Comcast Coughs Up Greens Fee
Golf Channel has high hopes PGA package will boost subscriber base
By Ben Grossman -- Broadcasting & Cable, 1/29/2006 7:00:00 PM
While sports-TV-business insiders are wondering whether the NFL Network will end up carrying the Thursday-Saturday package of eight NFL games, it was actually another “niche” sports network that made waves recently with a big-league acquisition. Comcast's The Golf Channel (TGC) took a big swing this month with a deal to become the exclusive cable carrier of the PGA Tour beginning in 2007. While exact figures were not made public, the 15-year deal represents the largest rights acquisition in TGC history.
It follows Comcast's acquisition of National Hockey League rights for its Outdoor Life Network, which is paying around $65 million this season for the ratings-challenged TV property. The network is also said to be a suitor for the new NFL package as Comcast looks to grow it into a more mainstream sports outlet.
But Comcast is not the only company that thought a major acquisition was worth the risk to pump up a small sports network. News Corp. recently bid for the World Cup soccer tournament to buoy its fledgling Fox Soccer Channel, although incumbents ABC and ESPN ended up retaining the rights.
Now TGC will try to turn the big-money acquisition into results, and in the cable world, that means subscribers. TGC President David Manougian says the move was “the next logical step for the brand” and he hopes the deal will boost the net from 70 million homes to 90 million. TGC has the chance to be a model for niche sports networks that put up major money for rights fees in hopes of getting the subscriber and advertising payoffs. And while the strategy would not work for every niche sports network, industry observers say it was the right play for TGC.
“You can apportion some of the rights fees to sub growth, which is something none of the senior channels can do,” says sports-television consultant Neal Pilson. “The Golf Channel is in that category of not being fully distributed. If ESPN were to get hockey, they wouldn't get one more subscriber than they have today.”
So TGC executives look ahead to 2007. The deal calls for TGC to provide weekday coverage of every golf tournament on the PGA Tour, plus tee-to-green coverage of a small number of Tour events.
Founded by a group that included golf legend Arnold Palmer, TGC has been known throughout its 12 years primarily for a mix of instructional shows and programming from other golf tours, including the European, Champions (senior) and Nationwide (minor league). The network has also found modest programming success with reality shows, such as The Big Break and The Daly Planet, which follows oddball golfer John Daly.
But now the stakes are raised, and Golf World magazine Executive Editor Ron Sirak says TGC will have to up its game. “They're going to have to get better on both sides of the camera to get the level of their performance up to where the PGA Tour has been used to with networks,” he says. “If they want to grow with this deal, that will be essential.”
Manougian wants more PGA-related programming and will attempt such strategies as leveraging the PGA relationship with The Big Break. He envisions pros' taking part in challenges for charity or regular golfers' vying for the chance to play in a PGA event. On-camera, there could be such talent as ABC's highly regarded Nick Faldo and Paul Azinger available.
Sirak says he wouldn't rule out a TGC play for the entire PGA Tour deal one day. NBC and CBS locked up the Tour for six years, beginning in 2007. But for Comcast to acquire the whole package would require a substantial economic commitment, because the PGA Tour is pulling in around $220 million annually from NBC, CBS and TGC with the new deal.
Such deals are far from sure moneymakers, though. The PGA's pacts with CBS, NBC, ABC, ESPN and USA that expire this year were worth a reported $850 million over four years—and accounts say none of them were profitable. ABC and ESPN pulled out of the running this time around when the price tag became too high.
Although Manougian says acquiring full coverage of a few more PGA events is more realistic, he will “actively” look at upping the women's events TGC carries. The LPGA features marketable stars, such as 16-year-old Michelle Wie and the dominating Annika Sorenstam, who plays in traditionally male events, such as the popular “Skins Game.”
Manougian is also working with the PGA Tour to explore using new-media technologies as part of the deal. While no plans are set, anything involving new-media rights would be a joint partnership between TGC and the Tour.
“That is a big topic of discussion,” he says. “We can't just exploit all the non-TV rights without having them involved with us.”
No related content found.
No Top Articles
Digital Rapids provides market-leading software and hardware solutions, technology and expertise for transforming live and on-demand video to reach wider audiences on the latest viewing platforms more efficiently, more effectively and more profitably. Empowering applications from..more