SBJ/January 17 - 23, 2005/SBJ In Depth

Focused on the fairways and the future

Several times in its 10-year history, The Golf Channel

A Golf Channel cameraman follows the action during last year’s LPGA Tournament of Champions in Alabama.
has polled golf fans and asked who their favorite golfer is. Tiger Woods never wins; the most frequent answer is “Me.”

This insight explains many of the golden programming moves the network has made in the last decade — and it explains why certain decisions Golf Channel executives made long ago seem even more sensible now than they did at the time.

But while the “Me” philosophy was key to The Golf Channel’s innovative first decade, it could be more traditional fare — a full-scale PGA Tour rights package — that highlights its second decade. The network, the tour and observers all think The Golf Channel is ready to play.

If the network signs a deal with the PGA Tour in negotiations next summer, it will have to give some credit to its innovative non-tournament programming of the last decade.

Golf is a game unlike any other: As long as you can swing the club, you can hope for a moment of personal glory akin to the pros — holing a 50-foot putt or sticking an approach shot to within two feet. Aware that golfers love to watch tournaments but downright crave information that will make them better golfers, The Golf Channel last year made Monday night “Your Game Night,” pulling together much of its programming on lessons, equipment, mental preparation and fitness.

“We got no push-back from viewers,” said David Manougian, The Golf Channel’s president, who was with the network at its launch as vice president of national advertising. “It was an immediate success.”

The philosophy applies also to the network’s current hot property, “The Big Break,” which combines the “I can do that” passion of all golfers with today’s reality-show craze in giving more-or-less regular golfers a chance at fame.

The show’s third season will feature women for the first time, and its fourth will pit a group of American hopefuls against a group from the British Isles — just in time to take advantage of the controversy created by Briton Paul Casey’s brusque comments about his American rivals. Last year, when referring to the competitive nature of the Ryder Cup, Casey said he “properly hates Americans.”

“The Big Break” got a fair amount of resistance when it was launched in 2003, from viewers who felt it was a little too edgy. “But it’s clear from their e-mails that they’re watching every episode, closely,” Manougian said.

Furthermore, the property has been “our most consistently highest-performing non-tournament television product, revenue- and ratings-wise, and in some instances it outperforms tournaments,” Manougian said. “If golf isn’t the ultimate reality game, I don’t know what is.”

Changing strategies

The Golf Channel now is a very different network than the one that launched exactly 10 years ago today. It was nearly $80 million into investment money then, and launched as a $6.95-a-month premium channel available in roughly 12 million homes. Management believed it would break even with 2 million subscribers by the end of its second year.

The Golf Channel’s foursome
Joseph Gibbs
Title: Co-founder and former CEO
Highlights: A year before the Jan. 17, 1995, launch of The Golf Channel, Gibbs’ venture had spent through its original investment and Gibbs’ dream was dimming. One year later, he’d raised another $60 million and was filling 24 hours of airtime a day with nothing but golf. He sold his shares to Comcast in 2001 and is no longer affiliated with the channel.
Arnold Palmer
Title: Co-founder
Highlights: He replied, “Whatever … sounds great” when Gibbs first presented the idea of The Golf Channel, and he continued to wonder if a network could survive on nothing but golf. But his influence helped win key investments, and he was the headliner on the network’s first show 10 years ago.
David Manougian
Title: President
Highlights: Likable and energetic, Manougian was vice president of national advertising when the network launched. He has since worked his way to the helm of the network. Manougian is The Golf Channel’s biggest advocate for its recent embrace of edgier programming.
Bob Greenway
Title: Senior vice president of production, programming and operations
Highlights: For 10 years, Greenway has been the conduit of programming ideas that come from throughout the channel’s staff.
But long before the two-year mark, the channel had repositioned itself largely as a basic-tier offering, paid for by cable operators, rather than by subscribers.

According to Bob Greenway, senior vice president of production, programming and operations, the original view of the network — held by co-founders Arnold Palmer and entrepreneur Joseph Gibbs — was that it would work as a niche offering for hard-core golfers with no objection to buying it for about $85 a year, roughly the cost of one round of golf.

Greenway intimates that some of the other early executives weren’t convinced of this model, and in the end they were right. The shift to basic-tier opened up the possibilities The Golf Channel now exploits: Many casual — not just hard-core — golfers visit the network every day.

In other words, The Golf Channel is a bit like ESPN, a “default” channel visited habitually at all hours by sworn fans who are just curious to see what’s being chipped or putted around. The network is now in almost 70 million homes.

“They have clearly accomplished more than anyone thought they would,” said Barry Frank, chairman of TWI, IMG’s television arm, which was a Golf Channel investor and a partner in planning and production early on. “They’ve gotten great distribution, they’ve exploited the interest in golf at the right demographic levels and they’ve managed to program the channel so interestingly that people will tune in to see what’s on as opposed to appointment viewing, which you used to have.”

Here, too, the network has put the viewer first.

So the most interesting story from The Golf Channel’s first 10 years is how it surprised even itself with strategic and programming changes and in the process provided a very different alternative to the way the big networks cover golf.

