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Volume 23 No. 24
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PGA Tour exploring idea of own channel

Execs gauge interest as opt-out year nears

The PGA Tour can opt out of its media deals with CBS and NBC in 2018, and tour executives already have reached out to several media companies to gauge their interest in bidding for a package of rights or, potentially, helping the tour launch its own channel.

The tour’s deals with CBS and NBC run through 2021, but both allow the tour to open the contracts in 2018 to modify some of the terms or to end the deals early, at the end of that year. The tour is locked in its deal with the Golf Channel through 2021 with no opt-out provision.

The tour signed the CBS and NBC deals in 2011. The Golf Channel deal was signed in 2007.

Tour executives have had informal talks with Fox, ESPN and Turner in recent weeks, sources said. Those talks were described as preliminary, with some network executives privately expressing skepticism that the tour would opt out and change networks after 2018.

Complicating matters for the tour is the state of the market in sports media, where rights fee money is much tighter than it used to be. ESPN and Fox Sports have been cutting costs in recent months, with ESPN laying off 300 employees last fall and Fox Sports accepting buyouts from long-term employees this spring.

Turner and CBS negotiated an NCAA men’s basketball tournament extension this spring that pays the NCAA $1.1 billion per year through 2032. Turner is about to start its new NBA deal as well, a contract that will cost the network $1.2 billion a year over nine years.

With the opt-outs two years away — combined with the tour taking back its digital rights from Turner in 2013 — PGA Tour officials are studying whether the time is right for the tour to own a channel, either on cable or via an over-the-top service. Potentially, the tour could cut a new Golf Channel deal that gives it a stake in the network. This would follow the strategy Golf Channel parent NBC Sports Group has taken with its regional sports networks.

It also would be critical to the tour launching a channel before 2022. Content for the new channel almost certainly would need to include some rights under contract to Golf Channel through 2021. Without a Golf Channel buy-in, the tour would have to wait until that deal expires to gain access to those rights.

Industry executives note that the tour’s channel plan is helped by its recent alliance with the LPGA that calls for the tour to negotiate the LPGA’s domestic television rights. The LPGA’s current deal, signed in 2009, runs through 2019 with Golf Channel. Sources said those rights, combined with content from the tour-owned Champions and tours, would give the tour sufficient programming to explore creating its own channel. But those rights under contract to Golf Channel through 2021 would ultimately need to be part of the mix, too.

Any new cable channel likely would run into distribution problems, as well, given the market trends of cord cutting and cord shaving. The tour almost certainly would face an immediate challenge if it were to take rights away from Golf Channel and then try to persuade Golf Channel’s parent, Comcast, to carry the new tour channel. Comcast is the United States’ largest cable operator.

“As we line up rights that become available, we are looking at every option,” said Rick Anderson, executive vice president of global media for the PGA Tour.