A Silver anniversary ATP events retain Kessler Jones maintains support of Kroenke MLB setting goal of $15B in revenue Bud Selig: Outtakes from our reporting Behrens’ rise, NBA’s social commitment Chargers exec: Rams don’t deserve L.A. NBA expands Christmas games ads Supercross revs up after big gains NFL toughens up on fan ejections
Upcoming Conferences and Events
SBJ/January 7-13, 2013/Leagues and Governing Bodies
Title sponsors in hand, PGA Tour eyes digital, international growth
Published January 7, 2013, Page 1
WANT MORE GREAT STORIES LIKE THIS?
CLICK ON ONE OF THESE BUTTONS
Nearly sold out of its title sponsorships, the PGA Tour is placing big bets in 2013 on new inventory that will come from bringing its digital operations in-house and expanding into territories outside the U.S.
The tournament in Tampa is the only PGA Tour event without a title sponsor in 2013, and the rest of the 45 events are sponsored through at least 2014, giving the tour’s sales staff a unique window this year to develop its new properties in Latin America and Canada.
It also comes at a time when the tour is building out its own digital division, which was previously managed by Turner Sports until Dec. 31.
|Tour sponsor FedEx extended its deal in 2012. The brand also sponsors the tour’s stop in Memphis, a deal that will come up in 2014.
“Now we’re going to have a unified app for all of our tournaments,” said Jay Monahan, the PGA Tour’s senior vice president for business development. “The user experience will be significantly improved, there will be better mapping technology and it will do more for live data and scoring. I can’t say too much about it yet, but that will be coming in 2013.”
Part of the tour’s new digital inventory will come from the simulcast of each tournament, which was part of the tour’s most recent media rights agreements. Essentially, the CBS, NBC or Golf Channel broadcast will simulcast on PGATour.com and other digital outlets for the first time. With that will come additional exposure for title sponsors and new inventory for the tour to sell.
PGA Tour telecasts on NBC and Golf Channel will be simulcast on a co-branded video player that users can access via PGATour.com, GolfChannel.com and their branded platforms. A similar arrangement will exist with telecasts on CBS where a co-branded video player will simulcast the telecasts for visitors of both PGATour.com and CBSSports.com.
The tour had hoped to begin the simulcasts at last weekend’s Hyundai Tournament of Champions, but it wasn’t ready yet. The tour said it plans to have the simulcast up and running early this year, but the look and feel and commercial inventory could not be determined.
The tour’s run of sales success in the last two years has prevented any erosion from its tournament schedule or its revenue through difficult economic times. Sales and marketing revenue steadily grew in the single percentage points in 2011 and ’12, the tour said.
In 2012, when 11 title sponsor deals were set to expire, the tour renewed 10 of them. Transitions Optical, the sponsor in Tampa, was the only one that didn’t come back. Yet another title sponsor, AT&T, signed on for the Byron Nelson Championship in 2015 and ’16. Those title sponsorships go for $6 million to $8 million a year for tournaments that are televised by CBS or NBC. Roughly half of that money goes to the networks for advertising and the other half supports the tournament.
Additionally in 2012, the tour extended FedEx’s hefty deal, re-signed MasterCard, brought in new tour partners in Avis and Aflac, and found Web.com to replace Nationwide on the developmental tour.
“The tour has done an amazing job of selling their assets in both difficult times and prosperous times,” said Kevin Ring, vice president in IMG’s consulting division. “They’re in such a strong position in North America that they can start going into Latin America and other places because there’s not a lot of inventory available [domestically]. The tour is in a truly enviable position.”
Expansion has followed the tour’s success domestically. The new Latinoamerica tour launched in September, while PGA Tour Canada will embark on its first season under the tour’s management this year.
That means the challenge in 2013 will be selling new umbrella sponsorships for series that don’t have a proven track record. Those umbrella deals, which will offer brand integration into the logo for those developmental tours and a slew of media and on-site assets, will sell for $3 million to $4 million a year, according to industry sources, and are being sold internally by the tour’s sales team.
“More brands are finding our international footprint and our international TV distribution to be a strength of ours,” Monahan said. “We’re talking to more domestic companies that are looking to expand internationally, and to international companies as well. … We’re spending a lot of time talking to companies in the market for those two tours. Those include domestic businesses that are looking to grow into those markets, as well as companies that are based in those markets. Finding the right umbrella sponsor for those two tours is a big priority.”
Zajac said the tour has effectively developed a global brand for a property that is almost exclusively U.S.-based. The World Golf Championship events, new tournaments in Asia and a growing number of international stars playing on the PGA Tour has contributed to that.
“One of the things that’s particularly attractive to many sponsors is the global impact of the tour, especially when you consider nearly 50,000 broadcast hours going out to more than 200 countries outside the U.S. each year,” Zajac said. “Continuing that global relevance is important.”
Only Hyundai’s deal for the season-opening Tournament of Champions expires this year. Going into the tournament last week, the tour characterized those negotiations as ongoing. Even if Hyundai doesn’t return, SBS, a second-level sponsor, is signed through 2019 and would take over the title sponsorship, meaning the tournament would remain on solid financial footing.
Zajac said the new long-term broadcast deals with CBS and NBC through 2021 allow the tour to “get out in front of renewals and wrap up sponsors for longer terms.”
“The tour has done a good job of effectively building beyond the things you could always count on — an audience rich with business decision-makers, a positive image for the sport, and a great charitable story,” Zajac said. “It was only two years ago that top guys like Lee Westwood and Rory McIlroy wouldn’t take up a PGA Tour membership. Now, they’re all members.”