The $2 billion purchase for all non-US television and digital rights of PGA Tour tournaments by the broadcasting giant Discovery is an absolute trailblazing deal creating a Netflix-style sports app, writes Ross Biddiscombe, something that has been talked about within the sports business industry for several years, but never achieved by anyone else on this scale.
So, well done to the PGA Tour for taking this leap of faith and showing all the other sports that this is not such a stuffy game after all – golf is reaching out to the digital generation with a large scale, direct-to-consumer service that will operate just like Netflix does for general entertainment.
The deal has been about six months in the making and certainly has taken everyone by surprise. Yes, there will still be PGA Tour live on traditional sports channels, but it’s the app that is making the news because that’s increasingly how we’re all watching video content. Plus, there can be little downside – the American tour has caught the digital wave and may well ride it all the way to the creation of a world golf tour on its own terms (more of that in a moment).
Discovery is now in charge of TV and digital deals to fix coverage of all PGA Tour-owned tournaments in over 200 countries. Some of the key new agreements will be with Japan and Australia to start next year and the UK for 2022, but PGA Tour golf in all the other nations is now controlled by Discovery up to 2030. The global broadcaster – with its experience of the recent Winter Olympics and own Eurosport Player live viewing app – is perfectly placed to increase the distribution of golf content and has committed to produce even more non-tournament material, much like it does for its other key sports such as cycling and tennis on Eurosport. So, it won’t just be live golf on the yet-to-be-named Discovery app, the star golfers will be seen off the course, behind the scenes and with lots of supporting programmes that is an extra approximately $20 million per year commitment by the broadcaster.
For the PGA Tour, this deal means 12 years’ worth of guaranteed money for an already-rich sports organisation, a situation that can surely only make it more powerful. With Tiger Woods returning with such vigour and a raft of exciting young talent including over 80 non-US players from 25 countries, the PGA Tour is unparalleled as the No 1 place for professional golf.
The FedEx Cup, the Players Championship, the Presidents Cup and all 150 PGA Tour annual tournaments will be pushed out to vast new audiences at the expense of even the four majors, the World Golf Championships and also the Ryder Cup. So, could The Masters or The Open Championship take the same revolutionary approach to its own future broadcasting? Well, yes, but they have the benefit of seeing Discovery trial the idea around the world before deciding for themselves.
And, ironically, the European Tour with tournaments taking place in 30 different countries would’ve made just as much sense for a Discovery-type partnership. CEO Keith Pelley likes breaking with tradition (think GolfSixes and Shot Clock Masters). Who knows, Pelley may one day strike a similar international deal using all his tournaments plus maybe the Ryder Cup matches that take place in Europe, although it’s all complicated by the fact some rights are due for renewal in 2018, while others are not, such as the biggest market, the USA, which is signed up with The Golf Channel until 2024.
All this global TV and digital broadcasting activity comes amid rumours of a world golf tour and the PGA Tour’s rights deal is just what any world tour would have wanted. So, the Tour’s commissioner Jay Monahan has undermined any plans for a global golf operation while, at the same time, showing that he is best placed to adopt that strategy at some time in the future.
Meanwhile, in the UK, which is a large market for the PGA Tour, Sky’s long-term broadcasting agreement ends in 2022 and will certainly change after then. A sub-licencing deal is most likely rather than continued exclusive TV rights to all four days of tournaments. Discovery could also break up the rights in the way the market operates in the US where The Golf Channel is the main source of coverage early in tournament week, but with another channel (perhaps Eurosport) coming in strong for the weekend. There’s lots of ways to cut the broadcasting cake, but Discovery will always want its golf app to be prominent, so each country will have a different kind of service tailored to their needs. In the UK, it’s even possible that the BBC, ITV or Channel 4 might jump in again for some kind of coverage if the price is right. Really, all bets are off when each local negotiation starts.
Globally, though, the significance is about more eyeballs watching golf and that should convert into more new golfers which, in turn, will mean more sales of equipment, merchandise and all things PGA Tour and golf related. Plus, of course, more eyeballs for the PGA Tour means more commercial dollars from global sponsorships which equals more money for prize funds that will keep attracting the very best players. And so it goes, bigger and better at every turn.
But one country stood out during the announcement on Monday – China. If, as it’s anticipated, a male Chinese golfer breaks into the top 50 of the world rankings in the next few years and even wins on the PGA Tour, so all predictions for golf’s rise in global popularity will go through the roof. Countries like Japan and South Korea (where fans are very smart about their smart phone viewing already) will love the golf app from year one, but if that one Chinese golfer emerges, then the size and scope of revenues will be incalculable.
This might look like a mega-deal for mega-bucks right now, but the sports broadcasting world is following Netflix’s lead and, if it works (and likely it will) then this PGA Tour-Discovery partnership will be just one of many and could look like a real bargain.
PGA Tour www.PGATOUR.com
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