Thursday Morning Quarterbacking

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Thanks to reader John for Joe Flint's Wall Street Journal story on the new Tour TV deal.

The PGA Tour has an affluent audience, but in other ways limited leverage. Even though marquee-name Tiger Woods rebounded last year, ratings for the PGA Tour have diminished somewhat over the past few years. Moreover, once ESPN signed a rights deal for Nascar auto racing, its desire to keep the PGA Tour lessened, people close to the network said.

"They're going through a marketplace adjustment," sports-television consultant Neal Pilson said of the PGA Tour's new deal. "The fact that ABC and ESPN had withdrawn was a significant signal that it is a much more difficult marketplace today than it was five or 10 years ago," he added.

"Under the prior deal, you had several different major carriers offering packages that allowed sponsors to play the networks against each other," Mr. Pilson said.

But I thought this network streamlining was a good thing...

Thomas Bonk reports on the Hope moving to cable as part of a three event, Golf Channel-broadcast start to the season (described by one TGC reporter and Mark Rolfing last night as a "big bang" to start the season...uh, maybe for the The Golf Channel but not the Tour.).

Bonk says Milwaukee and Tucson are done as events, and that Chrysler is iffy for future Hope sponsorships.

If Tucson does become the WGC match play site, that means the three remaining WGC events will be anchored in the U.S.  So much for moving those around the world. So much for the WGC.

Scott Michaux's column wins for best lead of the day.

The PGA Tour has "streamlined" its television partners and tethered itself to cable, but the "continuity" of the commissioner's Masters envy remains intact.

He goes on to weigh the pluses and minuses and is spot on. Though I think he's a little hard on Kraig Kann, who has improved significantly and exudes enthusiasm without being overbearing.

Michaux remains skeptical that the notoriously frugal Golf Channel will upgrade its production values. He probably would not feel reassured if he read Richard Sandomir of the New York Times, who offered this from TGC's David Manougian:

"The reality series show that we understand the emotions connected to the game of golf and that there are lots of ways to portray golf entertainment," said David Manougian, the president of the Golf Channel. "We'll continue to push that throttle."

Steve Elling weighs in with the Orlando angle, which is significant. He also had this tidbit regarding the negotiations:

John Wildhack, senior vice president of programming and acquisitions at ESPN and ABC, said talks with the tour broke down in late December when it became apparent that Disney would continue to lose money under the new contract terms. All the networks claim they lost money on the current contract, which ends after the '06 season. Wildhack said golf's TV viewership has suffered significant "erosion'' in that time, a fact borne out by the ratings.

Huh, but the demographics are so...ah forget it. As for the Disney event in Orlando:

Disney World learned the parent company effectively was bailing from golf broadcasting Tuesday night, when tournament officials received a memo informing them the event no longer would be broadcast in-house on ABC or ESPN. Disney tournament officials are scheduled to meet with the tour Friday to learn where they fit on the schedule.

But if the parent company doesn't want to televise golf, why host an event where you have to spend a bunch of money updating the course every few years, all for something that will be on The Golf Channel and minus big name players?

A Major Award...

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...will go to the first writer who, in analyzing the PGA Tour's new TV deal, dares to question whether the "product" has been made less appealing for television by the shift to a power game, by slow play and by anti-birdie setups.

I know I'm asking a lot, but surely someone will go out on a limb and make such a suggestion. Yes, it requires a historical perspective along with thoughts about course setup, architecture and technology, but I just know someone will try. If nothing else, to be different.

(And to win this major award, the writer has to be American. The Scots, Brits and Aussies have already figured out what the Commissioner and his crew have yet to realize.)  

The All Spin Zone

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Commissioner, please, you have the floor.

In regard to the strategic partnership, we are excited about our relationship with Comcast and the resources Comcast has committed to put behind this partnership. We are delighted with this long-term relationship with the Golf Channel and the ability to bring the continuity to our early rounds, which we think helps our platform.

Platform is back and back big. All is right with the world. Savor it, only six more platforms to go...

Number one is that we have a streamlined set of relationships with NBC and CBS having all the weekends. It really relaxes and reinforces the continuity we can now provide to our fans.

Right, because having ABC and ESPN would have messed up that continuity for us fans and created a general state of unrelaxation.

On the cable side with our Thursday and Friday coverage every week of the year with the Golf Channel, it really changes the dynamic of being able to set up our weekend coverage with the combination of our cable coverage leading into our network coverage.

And that is different in what way?

