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Sunday
Sep032017

PGA Tour Makes The Right Call To Stick With The Current Network TV Deal Through 2021

We all want to see golf on television adapt to the times and improve. While Friday’s network opt-out deadline came and went as an opportunity for the PGA Tour to shake things up, they chose not to do so.

Very shrewd move, Commissioner Jay Monahan.

For fans, the only intrigue in a possible opt-out would have centered around Monahan’s desire to move the look and feel of golf into the future. But the cost of risking partnerships and jumping in with new partners was too great, with no clear sign of a positive outcome for such a move at a time ratings are down.

Besides, significant progress has come with various tracer technologies, HD, employing Trackman, super slow motion replays, Playing Through, live look-ins on breaking events and alternate viewing options like Amen Corner Live.

Despite the views of some at PGA Tour headquarters reportedly pushing for change, Monahan made the right call to put off any shake-up for a few years while the PGA Tour revamps its schedule. (Golf Channel’s current deal to televise also expires in 2021, with no opt-out). This also allows them to get a better sense of how the cable vs. streaming wars play out and strike a better deal going forward.

Consider just some of the reasons Monahan made the right call (The PGA Tour confirmed the contract is going forward and may be addressed at the Tour Championship):

—Schedule madness. The upcoming schedule revamp has way too many open-ended questions and uncertainties to have renegotiated deal terms or welcomed-in other networks. It’s going to be tricky enough to work out the changes with current network partners, sponsors and players, why add more headache?

—Our Future Is Not Quite Here Yet. Many believe streaming is the future and cord cutting will collapse the cable model, but has any major sports property said goodbye to guaranteed network or cable money to take their chances with disruptive mediums? Golf should be about the last sport to do so because…

—The Audience Is Not Ready. While many younger fans are prepared to watch golf via streaming, a majority of golf’s demographic still watches via cable. That demographic hurdle is not changing fast enough to justify taking a tour event away from a network and putting it on Amazon or YouTube or Twitter.  Unless the tour is in the business of setting precedent over making money for its players.

—Sponsors Are Not Ready. You might get a more engaged audience of 180,000 watching the final round of the Dell Technologies on Apple and Amazon TV’s. You might even get one that directly taps that sponsor’s audience, but nearly all tournaments would still rather take their chances reaching a larger number of eyeballs. The blue-chip brands the PGA Tour loves (and who like golf) want to see their logos on big screens in bars and golf courses. They still want to invest in something reaching more than a very targeted audience. The current deal accomplishes this for the people who fund the product.

—Opportunity To Change The Tone. I’ve heard no shortage of players and PGA Tour brass suggest angrily they could be doing way better. Now, this ignores that things are pretty incredible right now, and definitely ignores the post-Tiger ratings decline. But this attitude also mystifies countless network types and marketing world figures who cannot fathom how the PGA Tour believes they hold the stronger hand in the post-sports rights fee bubble. With a good deal for all sides in place through 2021, Monahan can use his personality to repair relationships and create a dialogue amongst his media partners that satisfies their needs and the desires of the Tour’s fanbase.

—Alignment Possibilities. There is a lingering bitterness over the sense that the PGA Tour left money on the table by locking into Golf Channel through 2021—a deal many saw as just as big of a risk for Golf Channel at the time. This rage clouds the thinking of many who disregard how simple it is for fans, bartenders and anyone with a cable package to find PGA Tour golf on a Thursday, Friday or weekend morning. But as the media world changes, not opting out allows the PGA Tour to gain a few more years of perspective and data. In two years they can better align possible weekday partners with weekend partners in a new deal or spend hundreds of millions starting their own channel. Or, pursue different terms with Golf Channel that can serve as an anger-management soother for Ponte Vedra’s disillusioned Vice Presidential core. Win-win!

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Reader Comments (8)

A good move, for all the reasons cited. Any exec at the PGA Tour that seriously pushed to opt out at this point in time should be immediately reassigned to the Web.com or the Sr. Tour before they can do any damage to the Tour itself.
09.3.2017 | Unregistered CommenterBrianS
https://twitter.com/GolfChannel/status/904463451992580096 LPGA has two years left; USGA chose Fox because of Golf Channel
09.3.2017 | Unregistered CommenterPG
I am shocked that Finchem's handpicked successor would go with the status quo...

No question a corporate man is going to not make waves. Eventually, the Tour will need to react to the sand moving underneath them, and it will be a shame if they wake up and realize they are Radio Shack or Sears. God help an organization trying to innovate filled with corporate stooges and bureaucrats.

