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Volume 21 No. 1
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From niche to a network

Comcast-NBC merger helps drive Golf Channel’s growth

When Kelly Tilghman came to the Golf Channel 15 years ago, she worked in the video library for a startup that was in barely 100,000 homes.

As she sat in the makeup chair two weeks ago, preparing to lead Golf Channel’s 60-plus hours of coverage from the Ryder Cup, she marveled at how her network, which is now in 84 million homes, used to be characterized as the “Little Engine That Could,” the nice, little niche channel that covered one sport with meager resources.

“We’re no longer niche,” said Tilghman, from the TV compound at Medinah. “We’re a network.”

Inside Golf Channel

People to watch

Mike McCarley, president
Molly Solomon, executive producer;
SVP, production and operations
Tom Knapp, SVP, programming
Chris Murvin, SVP, business affairs
Jeff Foster, SVP, new media sales
Will McIntosh, SVP, business development
Regina O’Brien, SVP, marketing
Jay Madara, chief financial officer
Geoff Russell, executive editor

Nearly two years earlier, Golf Channel’s owner, Comcast, acquired NBC, a move that gave Golf Channel access to the resources and reach of a broadcast network. During the subsequent time, Golf Channel’s ratings have soared to all-time highs, thanks in large part to the cross-promotion it has enjoyed as part of NBC Sports Group.

The channel is on pace to register its most watched year in history, besting a record that was set last year. It just completed its best third quarter in history, posting viewership figures that are up 20 percent over last year. It averaged 1.25 million viewers Sept. 21 for the second round of the Tour Championship in Atlanta. On Sept. 30, its Sunday morning “Live from the Ryder Cup” coverage averaged 442,000 viewers.

The channel set viewership records for seven of the first nine months this year.

Golf Channel unquestionably has become a shining example of how the Comcast-NBC merger can benefit a single channel.

“Nationally, Golf Channel has benefited the most and benefited the quickest from plugging into the power of NBC,” said NBC Sports Group’s Group President Jon Litner, who oversees Golf Channel and Comcast’s regional sports networks. “To create a golf vertical business, irrespective of platform, and do it as quickly as we’ve done it, has been a great success story.”

Tilghman’s “Little Engine That Could” theme was repeated by several Golf Channel executives during the Ryder Cup, from the channel’s president, Mike McCarley, to executive producer Molly Solomon.

From its launch in January 1995, the channel was niche by design. It had original series, like “Big Break” and “The Haney Project,” that drew steady albeit not overwhelming audiences. A 15-year deal with the PGA Tour struck in 2007 gave the channel rights to first- and second-round coverage of events.

But ever since Golf Channel became part of NBC Sports Group, it has clearly transcended other NBC and Comcast sports properties. Its September prime-time average of 150,000 viewers is nearly 60 percent higher than its sister network, NBC Sports Network, which averaged 94,000 viewers. The network touts itself as the fastest-growing cable channel in the country, and its ad sales revenue has increased significantly, the network said.

“We’ve gone from the ‘Little Engine That Could’ to a runaway freight train,” Tilghman said. “You can sense the change. With all of the promotion we receive now [from NBC], it feels different.”

Golf Channel President Mike McCarley helped make sure the Orlando-based network wasn’t isolated from NBC.
Golf Channel’s success at integrating with NBC began almost immediately after federal regulators approved Comcast’s acquisition in January 2011. In fact, the seeds of Golf Channel’s success were sown a few weeks before the approval. Dick Ebersol, then chairman of NBC Sports, installed McCarley as Golf Channel’s new president just days after the acquisition’s approval. McCarley replaced Page Thompson, who left about four months earlier after a three-year run as president.

McCarley had been a member of Ebersol’s inner circle, with strong ties at 30 Rock. With the job based in Orlando, Ebersol believed he needed someone with deep NBC roots to make sure the network was not isolated. McCarley fit that bill.

Three weeks after McCarley was named Golf Channel’s president, golf telecasts on NBC carried the Golf Channel logo alongside the peacock. On the outside, the move to add Golf Channel’s logo to NBC’s telecasts seemed simple enough. NBC’s golf telecasts were branded as Golf Channel on NBC, much like sports programs on ABC already had been branded as ESPN on ABC. But the move showed a working relationship between the cable and broadcast channels well before any other NBC or Comcast property were able to work together.

The idea to create one golf business at NBC Sports Group is something that executives had been planning for months.