In addition to those things, on the cable side, I think I should point out that the Champions Tour and Nationwide Tour programming have been extended coterminously to a 15-year arrangement with The Golf Channel, as well. So in a nutshell, that's our programming situation, and we are very excited about the way it came out.

Oh yes, it's a word! Coterminous is a variant of conterminous. Link it if you don't believe me (and I know you don't...Microsoft Word sure did not think it was a word).

On the financial side, I would say, first of all, preliminarily, we do not and have not in the past released specific rights fee information with respect to our television arrangements. It has been the case four years ago and eight years ago, and that's just the way we do it.

No, instead, we selectively leak a ballpark figure to writers and players.

However, there are four different ways that we think are important to look at how the overall financial structure of these arrangements will impact the Tour going forward. Four different metrics.

Metrics! Tim has been reading his Forbes.

One is more of a general metric, which is that we think the streamlined presence of our television in providing the continuity it does will benefit all constituents and will deliver more value to our sponsors. In delivering that value to our sponsors, it will have eventually an impact on the overall financial performance of the Tour, and importantly to our tournaments, and I'll come back to that in a minute.

Can't wait. Love the streamlined presence thing. On the CNN news crawl tonight they describe it as "relegated to The Golf Channel." That liberal bias again!

The second thing we looked at is how we can grow financial benefits to the players. We are now comfortable in projecting, because of these agreements and the rest of our businesses, that if we go out and look the next six years, 2007 to 2012, we can project approximately a $600 million increase over that period in player benefits, including prize money and retirement plan contributions. That would equate to a 35 percent increase over the current six years.

More pension funding to incentivize players to play more often. Because it's working so well now.

Thirdly, I think we can now say with reasonable certainty that we can reach the second billion dollar level in the eight-to nine-year period. It took us 67 years working with our tournaments to get to the first billion, which we passed in 2005, and with our financial future intact and the kind of sponsorship we're attracting, we are now comfortable in saying that in that 2013 period, we should be able to hit the second billion dollar level.

What happened to the fourth metric?  Maybe that's the individual tournaments absorbing the blow of going from 62% of the purse subsidized to 50%?

At this point Dick Ebersol chimed in and managed to return normalcy by speaking like a non-MBA'd type. Then Sean McManus spun the benifts of a two-network, Golf Channel thing and reiterated the whole streamlining the marketplace thing. Finally, David Manougian talked about The Golf Channel's glee and its (stunning) 15 year deal. 15 years! 

And then, the Ponte Vedra Over-40 softball league broke out. 

AT&T's operator butchered the name of just about every writer calling in, creating the only true entertainment in this event. Ah, the first question from Richard Sandomir of the New York Times was good.

Q. Tim, can you discuss a little bit of -- was there a bit of scrambling when ESPN pulled out, and how did that affect your negotiations with the Golf Channel?

COMMISSIONER TIM FINCHEM: Well, I don't think anybody pulled out of negotiations. We negotiated intensively with lots of different people. The complexion of negotiations at this level takes on different twists and turns, as has every one we've ever done. I wouldn't say there were any more or less twists and turns in this one than others.

Riiiiiiiiiiiiiiiiiiigggggggggggggggggggggghhhhhhhhhhhhhhhhhttttttttttttttttttttttttttt!

Where we came to the Golf Channel was that we had already determined going in that The Golf Channel was a candidate for some of our premier programming. I don't think we would have said that five years ago, given their distribution levels, but with the Champions Tour, Nationwide Tour and the commitment of Comcast, they've really built their distribution, and their distribution is headed north with or without our programming. But when we add the kinds of programming that we have in this relationship now with the best players in the world playing on a fairly consistent basis on The Golf Channel, it just creates a whole other dynamic in terms of the quality of their platform.

And the distribution levels of this strengthened platform will be conterminous for 15 years. 15 years!

When we started to focus on that possibility beyond just a portion of the programming to the notion that if we could create a continuity for our viewers, one of the problems we've had over the years is generating value for our sponsors on the early round side because it's been piecemeal, and at the same time providing continuity to our fans to be comfortable with where we are. Both of those things were solved by the combination of things that David and his people have brought to the table to provide very serious commitment to the programming side of our early rounds, and you add that to the four-round commitment that we've made and we see that platform being elevated to a point where it can generate very significant numbers.

If you have any idea what that all means, you are one bright person. Or you're David Manougian. 

Q. I have two questions: Are there not markets that the Golf Channel doesn't reach right now, one; and secondly, for a tournament like Sony or even Bob Hope, if you negotiate with the title sponsor out four years, do you now have to go back and renegotiate if they thought they were going to be on a network or ESPN and are now going to be on The Golf Channel?

