Swinging for the green: PGA Tour looks to have new media rights deals by year’s end
The PGA Tour is confident that it will complete its next media rights deals by the end of this year even though its current agreements with CBS and NBC run through 2021. In the coming weeks, the tour will invite media companies to deliver formal pitches at its offices in Ponte Vedra Beach, Fla., with the goal of having new deals in place by January — two years before its current ones end.
All of the tour’s U.S. rights are up for bid, including its broadcast TV deals with CBS and NBC, its 15-year deal with the NBC-owned Golf Channel and its PGA Tour Live, which is part of NBC’s direct-to-consumer service NBC Sports Gold. None of the tour’s current rights deals grant exclusive negotiating windows or first-refusal rights to the networks — clauses that are standard in most rights deals. That means the tour is free to negotiate with any media company at any time.
“We’re in a position where we have every possible right that could be licensed and every type of relationship that could be created on the table for us,” said Rick Anderson, the PGA Tour’s executive vice president of global media. “We’ve been having informal discussions with everybody that you could think of in terms of rights relationships. … That’s been an extremely positive experience for us. There’s a tremendous amount of interest from traditional media companies and non-traditional companies.”
The PGA Tour has been holding informal talks on its media rights for the past several months. Still, its aggressive timing on new media rights pacts comes as a surprise since the tour still has two years to go on its current deals. If the PGA Tour signs new deals with CBS and NBC, it will be able to add new features two years early. If it moves on from CBS and NBC, the tour believes that it will need those two years to develop a new channel and digital presence.
Another reason for the tour to move early is to take advantage of an overheated media rights market before the NFL comes in and takes over a sizable piece of that market. The NFL’s deals are up in 2021 and 2022, and all indications are that the $5.5 billion of linear TV rights deals that the league collects annually will see a huge increase. The fear is that the sports rights marketplace will become much tighter after the NFL cuts its deals.
Tour executives expect a sizable rights fee increase given the amount of interest that media companies already have showed. The tour’s current broadcasters — CBS and NBC — have said they will bid to keep their packages. WarnerMedia has expressed a strong interest in picking up a package of rights. After largely getting out of the golf game under John Skipper’s watch, ESPN’s new Jimmy Pitaro-led regime has told the tour that it is interested in re-engaging. Fox has said it could be interested in a package of tournaments around its U.S. Open and the FedEx Cup playoffs, which now run in August before the NFL season kicks off.
Among the big tech companies, Amazon has showed the most interest and is expected to be invited to make a formal bid. Adding that all up, the PGA Tour feels timing and increased appetite for live rights are in its favor.
Anderson will lead the negotiations, with Commissioner Jay Monahan involved, and given the complexity of the negotiations, several senior executives from across various departments also will be involved.
The tour’s deals will be more than straight rights agreements. Anderson said he is looking for one or, potentially, two linear channels. He pointed to the content it has from the PGA Tour, LPGA, PGA Tour Champions and Korn Ferry tours as evidence that the tour has enough content to fill two channels.
“You have enough golf … to support a second channel or part of a second channel,” he said. “It’s a volume thing in terms of how much actual live hours of content you can program on an actual 24/7 linear channel.”
Anderson’s early talks have focused on media companies’ digital plans, which is where the tour could sell different packages to fans. This is where Amazon could come into play.
“When you start talking about capturing every player and every shot, the digital platform is where that would come to light,” he said. “We know that our opportunity extends beyond the current business model of cable and a linear channel. We can build a real digital platform that has content that people will pay for and in a different way than any other sport can do.”
The PGA Tour isn’t the only golf property seeking a deal. The tour also represents the LPGA in its media rights deal with Golf Channel that runs through 2021 as part of the strategic alliance made in 2016 between the two properties.
CBS has held PGA Tour rights since 1970, and all indications are that the network wants to keep a package of tournaments for its broadcast network.
NBC has made it clear that it wants to keep its PGA Tour relationship. Sources said NBC is open to allowing the tour to take an ownership stake in the Golf Channel as an enticement to get a deal done.
Amazon has been the most active of the big tech companies in the media rights space and is expected to make a significant bid. Amazon’s advantage: The tour wants to pursue a digital strategy, which would be right up Amazon’s alley.
Discovery signed a 12-year, $2 billion deal for the PGA Tour’s international rights. It paid $30 million to $35 million for Golf Digest this spring. But Discovery has not showed interest in the tour’s U.S. rights.
Much of ESPN’s interest revolves around its streaming service ESPN+. But new President Jimmy Pitaro has expressed interest in the PGA Tour’s linear rights, too.
Sources say Fox is not interested in a big PGA Tour package, but the tour hopes it will want tournaments around the U.S. Open to help streamline its production and sales processes around the sport.
WarnerMedia has showed a lot of interest. Last week, AT&T’s Randall Stephenson said he is in the market for live sports rights for the company’s planned direct-to-consumer streaming service HBO Max. PGA Tour rights would fit that bill.