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SBJ/20080623/This Week's News
LPGA TV revenue gets global boost
Published June 23, 2008
The growth of the LPGA as an international sports property and a new agreement with its tournament association led to a record distribution of television revenue for the 2007 season.
Neither LPGA nor LPGA Tournament Owners Association executives would disclose the total disbursement, but three tournament sources said their take was about $50,000 each, roughly double the year before.
The TOA doles out equal payments to its member tournaments and keeps a portion to help fund operations, according to its tax documents. The association represents the interests of nearly all of the 33 official money events on the LPGA schedule.
The LPGA typically completes its payment to the TOA during the first half of the following year, which is why 2007 data is available now.
The payment comes from rights fees generated by international and domestic television deals, but LPGA Deputy Commissioner Libba Galloway said much of the 2007 bump was tied to increases in international rights.
“It speaks volumes for the appeal of the LPGA, primarily internationally, which is where we get most of our rights fees from,” Galloway said. “A very small portion of the increase came from the United States.”
More than half of the international money annually comes from Asia. A large portion of the 2007 increase was due to a new agreement in Japan that runs through 2009.
One smaller contributing factor was a new five-year revenue-sharing agreement between the TOA and the LPGA that started in 2007. Under the previous deal, the LPGA kept all revenue up to a certain threshold before a payment was made to the TOA. The new deal eliminates that threshold, resulting in an incremental increase for the TOA and its tournaments.
The LPGA has averaged about 10 percent year-over-year growth in international television revenue since it started selling the rights in 1996. IMG markets the rights internationally.
The tour projected that this year’s TV disbursement will be about the same as 2007, one tournament director said. The LPGA said it expects any growth to come primarily from European and Latin American markets.
The total disbursement has grown substantially from a few thousand dollars a decade ago but still doesn’t cover television costs. Most tournaments pay about $250,000 to appear on Golf Channel or ESPN, while some pay upward of $1.5 million for time and production on network TV.
The LPGA is trying to negotiate a new series of network and cable deals beginning in 2010 that will create a more consistent schedule and reduce costs to tournaments.