The PGA Tour, now under the leadership of Commissioner Jay Monahan, announced major media deals with both digital and traditional platforms at the beginning of March.
The new agreements reportedly increased the PGA’s annual media haul to more than $700 million, a 75% increase from its previous $400 million take annually. The media partners who bought into the nine-year deal included Viacom/CBS, Comcast, parent of NBC and The Golf Channel, and Walt Disney, parent of ABC/ESPN. What does this mean for the sport and the association owned and governed by its players? What does it say about the value of golf in the digital age? Perhaps most importantly, will golf and its new media partners be forced to get creative in order to mitigate the financial impact of COVID-19?
Like its brethren in the sports entertainment industries of football, basketball, baseball, soccer, and hockey, the PGA’s deal proves the critically valuable nature of live sports content. But unlike those team sports, golf relies on a combination of a few individual stars and an audience of loyalists who hold the game in high esteem. Team sports have stars but they also leverage team and regional affinities, which can create media audiences that can last for generations. But what golf offers – and none of the team sports can match – is an extremely appealing audience for certain advertisers looking to reach high-income viewers. Think about Rolex, Charles Schwab, Mercedes, and similar brands attempting to reach and build loyalty with a large block of well-healed consumers. The PGA Tour, and other major golf events, are perhaps the best vehicles for such companies.
With the new media partnerships, ESPN+ becomes the exclusive home for PGA Tour Live, the tour’s subscription service, offering 4,000 hours of coverage at 36 annual events. Discovery Communications inked a multi-year deal in 2018 for the international rights valued at $2 billion in total. Digital and streaming rights have helped drive the PGA to new heights in media. And part of that credit goes to the core group of current stars who’ve embraced social media and are comfortable living part of their lives out though non-traditional platforms. Maximizing the value of non-traditional media deals will include creating a lot of off-the-course content, too. Expect to see more of Brooks Koepka, Rory McIlroy, Justin Thomas, Rickie Fowler, and – if he ever finds his driver control again – Jordan Spieth in non-traditional settings.
The new deals were negotiated during an unprecedented period of economic growth, when many golf fans were experiencing unprecedented income and personal wealth growth. More golf fans were participating in the stock market and buying new cars, watches, and drivers. What kind of long-term impact the COVID-19 pandemic and its related economic calamity will have on all of this is unknown. Even if the economy recovers quickly by the summer, there are additional questions that remain. Will the PGA be able to use the new partnerships with media companies to effectively grow its brand, the sport, and its stars? Will any of the additional $300 million annually make its way into individual tournament purses, either to attract the world’s best to more PGA events or to reward the PGA members outside of the top 50 in earnings?
Finally, could the deals include rights to stage unique events outside of the traditional PGA Tour schedule? For instance, could we really see Tiger and Peyton Manning take on Phil and Tom Brady? Given the current lack of any live sports programming, can you imagine the ratings for a series of live golf events held in May, June, and July? There are ways to get creative with skills contests and other events that don’t require the normal tournament logistics. If a sport could be played while maintaining safe social-distancing and not sharing a common ball, it’s golf. You’ve got to imagine Monahan and his new media partners have already been in discussions about such “made-for-television” events. If not, let’s hope they start now.
This appeared in Forbes on April 2, 2020.