But who loses? Monahan will have made 50-60 million scrunching his nose at powerpoints and rewriting vision statements long before the tour is hemorrhaging cash and sponsors. Sins of the father as they say. Ah, Corporate America...
09.3.2017 | Unregistered CommenterMJR
Sorry but the truth in all of this is that first of all Fox wasn't interested at all. The USGA contract is a bust and many feel that the partnership between the two is close to an end. Matter of fact I wouldn't be surprised that sometime after the Walker Cup is over we find out that a CBS will take over the contract as both the USGA and Fox move on. Remember this, 20 years ago Fox also was suppose to be the savior of NHL and that didn't work out. Chalk golf up as a big and costly failure for Fox.
So if Fox wasn't willing to get involved with the PGA Tour that also left Turner and even ESPN as possible suiters, but it's obvious that none of them were willing to bid or want anything to do with the PGA Tour.
So this is being reported as the PGA Tour being smart by leaving the statuesque, but in reality their is no way that the cable industry (which has Comcast, the owners of NBC and Golf Channel) would allow the PGA Tour to start up their own network. The cost is prohibitive and frankly nobody was out there to pay for it.

But the bottom line is this, both CBS and NBC are paying a good chunk of change for the tour in the next three years and in that time at best both are breaking even on this. It's obvious that they made it clear to the PGA Tour that if the Tour was to opt-out, that they would probably as soon walk away from the PGA Tour than pay any more money for the rest of the contract.

Look at it this way, just like Giancarlo Stanton having this 13-year, $325 million contract, if he continues to play lights out this year, in 2018, 2019 and 2020 he can opt-out with the thought that someone will give him more than the $218 million left. But if he doesn't play well and nobody is willing to give him more after 2020, of course Stanton will continue his contract and collect the remaining $218 million from Miami (or whoever buys out the contract from the Marlins).

So that is what happened to the PGA Tour, they could not find any other network or media company to pay them more than what they will get from NBC and CBS over the next three or four years so things will stay in place and the PGA Tour will try to find a way to make their product worth more money so that someone will pay a lot more after 2021.

So don't make it look like the PGA Tour is being kind to NBC and CBS, nobody is willing to pay more at the present time.
09.3.2017 | Unregistered CommenterGolfer
CBS and NBC are the only networks interested in non-major PGA Tour inventory, right? So the the only real alternative to the current status quo would be (as Jeff notes) to go digital and sign exclusivity deals with Twitter or Amazon or Facebook, etc. But in all honesty, I cannot foresee that becoming a possibility anytime soon. As long as ANY network is wiling to pay for the rights to non-major tournaments, that's a better option than to stream exclusively. Come 2021, the only REAL decision (in my opinion) will revolve around Golf Channel's package. Obviously CBS would love to get Thursday and Friday coverage on CBS Sports Network for the events that it airs. And although Comcast owns Golf Channel, I could foresee a scenario in which some executives would also love to get early round coverage of at least a few events on NBCSN (which doesn't have a lot of content during the summer when there is no NHL hockey).

To me, Monahan's move to preserve the status quo was a no-brainer at this point in time.
09.4.2017 | Unregistered CommenterCJV
Why would the Tour opt out of TV contracts! That would be crazy. They have no chance of coming close to going elsewhere to get the money locked in by these current TV contracts that were signed at the peak of golf's popularity!

Televised golf has peaked and is on the decline. The Tour should be worrying about where the money will come from when the current, high dollar, contracts expire.
09.4.2017 | Unregistered CommenterBud
Total no-brainer move. I spent the weekend with my 70-year-old dad and watched golf, and at one point he asked me how I watched golf now, knowing that I cut out DirecTV several months ago. I explained AppleTV, the PGA Tour app, NBCSports app, etc., and saw his eyes glaze over. His age group is still the Tour's top TV demographic; as long as they're around, the Tour is crazy to go all-in on new platforms.
09.5.2017 | Unregistered CommenterJohn
Pretty obvious the issue in the Tour not addressing this seriously at this time was the fact there is no opt-out in the GC contract. The value in doing their own channel or network is in having it ALL in one package and not being able to bring in the weekday and fall events into the deal right nowmake it a non starter.

On top of that throw in the schedule uncertainty and how the LPGA/PGAT "working together" dynamic fits it... and it's a hard deal to make right now.

IMO this is ripe for a GC-PGA Tour partnership, co-ownership or however they structure it. It's too much of a win-win for the Tour and Comcast not to happen. NBC has the all important network availability for most the regular schedule... GC can cover the rest. Plus the NBC sports channel portals gives additional potential relief valves when too many events stack up in the same weekend. (Web.com, Champions, Alternate events)

Besides...GC loses tons of value without the PGA Tour... and the infrastructure including the studios, personnel and the important channel allocations with the various carriers are already in place with the PGAT going with GC.
09.5.2017 | Unregistered CommenterRobopz

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