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Volume 21 No. 2
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In bypassing USGA, ESPN sets up to keep NBA

When news broke that Fox Sports had snagged the USGA rights late last week, we asked our vacationing media writer, John Ourand, to offer his instant analysis of the deal. Here are his three takeaways:

> This is a blow to NBC Sports Group: Before leaving on vacation last week, I checked in with various sources to see how the negotiations were going. I was told that Fox was sniffing around, but I didn’t believe its interest was serious. I couldn’t envision a scenario where NBC Sports Group lost this deal, especially considering that it operates a channel totally devoted to golf and, by the end of its current deal, will have had a strong, 20-year relationship with the USGA. Golf Channel still has long-term deals with the PGA Tour and the LPGA. But without high-profile USGA programming, it’s hard to see Golf Channel increasing its license fee much beyond 29 cents per subscriber per month, according to SNL Kagan, or increase its distribution much beyond the 82 million homes it’s currently in.

> Pencil in the NBA for ESPN: ESPN never appeared to be in the running to keep its piece of the USGA deal, which included weekday coverage of the U.S. Open. If Fox didn’t get the package, it all was most likely going to go to NBC Sports. Coming on the heels of ESPN’s decision not to bid for NASCAR rights, it appears the company is saving its resources for the next big rights deal: the NBA. ESPN brass has been upfront about its plans to keep NBA rights. Disney CEO Bob Iger indicated on a call this week that he expects ESPN to renew its NBA deal after the current deal runs through the 2015-16 season, calling the league an “important platform” for the company. With the departure of NASCAR and USGA rights, ESPN is setting itself up for a big run at the NBA.

> This is a strategic win for Fox: Fox is about to launch two 24-hour sports channels in Fox Sports 1 and Fox Sports 2. It needs content, and this deal provides it. Primarily, it’s a content deal. Forget about the U.S. Open, which is the most marquee event in this deal. It also gives Fox rights to the U.S. Women’s Open, U.S. Senior Open and the USGA national amateur championships, beginning in 2015. Fox was able to fill its schedule with high-quality content that it took from a competitor. That’s a big win, no matter how you look at it. Fox should see benefits beyond the amount of content, too. Much has been made of the Fox attitude. Fox Sports 1 is as closely aligned to mixed martial arts as it is to any other sport. This deal gives Fox an opportunity to reach an audience the network never has targeted before.