PGA Tour, NBC, CBS Ink Nine Year Deal

The PGA Tour, CBS and NBC have reached an agreement on a nine year deal. No numbers have been revealed, but its believed to represent an increase over the current five year, 3 billion dollar deal. Interestingly, Tiger—or the lack thereof—may not have been a factor:

The tour was able to pull off a blockbuster deal despite the on-again-off-again presence of Tiger Woods, the former No. 1-ranked golfer who — despite scandal, injury and a two-year winless streak — remains its No. 1 draw.

But Woods, who was given the credit for being the reason that the tour signed a record TV deal in 2001 and was blamed for network reluctance to measurably improve that agreement in 2007 when the current four-year deal was completed, was not a major factor in these negotiations, McManus said.

“We didn’t assume in our business plan the kind of spikes that we had gotten in the past from Tiger,” McManus said. “If that happens in the future, great. I do think there’s some real upside there with the many young guns competing with the traditional stars, whether it’s Keegan Bradley or Rickie Fowler or Dustin Johnson. You can go down the list, Rory McIlroy, Adam Scott, Luke Donald, there’s a dozen of them, any of whom can catch on.

“There’s upside there, but going forward the business model is not dependent on Tiger-like ratings in the future. If that were to happen, it would be great for the tour, and be great for CBS.”

Here’s the GolfBlogger’s analysis: It’s never been about Tiger Woods—although many (including perhaps the networks and the Tour) were under that illusion. The rise of Tiger was coincidental—not causal. The driving force in the television contract (and the size of purses) is the new media’s need for 24/7 programming. Where once there were three networks, now there are hundreds—not to mention the growing opportunities for online programming. Every one of these outlets needs to fill air time. The PGA Tour offers a quality product, with (probably) relatively inexpensive production costs and superior demographics. If NBC or CBS didn’t step up and offer an acceptable contract, surely one of the cable/satellite networks would.

As I noted in an analysis a couple of years ago, NASCAR and NCAA Basketball revenues rose even faster than the Tour’s during the Tiger Woods era. Other major sports also experienced a steep increase. It’s about the demand for programming, not an individual player. NBC and CBS locking the Tour into a long-term contract—with or without Tiger—is evidence of my thesis that it’s always been about competition for programming.

More here.