“We were talking about how from day one we were going to combine the brands of Golf Channel and the peacock and how one would drive to the other and how we should create one identity among all the other golf properties we’ve had,” said Seth Winter, NBC’s executive vice president of sales and marketing. “This was something that was planned well in advance and executed flawlessly.”

For Winter, that strategy helped ad sales, which he said is up “low double digits” this year. Some of that increase has to be attributed to the resurgence of Tiger Woods, a player who brings high ratings when he plays well, and a slew of emerging 20-something stars on the PGA Tour.

But Winter said advertisers’ interests extend beyond Woods, causing NBC to start to look at bringing in nontraditional advertisers.

Ad sales are pacing with the channel’s ratings gains. In the third quarter this year, Golf Channel averaged a record-high 141,000 homes in prime time. The number is especially impressive considering that the channel carries few live events in prime time.

Golf Channel’s ratings are helped by NBC promotion, executives say. But Golf Channel also made subtle changes to its schedule that have worked. On executive producer Tommy Roy’s suggestion, Golf Channel cut commercial breaks to less than 2 1/2 minutes, which is the amount of time between golf

From top, Kelly Tilghman (left) on set; Golf Channel Drive street renaming; network co-founders Joe Gibbs and Arnold Palmer
shots. The new commercial breaks don’t disrupt the broadcasts’ flow as much, McCarley said.

McCarley also made sure that the best-performing shows were scheduled in the best time slots. “I joke now that a revolutionary programming strategy that was put into place was to replace low-rated programming with high-rated programming that was of higher quality and a better fit for the brand,” he said. “There were shows that were pretty easy to target.”

Added Solomon: “We saw the results very quickly on the air and in our ratings. It’s almost like a different segment of the golf-viewing population and sports fans found Golf Channel again. … We’re pushing the golf consumer back and forth between the platforms. That’s profitable for both NBC and Golf Channel. We’re keeping the viewer in the family.”

McCarley points to the BMW Championship to show how far Golf Channel has come.

In September 2011, the tournament moved Saturday’s tee times up to accommodate the start time of a Notre Dame-Michigan State football game that NBC was carrying that afternoon. The move led golfer Luke Donald to tweet, “Thanks Notre Dame for my 7.35am tee time. I knew there was a reason why I didn’t like you!”

Golf Channel
Viewership Numbers

Month Total day Prime time
February 2011 119,000 150,000
March 2011 105,000 144,000
April 2011 102,000 145,000
May 2011 85,000 119,000
June 2011 85,000 157,000
July 2011 71,000 121,000
August 2011 112,000 154,000
September 2011 77,000 102,000
October 2011 69,000 106,000
November 2011 126,000 333,000
December 2011 68,000 113,000
January 2012 87,000 169,000
February 2012 142,000 181,000
March 2012 134,000 164,000
April 2012 116,000 173,000
May 2012 113,000 152,000
June 2012 118,000 160,000
July 2012 97,000 152,000
August 2012 88,000 114,000
September 2012 121,000 150,000

* Total day is 6 a.m. to 6 a.m.; prime time is 8-11 p.m. Source: SBJ research based on Nielsen data

A week later, McCarley and Finchem were sitting in the clubhouse at the Tour Championship in Atlanta when McCarley floated the idea of starting the tournament on NBC and ending it on Golf Channel. That way, the PGA Tour can mitigate some of the flak it took from fans complaining about television dictating schedule changes.

Finchem agreed.

Last month, the third round of the BMW Championship, again, was going to conflict with a Notre Dame game on NBC, this one against Purdue. NBC and the tour agreed that NBC would cover the early part of the third round, with Golf Channel covering the latter part. NBC averaged a 1.6 rating from 12 to 3:30 p.m. ET. Golf Channel pulled a respectable 1.3 rating from 3:30 to 7 p.m. Not surprisingly, it was Golf Channel’s highest-rated show of the week.

“It’s little things like that that you’re able to do that we weren’t able to do previously before bringing the two groups together,” McCarley said.

In fact, those little things weren’t even contemplated in the years when Golf Channel resembled the “Little Engine That Could.” McCarley recalled having lunch with one of Golf Channel’s founders, Joe Gibbs, at the Masters just two months after he took the job. Gibbs regaled McCarley with tales of the channel’s early days, when he and Arnold Palmer, one of his partners, worried about not being able to make payroll.

“They had a vision and a dream, and they created a business plan,” McCarley said. “But the business plan only got them so far. Their dream and the vision they created together never contemplated what happened after NBC Universal came together. … I am a firm believer that the best is yet to come. I think we’re scratching the surface.”