Interstate 35.

The accumulated loss so far “is a rounding error for a company the size of ESPN,” said Tom Stultz, a former executive with the global sports marketing firm, IMG, whose subsidiary, IMG College, is a partner in the Longhorn Network and does all of its ad sales.

“ESPN is in this for the long haul,” said Stultz, now president of JMI Sports, “and they derive other benefits from the network other than just financial rewards. They develop new talent. They produce valuable content for the middle of the country and one huge state, and with conference realignment always in play, they are joined at the hip for 20 years with Texas.”

Kevin Weiberg, a former Big 12 commissioner and now a consultant on college sports media deals said he doubts “ESPN has any long-term regret about the Longhorn Network. I think it’s uncertain if this (LHN) model will work … and drive an audience over a long period of time, but in a changing media landscape, I think it’s always better to be distributing your own content than not.”

Complicating things internally at ESPN, is the firing this year of some 300 senior editors, producers and writers, a move widely thought to be caused by ESPN’s spending on long-term league contracts involving, among others, the NBA (9 years at $24 billion, with TNT), NFL Monday Night Football (8 years at roughly $15 billion) and the European Football Championship in 2020 (estimated at $110 million).

Supporting the home team

On page 43 of the UT Athletic Department’s 2015 annual report, an innocuous publicity photo shows three men on the studio set of the Longhorn Network, each proudly flashing the most recognized team-affiliated hand sign in American sports — the Hook ’Em Horns salute.

One of the men is Texas head football coach, Charlie Strong.

Another is now-former Texas athletic director, Steve Patterson.

The third Longhorn booster with his “horns up” is the most prominent anchor at the network, San Antonio native Lowell Galindo.

Galindo, age 35, named one of his children after former Longhorns football coach Mack Brown before he joined LHN. He since has interviewed Brown dozens of times on the air since 2011.

His Twitter feed often is full of superlatives and atta-boys for Longhorn coaches and players.

After an impressive win by women’s basketball coach Karen Aston last season, Galindo tweeted: “This is what happens when you push a group to the limit with positivity. Congrats @CoachKarenA!!!!!”

Galindo’s boosterism may seem tame in a broadcasting world where virtually all local team announcers are paid by the teams they cover and conference networks are assumed to be compliant partners with their colleges.

The Big Ten Network, for example, failed for three days to properly cover perhaps the biggest story in conference history — the 2011 child sex abuse scandal involving former Penn State assistant coach Jerry Sandusky.

That year, crisis public relations expert Mike Paul told USA Today: “BTN’s coverage raises the question of whether conference or school-owned channels such as BTN, or the new Longhorn Network … have either the resources, or inclination, to objectively report bad news about themselves … or whether they're basically extended infomercials.”

The lines between objective journalism and public relations unquestionably haveblurred of late, and especially at ESPN, where billions of dollars are paid to the NFL, NBA, NCAA and Major League Baseball for broadcast rights.

In 2013, ESPN was rocked with condemnation when, according to the New York Times, it abandoned a 15-month joint investigation with PBS Frontline of head trauma cases in the NFL after NFL Commissioner Roger Goodell expressed his dismay to ESPN execs, including president John Skipper.

ESPN publicists later said the decision was due to the sports network believing it had lost editorial control over the project.

Former Washington Post Sports Editor George Solomon, who once served as an ESPN ombudsman, lamented that “homers” have become the staple of many sports broadcasts where the media rights owners value profits over journalism.

“The business has changed — sadly, for most of us,” Solomon said. “But the Longhorn Network is still under the umbrella of ESPN and it’s important they assign their people to do solid investigative journalism. I would hope they would be objective.”

Stephanie Druley, a senior vice president in charge of production at both LHN and ESPN’s SEC Network, noted the ESPN and UT arrangement is a partnership.

“We’re a hybrid. We’re in the middle. I’ve said since we launched, we’re not going to be “Outside the Lines” — ESPN’s much-awarded long-form journalism program — but we will do negative stories,” she said.

The LHN studios, six blocks from Royal Memorial Stadium, are a study in burnt orange furnishings, memorabilia, mottoes and photos. Among a staff of about 65, many are UT alums.

The network occasionally will report disciplinary action taken against a Longhorn athlete, but viewers haven’t seen in-depth stories on topics such as gender and racial equality on campus, domestic abuse involving athletes or academic fraud.

As stated in the ESPN contract with UT, in “the event that UT reasonably determines that any on-air talent does not reflect the quality and reputation desired by UT for the Network based upon inappropriate statements made or actions taken by such talent … ESPN will cause such talent to be promptly replaced.”

The normal weekly fare at LHN during football season includes such things as a game-preview show on Thursday, pregame and post-game shows Saturday, game analysis with Charlie Strong on Monday, replays of recent and “classic” UT games, coverage of Olympic and women’s sports — LHN covers about 200 events per year — a news program covering all 20 varsity sports, and by contract, at least 10 percent of the shows must concern campus academics and cultural life.