Gil Kerr, PGA Tour senior vice president of broadcasting, raves about the innovative things The Golf Channel has done with the Champions Tour and the Nationwide Tour from the production standpoint. The network has made Nationwide Tour telecasts quicker in pace and edgier in presentation, using such techniques as miking players during rounds and asking them off-the-cuff questions on the practice tee for humorous drop-ins.

Kerr said the channel is close to committing to a significant revamp of its nighttime replays of Champions Tour telecasts. They’ll be heavily re-edited, with player and commentator contributions to emphasize the game-improvement angle.

“The telecast will become a vehicle to talk about key shots, how they were played, what was the strategy,” Kerr said. “They’ve done some of this in replays of the majors in the past, but this is an ambitious idea and they understand the challenges.”

The idea grew out of the network’s “Playing Lessons From The Pros” shows, in which a pro plays nine holes with just a producer and a cameraman with a handheld camera. The pro talks about how he’s handling individual shots, individual holes and the course in general.

The unpredictable content, and the fact that viewers track a single player through an entire developing round, set the programming apart from tournament telecasts — and closely mirror the viewer’s own golf experience.

A play for TV rights

So if The Golf Channel’s first 10 years were highlighted by how it grew to represent the viewer in unexpected ways, the next 10 could be highlighted by a more traditional theme: event telecast rights. There’s a good chance The Golf Channel could be televising PGA Tour events in the new deal starting in 2007.

The channel has never made it a secret that it would like to join the three major networks and ESPN in securing rights to a chunk of PGA Tour events. It was in the bidding in 2001 for the four-year deals that began in 2003. And it has made tournament coverage its programming backbone from day one, launching with more than 60 events in its first year and now televising more than 100 — more than half of the golf on U.S. television today, thanks to deals with the Champions, Nationwide, European PGA and LPGA tours.

Now it’s in a much better position to walk away with a portion of the PGA Tour schedule. It will be at 70

Viewers tune in to learn tips, whether in the studio or on the links, for improving their play.
million viewers by 2007, the figure many consider necessary to swing any major-property sports deal. Manougian says the network has always had the cash to handle a deal — the tour’s current four-year deal cost four networks $850 million — and the network is profitable and in the habit of seeing double-digit increases in revenue and spending annually. And it has earned the PGA Tour’s respect.

Kerr said that Fox, Turner and The Golf Channel all inquired about rights last time around, but the incumbents “all wanted the same package and more,” so there was no room to try new partners. He expects the incumbents to want to return next time — despite industry buzz that ABC is not high on the prospect — but acknowledges, “This time will they all want more [than they have]? Not necessarily.”

This could be The Golf Channel’s opening. “Last time it wasn’t the amount of money [required], it was that we weren’t big enough to go in and get a significant amount of product from the tour,” Manougian said. The channel was at 38 million homes then. “Now we have the distribution, we have the money, and most important, the tour knows we know how to market and how to build a brand.”

Observers see additional reasons why The Golf

See also:

 

Turnkey Sports Poll

 

Key moments in the history of The Golf Channel

 

Other channels catering to specific events
Channel and parent Comcast, which owns essentially all of the network after a complex May 2001 transaction, would want a deal. They involve the distinct benefits a marquee rights deal would provide to a growing cable company.

“Comcast is clearly doing a terrific job with the channel, but you would have to think it has bigger aspirations in the programming world than four years ago, when they weren’t the behemoth they are now,” said Steve Greenberg, a founder of the Classic Sports Network and now chairman of CSTV: College Sports Television and managing director at investment firm Allen & Co. (He has also watched every episode of “The Big Break.”)

“I find it hard to believe [Comcast is] satisfied with channels that aren’t 100 percent distributed,” he said. “So does [a PGA Tour deal] become a catalyst to drive that final piece of the [carriage] puzzle?”

TWI’s Frank also noted that if the deal allowed The Golf Channel to swing an increase in carriage fees per month, the revenue increase could be large. “Say it’s currently 25 cents a home, just as an argument,” he said. “You get that up to 30 cents, times 60 or 70 million homes, times 12 [months], that’s $36 million to $40 million a year. For that you might consider overpaying for the Memphis Open. The over-the-air networks are on a strict ‘can I make money on the Memphis Open?’ strategy.”

There is no Memphis Open, but it’s an apt symbol, for The Golf Channel on its first time out might not get the marquee events — or a lot of events.

“There would have to be a building-block period,” said Larry Novenstern, senior vice president and director of national buying at the Deutsch agency, several of whose clients are Golf Channel advertisers. “They would have to show higher ratings first, that they can do Thursday and Friday coverage and shoulder programming around mid-to-high-level events like the [EDS] Byron Nelson [Championship] and the [Bank of America] Colonial, and build from there.”

PGA Tour rights would be a big step from the standpoint of prestige, but in a way it would be smaller than many steps the network has already taken. A year before the network launched, Gibbs had run through the original $6 million in financing, and he and Palmer had to decide whether to call it quits.

Six months later, they had raised $60 million more from six large cable companies, and the launch was a certainty. Now, another decade of viewer-first golf coverage is a certainty, as well.

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