COMMISSIONER TIM FINCHEM: The answer to the first question is there are pockets, and maybe David is better to follow up and give more detail. But The Golf Channel has pockets around the country with a distribution of approximately 70 million right now where they don't reach. We're well aware of that. We're partners with The Golf Channel on Champions Tour and Nationwide Tour programming. Those pockets are slowly but surely disappearing, and we are very comfortable with the projected growth pattern of distribution. And I would say this, the overlay throughout the country of reaching our fan base is very, very powerful. So we don't have any hesitation there.

Pockets. Love this TVspeak.

On the second question, I would say that we have, as I think you know, very strong sponsor structure today. We have been 100 percent sponsored throughout the last five years during a recession, during the post-9/11 environment, during a very difficult time in the television marketplace. We were 100 percent sponsored. We see no difficulty in maintaining sponsorships, and I think the continuity in our sponsorship base will continue.

Coming to a bookstore in 2007: The Non-Answer Answer, by Tim Finchem.

Q. Can you say what the increases are in terms of the actual rights fees?

COMMISSIONER TIM FINCHEM: No, I've already answered that question. We don't release detailed rights fee information. We've never done it before and we're not going to do it this year.

DICK EBERSOL: By my math right now, four different questions have tried to get you to tell them what the actual television rights fees are, and I just want to cheer you on, don't tell them.

Now guys, you were happy to tell us how much more the players will be making over the six years, why don't we get to know how much the Tour is skimming bringing in for charity? 

Q. I was just wondering, you mentioned the deal with The Golf Channel provides viewer continuity. But aside from that, is there any advantage for having such a long deal? And then secondly, does your deal also provide an opportunity for some events to migrate to the OLN later on?

COMMISSIONER TIM FINCHEM: Let's see, the first part of your question is there's a range of benefits in our new arrangement with David. There is very significant differentiation in the programming flexibility of The Golf Channel. To put the best programming, the programming that can generate the most interest effectively in front of the fan base at times when they can see it. The Golf Channel is a 24/7 service, it can show our stuff at night, it can show stuff in prime time, it can replay at night, it can do all those things. It can generate more value for our sponsors and more total viewership, which total viewership is a very important thing in our business, in our sport, much more I think than other sports. We look at how many viewers we reached total through the course of a tournament. That's what our sponsors look at. As a consequence we're less driven by average ratings in any particular day part. So those things, The Golf Channel brings a lot.

See, it's not about the ratings. Just ask Nascar. And this Sportscenter, ESPN stuff, they just don't have total viewership platforming capabilities like Golf Channel.

In terms of a long-term arrangement, it's a combination of looking at the current strength of the platform, the strength of the platform that we foresee in this partnership with our programming and their capabilities in the next three, four, five years, and then the reason for 15 years is that it sets the table for us to put our position in -- to protect our position in the long-term as the television marketplace continues to evolve. So for all those reasons, we thought long-term strategic partnership was very important, and there are elements on the partnership side that we're excited about in terms of our two companies working closely together, as we will on the network side with CBS and NBC. What was the second part of your question?

Oh don't worry about it. We just filled our platform quota here.     

First TV Deal Roundups

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Doug Ferguson provides an overview of the deal.

John Hawkins in this week's Golf World had the news on ESPN pulling out before today's announcement, and how the Tour admirably refused to budge on ESPN's desire for marquee tee times, which would have been a ridiculous situation.  Hawkins also weighs the move to The Golf Channel and whether it will be similar to the Champions Tour's move there.

Gene Yasuda calls the loss of ESPN a "significant and unexpected blow." 

I've started a thread on the TV deal playing off of Dan G.'s post from last week.  Curious what everyone thinks.

New TV Deal at 2 EST

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The Commissioner explains at 2 why they will be just fine without ABC and ESPN.

**Update: "We couldn't be more pleased with the outcome of these discussion." -Finchem

Parameters:

-6 year deal with networks, CBS increases to 19 events, NBC from 5 to 10

-Golf Channel handles all early round coverage and the Mercedes/Sony/Bob Hope kick off to the season. 

-TGC also handles all post-FedEx Cup events, and is signed for 15 years(!?) to "fully accomplish" the objectives of getting TGC on more than its curren 70 million homes

-15 year deal to continue Champions and Nationwide coverage on TGC 

-World Cup of Golf, R.I.P.

Chase For That Kind Of Money

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Larry Bohannan in the Desert Sun:

But as the current negotiations drag on, and as players such as ABC and USA walk away, the questions of how the tour is dealing with the networks and sponsors grow. The final six or so weeks of the 2007 season are being sacrificed to cable to avoid the NFL.

