SBJ/Aug. 12-18, 2013/Media

How USGA found a fit with Fox

‘Fresh perspective’ quickly won over golf executives

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When Fox Sports executives Randy Freer and Larry Jones first sat across the table from the U.S. Golf Association on Aug. 2, a mix of curiosity and skepticism filled the New York City conference room.

Some saw Fox, known for its cutting-edge production and attitude, as the perfect alternative to NBC’s tradition-laden coverage. Others were skeptical that Fox was a legitimate contender for the broadcast rights to golf’s ultra-conservative governing body. Just two years ago, the PGA Tour had attempted to draw Fox into the bidding for its rights and Fox, a complete stranger to golf, declined.

But the USGA, spearheaded by Sarah Hirshland, senior managing director of business affairs, and consultants from Wasserman Media Group, was immediately taken by the enthusiasm coming from Freer and Jones, who positioned the U.S. Open among Fox’s other premium events like the World Series and Super Bowl.

By the end of the six-hour meeting in Proskauer’s Times Square office, Fox officials had made a clear impression. Hirshland, during her 45-minute drive home to the New Jersey suburbs, started to imagine what the U.S. Open might look like on Fox.

USGA President Glen Nager with 2013 U.S. Open champ Justin Rose
Photo by: GETTY IMAGES
A second day of talks led to a surprising 12-year agreement worth a total of just more than $1 billion between Fox and the USGA. The deal includes the U.S. Open, U.S. Women’s Open, U.S. Senior Open and the association’s 10 amateur competitions on Fox’s broadcast channel and the soon-to-launch Fox Sports 1.

From the very beginning, Hirshland told the incumbents, NBC Sports Group and ESPN, that the USGA was looking for something different. She wasn’t bluffing.

“This wasn’t as simple as an extension,” Hirshland said. “We went into this knowing the USGA needed to have a strong position and a distinctive voice in golf. We asked the incumbents to think differently on our behalf. We pushed them to figure out the best way for our partnership to proceed and, obviously, we did not come to terms with either incumbent.”

The USGA’s 60-day negotiating window with NBC and ESPN expired on Aug. 1 and the following day Fox was at the table. Throughout that Friday, the USGA pushed Freer, co-president of Fox Sports, and Jones, the network’s COO, to test the boundaries of its flagship event, the U.S. Open. They also wanted a commitment to live coverage of the USGA’s amateur events, most of which have never been televised live.

Fox, with hours of new shelf space on FS1 and the need for programming, kept saying yes. Even though Fox did not present specific innovations that it would take to the golf course, the network’s track record of producing big events excited the USGA.

So did Fox’s willingness to cross-promote the USGA’s events on its other sports properties. Fox’s annual promotion of the USGA’s events is projected to be in the neighborhood of $3 million, according to industry sources.

“Of course, you’ve got to make people feel comfortable that their product is going to be covered in a professional and quality way,” Freer said. “Look, it’s not 1994 [the year Fox debuted its NFL coverage]. We’ve got a great deal of production credibility. In every sport we’ve been involved in, we’ve taken creative, innovative and exciting approaches. That’s what we do.”

The $85 million-a-year average is well more than the combined $38 million a year that the USGA had been making from NBC and ESPN.

The news that Fox would be the new home for the U.S. Open from 2015 through 2026 was an unpredictable move that no one in the golf industry saw coming. Fox’s audience is linked to the NFL, Major League Baseball, NASCAR and MMA, not golf. And the USGA’s brand has long been strapped to tradition and conservative thinking.

“I initially was shocked,” said Ed Kiernan, president of the New York agency Engine Shop and a former golf executive at Peter Jacobsen Sports. “But after thinking more about it, it’s going to be great for the game. What Fox has done from a production standpoint in NASCAR, MLB, the NFL … they’ll take golf and make it more mainstream.

“I just never saw a stoic association like the USGA pioneering this.”

In addition to money, one of the prime negotiating points was a commitment to increased coverage, especially live hours. Fox’s deal provides 146 total hours annually, of which 76 will be devoted to the USGA’s amateur competitions, all live. That’s a sharp increase from the current deal, which features 90 total hours, 30 for amateur events.

The three major Opens will appear on Fox broadcast during the weekend rounds. FS1 will have a piece of the first two rounds, as well as the amateur events, the Walker Cup and the Curtis Cup. Complete broadcast details have not been finalized, Fox said.

“Having FS1 was a huge help,” Freer said. “For the number of hours committed to this, the only way that would have been possible is due to the addition of FS1. We’re here to compete for rights and you need to have fully distributed outlets to do that with.”

But NBC was a strong bidder throughout, and its aggressive offer included more total hours on the broadcast channel and Golf Channel, but not as many live hours, according to industry sources. The live coverage plus the re-airs on Golf Channel were perceived as double counting the hours, and the USGA preferred Fox’s number of live hours.

“Things with Fox have clearly changed,” said Kevin O’Malley, a media consultant who formerly worked at CBS and Turner Sports. “The advent of a cable channel as a truly serious enterprise makes a deal like this much more attractive. It gives them a championship event on Fox broadcast and an inventory of events that are very important for the cable channel. The dual purpose is really key to this and explains a philosophical sea change for the network. And it’s huge money for golf.”

By last Monday, Aug. 5 at 5 p.m., all the bids were due and a clear choice had begun to crystallize.

The USGA could stay with NBC, a valued and respected partner that had televised the last 19 U.S. Opens, in a move that would be familiar, comfortable and consistent.

Or the USGA could go 180 degrees the other direction, selecting Fox, a newbie to the golf space.

ESPN was a distant third in the bidding, and by the deadline was out of the running.

Mike McCarley, president of Golf Channel, led the NBC contingent. Behind the scenes, NBC Sports Group Chairman Mark Lazarus worked the phones with USGA President Glen Nager.

Fox’s bid of more than $1 billion over 12 years was stronger financially than NBC’s, although industry sources characterized NBC’s bid as extremely competitive. The USGA’s attempts to generate a higher bid from ESPN failed.

Nager and Hirshland last Wednesday presented both Fox and NBC offers to the executive committee with a recommendation that they choose Fox. The 15-person committee did just that.

“Their fresh perspective made us believe Fox was the broadcast partner we wanted to have,” Nager said.

Until Aug. 2, the USGA and Fox had talked just once, briefly, before the USGA entered its exclusive window. Fox let its interest be known.

“There was an enormous amount of evolution over the weekend in our talks with Fox,” Hirshland said. “We had not had any real substantive talks until that Friday. They didn’t know us terribly well. But we laid out our original thoughts on where we wanted to go and to their credit, they were incredibly ready to respond in detail. They were very nimble and they worked quickly.”

The parties were informed last Wednesday after the committee vote, and the USGA sent out a press release that evening, a move that generated scorn from its peers in golf because of the timing on the eve of the PGA Championship.

The USGA said it simply couldn’t sit on that news until after the season’s final major.

Now, the USGA and its new partner will let the dust settle before collaborating on the hiring of talent.

“It’s going to be weird listening to someone other than Johnny Miller calling the U.S. Open,” Kiernan said. “There’s going to be a new voice in golf. Who will it be?”

Staff writer Tripp Mickle contributed to this report.

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