PGA Pact Makes USA a Happy Golfer

USA Network will soon be taking a much bigger swing with golf. The general- entertainment network has significantly bulked up its game under the new Professional Golfers' Association Tour TV-rights package, announced on July 16.

The four-year, six-network, $850-million deal calls for USA to present coverage of up to 35 events annually, up from 14 per year. It will also tee off with a weekend-morning preview show, beginning in 2003.

The sport's increasing popularity — aside from stock-car racing, golf is the only major sport to post ratings gains in recent years — and the worldwide fascination with Tiger Woods helped the PGA to negotiate a 48-percent increase in its rights fee, despite a sluggish advertising market.

The PGA's current four-year deal, which expires next year, totaled $575 million, spread across the same six cable and broadcast networks.

USA also will incorporate various PGA elements across its entertainment programming.

ESPN's event coverage, meanwhile, will be scaled back under the new pact, but it has gained the rights to more high-profile tourneys.

The Golf Channel will lose PGA Tour tournament coverage, but will become the exclusive domestic carrier for the Buy.com Tour qualifying circuit and several ancillary PGA series. Golf tried to hang onto its existing lineup of 14 events, but lost them to USA and ESPN.

As for the broadcasters, ABC, CBS and NBC will telecast 71, 68 and 22 events over the course of their new four-year renewal agreements, respectively.

PGA officials did not return phone calls requesting an interview with senior vice president for television, programming and new media Donna Orender.

It was unclear how the $850 million pie would be divided among the individual networks. Historically, the PGA has not announced the value of its overall contracts, much less individual deals.

But most observers believe that because there was more interest on the cable side, those networks will pay the higher-percentage increases.

Sources said Fox Sports — whose commitments to the National Football League, the National Association for Stock Car Racing (NASCAR) and Major League Baseball leave it with a limited window on the broadcast side — did not bid on either portion of the package.

Turner Network Television made a play for a limited package of events, according to sources.

It has been widely reported that one cable network — believed to be USA — made a bid for the entire cable package.

USA Network president Doug Herzog declined to comment about terms of the deal. He also would not say whether the contract would lead to a license-fee hike for cable operators or whether his channel made an all-encompassing bid.

But he did say USA "would have been happy to be in the Thursday, Friday, Saturday, Sunday golf business all year, but we're delighted with our contract.

"Golf is a hot sport that reaches, like our network, an upscale audience," Herzog added. "The sky's the limit for golf, and we've ensured that USA will be involved for the next four years. It will be one piece, albeit a big one, as we reposition the network going forward."

The network's current monthly license fee is in the range of 40 cents to 45 cents per subscriber, per month — a price some operators expect to rise in the wake of the PGA deal.

"USA piggybacks on the production of the [broadcast] networks on Thursdays and Fridays, so that could have given them more to spend on rights," said one MSO executive. "No doubt, they had to pay significantly more to get all those extra tournaments. I would expect that will come back to us at some point."

USA, which previously telecast 14 events, will air early-round coverage from 30 events and full, four-day coverage of four others. There are also plans to cover a fifth, yet unspecified four-day event.

As part of its "network within a network" pitch, Herzog said USA will air a 52-week series, produced in conjunction with the PGA, on Saturday and Sunday mornings. The show will preview the tournament story lines and set up the day's telecasts.

Herzog said the network, working closely with the PGA, will also likely create "interstitials, entertainment specials and made-for-TV movies" about the players and the tour.

"We're not in the sports business, but we will be in the golf business in a big way," said Herzog, who said there would be a number of cross-promotions with other USA Networks Inc. properties, including an expansion of the present transactional relationship between the company and the PGA.

Each year, ESPN — which currently televises 18 events — will provide early-round coverage of nine tourneys and four-day coverage of five tournaments, including the four "Fall Finish" events.

ESPN has also gained The Memorial and reclaimed the first two rounds of The Players Championship (TPC), commonly viewed as the sport's "fifth major."

ESPN officials said that under the new PGA contract, it would have the four highest-rated PGA Tour events on cable: the Accenture Match Play Championship, NEC Invitational, TPC and the Mercedes Championship. ESPN also boasts early-round coverage of two majors, the British Open and U.S. Open.

"Our strategy going in was about quality, not quantity," said an ESPN spokesman. "With the [Ladies Professional Golf Association] and the [United States Golf Association] events, we already have a ton of golf. We're very happy with our new PGA contract."

The Golf Channel, which offers coverage from 14 PGA tournaments in its current deal, will not telecast any of those events under the new pact. But Golf will be the exclusive carrier for the Buy.com Tour for qualifiers, which will expand its coverage from 11 to anywhere between 12 and 18 events.

The Comcast Corp.-owned network will also air a number of PGA shows, notably Inside the PGA Tour, which currently screens on ESPN; Shell's Wonderful World of Golf (with new installments); and a PGA-produced highlights program on Wednesday nights.

"Sure, we would have liked to have kept our events, but you're talking about 70 to 80 hours of the 1,000 hours of tournament telecasts we have per year," a TGC spokesman said. "With Inside the PGA and the Wednesday-night show, we'll actually have more PGA hours under the new deal."

Paul Kagan Associates sports analyst John Mansell said the contract doesn't necessarily put The Golf Channel in the rough. "The Golf Channel is probably not paying as high of a rights fee," he said. "That savings could keep their license fees down and that might be more encouraging to operators."

ESPN might be able to tell a similar tale. "ESPN also has the LPGA and gets many of the better tournaments," said Mansell. "They may be able to go to operators and say, 'See, we're being fiscally responsible.' "

Herzog said USA is also interesting in maintaining its relationship with another sport that appeals to upscale viewers: tennis. He said the network was "negotiating right now" to renew its contract with the French Open. USA's three-year deal with the Grand Slam tournament expired with the conclusion of this year's event.

He added that USA also "still loves the U.S. Open," but it's "not time yet" to seek a rights renewal for this country's Grand Slam event. The network's deal with the Open ends after the 2002 tourney.