If the tour is negotiating to maintain current revenue levels, it's now clear that won't work. If in the chase for that kind of money the tour is alienating sponsors, television networks and even its individual tournaments, the tour might be doing a remarkable disservice to the fans and the game. 

38% of Almost A Billion...

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In the Golf World story on the new Tour TV deal, Stu Schneider writes:

The source said the tour would likely reduce its subsidy of purses from 62 percent to "somewhere in the 50s," putting pressure on tournament directors to get that revenue from other areas.

Now if 38% of the television money over the last four years stayed in Ponte Vedra, and it was valued at "almost" a billion dollars, would that mean the PGA Tour takes somewhere between $75-95 million a year for executive salaries, marketing and overhead? 


Sal, Others Weigh In

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Sal Johnson writes about the rumored TV deal, why it became a money loser for ABC, the loss of work for a lot of talented people and he wonders how the Tour will spin this.

Since NBC doubling its golf coverage would mean going from 5 to 10 events, Johnson seems to feel CBS will be doing a lot more golf and wonders how viewers will feel about that (especially since their telecasts seemed a bit tired when they did just 17 events last year).

Here's the AP story on the Golf World story with its own confirmation from another source, and here is Golfweek's rehashing of the Golf World story without attribution.   

Follow-Up On Reported Tour TV Deal

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Lots to cover, and I know you've planned your day around my thoughts on the matter, so here goes. First, in case you missed it, here's the link to Stu Schneider's GolfWorld.com exclusive, with reporting from Rosaforte, Sirak and Hawkins.

Golf World has learned the tour will be traveling with one fewer passenger, as ABC Sports, which broadcast its last Monday Night Football game a week ago, has opted for a similar decision for golf, leaving it to CBS, NBC and ABC's cable partner, ESPN.

Just when someone was getting the hang of making televised golf entertaining again, they yank the A-Team. Hopefully Faldo, Azinger (it doesn't sound like it), Tirico, Rankin, North, Baker-Finch and Alliss will appear on ESPN with Loomis in the truck to beef up their dreary telecasts. But don't bet on it.

It is hard to imagine losing the network that covered the second most tour events this year (16). And ESPN still isn't the same as one of the big three networks, especially with its current production values. (I know, I know...the ESPN brand, the impactful marketing reach, they're a lifestyle, yada, etc, yada, etc.)

The one bit of good news about ABC bowing out? Maybe Faldo-Azinger-Tirico will not give a hoot this year and really have fun by saying what is truly on their minds.

While the length and value of the new deal are still being negotiated, two sources familiar with the talks told Golf World that one proposal on the table called for a six-year contract, instead of the traditional four-year deal. "It is one way for [Commissioner] Tim [Finchem] to get the kind of numbers he wants to announce," said one source involved in tournament management.

Tim, are we ripping a page from David Stern's Putting-Vanity-Before-Common-Sense: The Modern Approach to a Commissionership?

The source said the tour would likely reduce its subsidy of purses from 62 percent to "somewhere in the 50s," putting pressure on tournament directors to get that revenue from other areas.

Or, they could just reduce the purses by 12% since the big names have made it clear this week that tournament timing, the venue and of course, family, are all more important than the purse. Psychotic.

Schneider also reports that USA Network is out on weekdays, while ESPN, The Golf Channel and someone willing to fall for the "but our demographics are great" argument will take over. 

The Players will be moving to May while Doral, according to Golf World, will become the WGC-American Express Championship (Ford bowing out!?). This leaves Harding Park one less opportunity and may mean the International did not get its wish to become a WGC event.

"I knew a week ago that ABC was out," Paul Azinger told Golf World. "I'm highly disappointed, for a lot of people. Not for me, because I have a golf career. I'm disappointed for all the people behind the scenes that you're never going to see or hear of. I feel bad for [ABC golf producer] Mark Loomis, too. He took a big chance with Faldo and me, and it worked. Unfortunately, the network was unwilling to write the check."
Beyond 2006, the status of its golf production team, including veteran analysts such as Peter Alliss and Judy Rankin, is unclear. Azinger said he planned to return to competitive golf and play a full schedule in 2007, using his career money list exemption.

Sigh. And it gets worse. Looks like we'll be getting more of Roger Maltbie than we can stomach imagine.