When LHN isn’t showing games, you might encounter a live show from the Cactus Café, an on-campus music venue, or speeches by guest speakers like Mikhail Gorbachev or Eva Longoria.

Funny and poignant features about a volleyball player or obscure coach sometimes air. And if you’re looking for the next stars on ESPN’s national broadcasts, watch the farm club in Austin. The hard-working and unflappable Jane Slater may be the next LHN sideline reporter to go big-time, while football analysts Ahmad Brooks and Ricky Williams, and basketball color man Lance Blanks — all former UT stars — are incisive analysts.

But of all the successes brought by the Longhorn Network, it’s not the financial payoff, on-air talent or strategic media savvy that has most UT coaches talking. It is LHN’s focus on Olympic and women’s sports.

“To have every home game on live has been an amazing recruiting tool for us,” associate head volleyball coach Tonya Johnson said. “We’re basically available in every TV market. They’ve been absolutely great for women’s athletics.”

Track and field coach Mario Sategna said that when a potential recruit’s family in Oregon, for example, can watch 20 hours of the annual Texas Relays on LHN, that might be the deciding factor in signing a high school athlete.

“The network uses very knowledgeable commentators who may have covered the world trials or Olympics,” Sategna said. “The quality of production is every bit as good as any national network event.

“But I keep coming back to what this exposure has done for women athletes — the swimmers, the volleyball players, our kids,” he said. “By seeing these great, often overlooked, women athletes, you get a whole different perspective on big time college athletics.”

Pennies per subscriber

At 78, DeLoss Dodds is enjoying retirement.

The former UT athletic director who guided the Longhorn Network into existence lives with his wife, Mary Ann, high atop the sheer limestone banks of Austin’s Barton Creek. Between rounds of low-80s golf with some of his three children and seven grandchildren, he proudly watches another of his offspring.

“I watch the Longhorn Network before and after every football game,” he said. “I love to watch volleyball, baseball and I’d be embarrassed to tell you how many times I’ve watched the USC game,” when Texas won the 2005 national championship.

But Dodds hasn’t a clue about what LHN might look like in five years, much less in 2031, when the contract with ESPN expires.

“My only guess is that it would not look the way it does now,” he said. “I think we’ll still sit on couches and watch a TV. Some of us will. But young people may want everything online, on tablets, on their phones. I would think 15 years from now, our world today will look archaic.”

Dodds also believes that LHN might be a one-off, a bold idea that perhaps only Texas could pull off at the time, but which may never be repeated. Ironically, when LHN was born, its detractors often said it would have so many imitators that it would disrupt the whole sports media landscape.

While virtually any college president or athletic director would like the Longhorns’ $15 million a year from ESPN, plus its $25.6 million annual distribution from the Big 12 for its Fox/ESPN rights, the Pac 12, Big Ten and SEC conferences are hardly complaining.

Here are reported estimates of their deals:

Pac 12: $250 million annually, 12 schools, ESPN/Fox.

Big Ten: $248 million annually, 12 schools, BTN, ESPN, CBS, Fox.

SEC: $205 million, 14 schools, CBS/ESPN

Compared with the 29 cents a month the LHN reportedly receives from 7.5 million subscribers, the BTN Network is reportedly receiving more than $1 per home state subscriber, while the SEC is at $1.30 or more. And the SEC Network is available to 69 million subscriber homes; the Big Ten, 62 million.

The Pac-12 Network will show 850 events this year. “And 600 of them had never been televised before,” conference spokesman Erik Hardenbergh said. “That’s an unbelievable amount of exposure that changes our whole dynamic. Plus we have 35 tier one football games and about 154 live men’s basketball games, 100 women’s games. Our schools love the regional concept. I can’t imagine anyone wanting to go to a single-college channel format.”

Parse all the numbers, according to media analyst SNL Kagan, and after five years LHN will make a projected $32 million in net revenue, with $30 million in expenses. That profit is just barely more than the $1.5 million the Spurs’ backup forward Matt Bonner will make this year.

An influential UT observer, blogger Clay Travis, crunched some more numbers.

“Every major cable and satellite subscriber in Texas pays around $16.80 a year for the SEC Network,” Travis wrote in May 2015. The same subscribers pay $3.48 for the Longhorn Network, netting the SEC Network nearly five times as much every month. “Nationwide,” Travis reported, “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.”

Consequently, the SEC Network became the most successful channel launch in the history of cable, while LHN became ESPN’s weakest.

ESPN’s Burke Magnus said the network has no intention of buying itself out of the 20-year contract with Texas, selling it to a private equity firm or competitor (Texas would supposedly veto this).

“In whatever uncertainty that lies ahead in our business,” Magnus intoned, “I don’t think the University of Texas will be disadvantaged by being with us.”

bselcraig@express-news.net