SBJ/April 7 - 13, 2008/This Weeks News

LPGA eyes new TV rights model

The LPGA is in the early stages of aggregating the rights to some of its 31 tournaments in hopes of landing a broadcast television deal starting in 2010, but network executives are skeptical that such a move will improve the tour’s chances of moving away from its current time-buy arrangements.

The LPGA and five of its tournaments buy time to air weekend portions of six events on network television. Early-round coverage and other weekend rounds are primarily covered under agreements with ESPN2 and Golf Channel that expire at the end of 2009. Four events are not scheduled to air this year.

Sources familiar with the LPGA’s plans said the tour is targeting eight to 12 of its higher-profile tournaments to be part of the package.

Not surprisingly, the LPGA’s wish list is said to include more consistent time windows and a revenue-sharing deal. The remaining tournaments would likely go to one or more cable partners.

Most network executives said the concept improves the property’s overall prospects for a better TV deal, but they do not envision anything beyond a time-buy arrangement.

The networks remain concerned about the lack of corporate support for the LPGA. “They don’t have the underwriting and sponsor support to justify getting away from the time-buy model,” said one network executive.

It’s a catch-22 for the LPGA, which is looking for more media inventory to attract prospective sponsors. The tour receives all of the commercial inventory for its ESPN2 events, some of which is passed on to tournament title sponsors. Golf Channel retains most of its inventory and provides a portion to the event title sponsor.

A source said the LPGA is considering selling an umbrella sponsorship for the package of eight to 12 tournaments, which would presumably include a media package to help support any potential network deal.

The LPGA’s drive for a broadcast TV
deal includes packaging high-profile
events, sources say.

First and foremost, the LPGA wants a television package that offers more consistent windows from week to week. Weekend broadcast windows are limited, but Rob Correa, senior vice president of programming at CBS Sports, said one potential is a time slot that ends before the start of PGA Tour coverage. CBS is airing weekend coverage of two LPGA events in either a 90-minute or two-hour slot before the network’s PGA Tour window starts at 3 p.m. ET.

“It’s all about scheduling,” Correa said.

Based partly on the NHL’s ratings numbers, LPGA Commissioner Carolyn Bivens believes the tour could garner a revenue-sharing agreement, which hockey has with NBC.

“If you take a look at our ratings and you compare them to the existing sports, we’re within a tenth of a percent, in some cases we’re even, with those who are getting rights fees or who have revenue-share deals,” she said.

The average LPGA rating for 2007 was just shy of the NHL (0.87 vs. 0.94).

The LPGA average rating fell in 2007 after increasing from a 0.97 in 2005 to a 1.13 in 2006, thanks in part to the rise and fall of Michelle Wie.

Also on the tour’s wish list are multiplatform capabilities and reducing production costs.

A tournament source said LPGA title sponsors pay about $200,000 to produce an event on Golf Channel, while ESPN2 is “higher, but in the same ballpark.” Time and production on a broadcast network can cost upward of $1.5 million per event.

Selling equity in the tour to a network, similar to the AFL’s arrangement with ESPN, is not under consideration, said Deputy Commissioner Libba Galloway.

The domestic struggle comes at a time when the LPGA is attracting rights fee increases in some Asian markets.

Agency marketers continue to tout the upside of the LPGA and its roster of stars such as Lorena Ochoa, Paula Creamer, Natalie Gulbis and Annika Sorenstam.

That sentiment was echoed by Correa.

“They have a lot of good stars and different players,” he said. “I think they have a good future.”

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