Golf Business News – PGA Tour receives $2 billion for non-US television & digital rights
11.37am 5th June 2018 – Media – This story was updated on Tuesday, June 5th, 2018
A “Netflix for golf” will be the result of the US PGA Tour’s $2 billion sale of non-US television and digital rights to Discovery, the owners of Eurosport, writes Ross Biddiscombe.
In a ground-breaking deal that is unique in the sporting world, the PGA Tour events like the FedEx Cup, the Players Championship and the Presidents Cup will be sold in over 200 countries by one of the most globally aware broadcasting brands. The 12-year deal means every golf fan on the planet will soon be able to see Tiger Woods, Jordan Spieth and all the world’s best players 43 weeks a year on a smart phone app or via a normal digital TV channel. The alliance between golf’s most powerful tour and one of the world’s most capable TV companies is expected to help increase the sport’s fan base as well as grow the game throughout the world.
The deal begins in 2019 and will carry through until 2030 and will threaten current broadcasting partnerships including the one in the UK with Sky whose deal is up for re-negotiation in 2022. However, there is nothing to stop a sub-licensing deal being non-exclusive in the UK and including the BBC or other terrestrial channels like ITV or Channel 4. In addition, the presence of the Netflix-type app in all countries outside the US will almost certainly increase the number of golf fans watching live tournaments.
The PGA Tour has sold approximately 2,000 hours of content per year, including the five minor tours operating under their umbrella (for example, the secondary Web.com Tour and the regional tours in China and Canada) and nearly 150 tournaments annually.
However, the sale of the live linear rights (ie those that allow coverage on TV sets via regular television channels) in 220 countries and territories is less significant than the rights for the video streaming service (i.e. a Netflix-style app and known as an over-the-top or OTT service). All major broadcasters believe that the Netflix/OTT model is the future of TV viewing and Discovery already has successful experience of this kind of product with its Eurosport Player app, so the Tour’s products are in safe hands.
Discovery expects to re-coup its $2 billion investment by sub-licensing to TV channels and with micro payments of the app. The broadcast giant has also pledged to invest millions more dollars in making additional off-course content to support the live programming and create an app that will be watchable on non-tournament days as well as during live coverage.
Jay Monahan, Commissioner, PGA Tour, said on Monday at the announcement that the partnership could mean the Tour opening offices in cities such as London, Tokyo and Beijing. “This is an exciting next step for the PGA Tour, which presents a tremendous opportunity to accelerate and expand our media business outside the United States, better service our international broadcast partners, and drive fan growth with a deeply experienced strategic global partner,” he said. “It also will deliver more value to our sponsors as it presents a tremendous opportunity to engage new and diverse audiences around the world.”
Prior to this deal, the PGA Tour (like all sports bodies) was selling its TV and digital rights itself but has now essentially given that job away to an experienced seller who is already working in more countries and with more broadcasters.
Discovery made a leap into sports broadcasting in 2015 with its purchase of a controlling stake in Eurosport, the pan-European channel, and has been a huge advocate of digital apps for broadcasting, especially for events like the Olympic Games, the Tour de France and the French Open tennis championship under the Eurosport Player brand. It expects to re-coup its golf investment in the growing markets such as China and India.
(Editor’s note: Further analysis of this story will appear in GBN tomorrow)
Pictured top: David Zaslav, President and CEO, Discovery and Jay Monahan, Commissioner, PGA TOUR, credit PGA TOUR
PGA Tour www.PGATOUR.com