Nets in the Advertising Rough?

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While the PGA and Senior PGA Tours are finalizing their tournament rosters, sellers are trying to line up as much advertising green as possible for the 2003 season.

Networks are currently in the midst of the "golf marketplace," which historically unwinds during October and November. Akin to the upfront, golf manufacturers, financial services companies and other marketers interested in reaching the sport's upscale viewers secure ad schedules for the upcoming season during this time.

That situation is complicated somewhat this year by the absence of title sponsors for some PGA Tour events. On the broadcast side, title-sponsor positions mandate that the purchaser air a number of commercials within that event, as well as take units in other tournaments on the networks. In that way, the confluence of these so-called "spin packages" — usually long-term agreements — account for as much of 50 percent of inventory on the broadcasters.

Ed Erhardt, president of customer marketing and sales for ESPN/ABC Sports, downplayed the impact of spin packages. "That's just another portion of the market," he said, noting that a lot of the bigger ad categories for the market overall and golf in particular over the past five years are "no longer around," as he pointed to difficulties among the, consultancy, telecom and energy sectors.

Peter Casarico, vice president of sports ad sales at USA Network, also dismissed the importance of the title sponsorship scenario, saying those kinds of packages don't require the buyer to purchase commercials on the attendant cable coverage on Thursdays and Fridays.

"Some sponsors do, but by contract they don't have to," said Casarico. "We're selling hard regardless of the tournament's title sponsor."

Casarico, who characterized the 2002 golf market as "the worst in 10 years," said USA is taking a page from the network's general upfront sales strategy, and is looking to boost its volume considerably. "We have a lot of golf next year. We're looking to lay in a solid base," he said, listing deals that have already been cut with Nissan, Combe Inc., Bank of America, Cingular and United Parcel Service.

With a strong roster of tournaments early in the year, Casarico anticipates USA will get its fair share of what figures to be stronger spending from equipment manufacturers, who have been tripped up of late by changes in specifications and standards.

Mark Lazarus, president of Turner Sports and Turner Entertainment Group sales and marketing, said the addition of The British Open, gives TNT "a highly visible, specialized position in the golf marketplace."

To that end, Lazarus said TNT is peddling deals combining its majors, The British Open and PGA Championship, and packages cutting across all of its properties. Lazarus said TNT will also work closely with the organizers of its events to mine opportunities with their respective sponsor groups.

On the Senior PGA side, title sponsorships do play a key role because those deals include inventory commitments, according to Golf Channel president Dave Manougian. He said Golf is keeping a close eye on those developments.

Overall, Manougian said Golf as a niche service, and one that has the highest audience concentration of households with incomes of $75,000 or more, has not been hit that hard by the advertising slowdown of the past two years.

"When times get tough and companies are reassessing their budgets, they want as little waste as possible. For the makers of luxury automobiles and high-end time pieces and companies talking about investment options, Golf Channel remains a very strong vehicle," he said.

Similarly, CNBC Ventures general manager Bob Myers said the Senior PGA Tour, despite the troubled economy, has still worked well from an advertising perspective for the business network.

"As we expected, selling advertising against the business demo has been totally compatible with many golf advertisers. We're not selling Titleist or the golf manufacturers, but it has worked with the financial services companies. And companies like to entertain with golf and executives want to be with the players during the pro-ams."

Looking ahead to 2003, Erhardt is relatively upbeat.

"Business-to-business, companies still want to reach the C-suite — the CFO, CEO and CIO and the high-end affluent consumer. Golf does that," said Erhardt, who ultimately anticipates a market that will be either flat or show moderate improvement from a year ago.