NBC...will double its commitment starting in 2007, by adding two West Coast tournaments (believed to be Phoenix and the WGC-Accenture Match Play), and three of the four FedEx Cup events (Boston, Chicago and the series-ending Tour Championship in Atlanta; the fourth FedEx Cup stop, in Westchester, N.Y., returns to longtime home CBS). NBC also will keep the Florida swing and the last event before the Masters, which may be Houston in the new schedule, taking over from the BellSouth Classic near Atlanta, which will move to a post-Masters slot.

And this, which probably has several tournament directors losing sleep, just wondering if their event has been given a virtual-death sentence better known as a post FedEx Cup date:

The negotiations were ongoing throughout the last part of December and surprisingly remained as secret as Tiger Woods' cell phone number -- most of the players, tournament directors and sponsors are still not aware of all the details. In fact, some aspects of the contracts -- such as which events will make up the post Tour Championship part of the schedule and which networks will broadcast them -- are ongoing. 

The players don't know. Eh, why should they? It's only their tour. The commissioner works for them. Right?

What Will Phil Say Next?

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phil pga.jpgShocking as it may seem, I don't TiVo Golf Hawaii hosted by Mark Rolfing. But at JWH's suggestion I recorded the current edition. And boy was it grand.

Attention golf writers who use this free-of-charge transcription work: I will cite your stories when the IRS questions my TiVo write-off.

Okay here's the deal. Mark Rolfing, interviewing Phil in Hawaii during November's Grand Slam of Golf, starts by saying how the 2007 television contract is the talk of the Tour. Then...

MARK ROLFING: Have you been part of the planning process?

PHIL MICKELSON: No, I haven’t. I was asked maybe a year and a half ago what I thought about certain ideas and I don’t necessarily support what’s going on, but what I feel needs to happen is we need to have the top guys playing against each other more often. And we’ll do that 2 or 3 more times. So that is a good thing. But in my opinion it’s really a half-hearted attempt at what we need to do which is force the top players to play against each other on specific tournaments 12 times a year in addition to the four majors, the Players Championship, and the three World Golf Championships. And that would give us 20 events where the top players play against each other.
But Mark, what happens is the sponsors love it because they know what they are buying. They are paying more money but are guaranteed that the top 100 guys are going to play against each other. The fans love it because that’s what they want to see. And television loves it because that’s what they want to buy. But the reason it doesn’t happen is because the 150 guys on Tour who are fighting to keep their card have such a strong voice that it stops anything like that going through. So 150 guys control and can stop what would ultimately be good for the Tour in my opinion, and that’s to stand up to the top players and force them to play these specific events, but reward them by having a larger purse because you can sell it to sponsors, television and the fans a lot easier.

MARK ROLFING: How would you force top players to play in these 12 tournaments, let’s say?
PHIL MICKELSON: Well the Tour needs to be run independent of the players. And run as an entity just like Nascar does with their drivers. They force them to play certain events and you stand up and say, “look, if you don’t play these 12 events, and you don’t play the four majors and you don’t play the Players Championship and the World Golf Championship’s, you don’t have a card next year. You can’t play any of them.” Of course we’re going to play.

MARK ROLFING: Phil, if you were talking to the player on the PGA Tour that’s 100th on the money list instead of me today, how would you convince them that it might be the best thing for them, what you are talking about.

PHIL MICKELSON: Well I shouldn’t have to Mark. The commissioner needs to step up and make the statement that this is in the best interest of the Tour to have the top guys play against each other more often and it shouldn’t be his concern to try to justify it to everybody. He needs to stand up and run the Tour like a business, in the best interest of the Tour, in the best interest of the sponsors, television and the fans. And not have to justify it to other players or even the top players. He should stand up….and when it’s run like a business, we all need to buy into it and go with it. That includes for me being told what tournaments I have to play in. I’m fine with that because it’s in the best interests of the Tour, and I’m rewarded by it because we’re able to sell those tournaments for more money and ultimately play for a larger purse.

If you want to see this for yourself, the program airs a couple more times (listed here) between now and Christmas day.

And I've started a thread under Discuss Tournaments to chat about Phil's comments.

Hold The Commissioner's Calls Today

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Nascar's new TV deal: $4.5 billion for 8 years.

"The bottom line is, Nascar is a national sport with very large ratings," George Bodenheimer, ESPN and ABC Sports president, said yesterday in a conference call with reporters. "Secondly, obviously the sport is extremely fan-friendly and sponsor-friendly. We're very bullish on the sales prospects of this property."

And...

"We at Fox believed in it, the folks at Nascar preached it and it was just a matter of Madison Avenue catching up, and it was really in black and white," said Ed Goren, the president of Fox Sports. "All they had to do was see the ratings that Nascar was generating on Fox."

No mention of demographics. Just ratings.