9-year pact with CBS, NBC/Golf Channel and ESPN+ will cost networks $700 million or more per year in media-rights fees, and guess who will pay for it all? That's right: You, the golf fan
Though the numbers on the PGA Tour’ s new nine-year agreement with CBS, NBC/Golf Channel and ESPN+ were not disclosed Monday, I feel comfortable in saying the number is between $700 million and $800 million annually.
Let that sink in for a minute. The number is enormous. However, considering that the NFL is looking at bumping its package with CBS from $2 billion to $3 billion a year, $700 million doesn’t seem so egregious.
CBS, which has been televising the PGA Tour since 1970, almost was left at the curb in the new deal, which starts in 2022.
A couple of years ago, amid speculation that the PGA Tour would opt out of its TV contract, Tour leaders in Ponte Vedra Beach, Fla., decided to see what kind of a TV deal they could get.
NBC/Golf Channel came to the table with a new partner, ESPN. Somehow, The Peacock thought it would make sense to bring the “Worldwide Leader in Sports” back to golf coverage.
CBS’ offer was deemed insufficient, so the Tour was left talking with NBC/Golf Channel and ESPN.
According to sources familiar with the deal who spoke on the condition of anonymity, the Tour wanted ABC coverage in the new deal, but the network, which is part of Walt Disney Co., would provide only all-sports channel ESPN.
Also, the money offered for the rights fee was not what the Tour was seeking, so the Tour decided to let its contract expire.
If you have listened to analysts Gary McCord and Peter Kostis since they were let go from CBS golf coverage, you know that CBS was told by the Tour that its coverage needed to get younger.
So, now CBS features a new crop of announcers that includes Davis Love III, a 21-time winner on the PGA Tour and a Tour favorite. But CBS still had to come up with the money. The network reportedly will give up its Southeastern Conference sports coverage after the deal expires in 2023, according to Sports Business Journal. Did the network decide to use the money saved from a future SEC package and apply it toward the PGA Tour contract?
Regarding NBC, the Tour specifically asked that certain individuals at NBC/Golf Channel not be involved in the face-to-face negotiations, sources said. It’s an unusual negotiating move, and for NBC to agree to it is even more extraordinary.
Mike McCarley, Golf Channel’s president, has been on the sidelines during the negotiations. That is no surprise, given that those same sources indicate that he is not going to be leading the network much longer. Molly Solomon, Golf Channel’s executive producer, has been moved to head NBC’s coverage of the Tokyo Olympics this summer. So, expect Golf Channel, whose name is likely to change to Golf in the near future, will have new management when the network moves its operations from Orlando, Fla., to NBC Sports’ home in Stamford, Conn., in the next 12 months or so.
The biggest part of the PGA Tour’s new deal could be the streaming component that was awarded to ESPN+.
One source said that this agreement will be the final TV deal that the PGA Tour will negotiate. That means the next agreement, which would start in 2031, will be all about streaming.
If you give ESPN a nine-year head start on live-streaming PGA Tour content and creating shows to support that programming, as the all-sports network has done with the NFL and NBA, what does that sound like? It sounds like the second coming of Golf Channel, which is exactly what ESPN will have created. The current Golf Channel will be left to compete with a bigger and more established entity.
Which network do you think will win that fight?
Two key parts of this new deal concern me:
The cost of future advertising will go up. Somebody will have to pay the new rights fees, and you can be certain that it won’t all be from the four TV partners. With the increased cost of advertising, golf’s equipment manufacturers, who are longtime sponsors of golf programming, will have to pass along some or all of the additional costs to the consumers of equipment and apparel.
The claim by the PGA Tour in its news release announcing the deal that “the Tour and NBC Sports will expand their collaborative content and programming relationship.” What that means is left to the imagination, but I’m willing to suggest it has some precarious consequences. More and more the lines are getting blurred between rights holders and the leagues. This is just another example of the line coming close to disappearing.
Ultimately, though, the PGA Tour should be applauded. This deal is a big victory.
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