Crowning Tiger, Missing Michael - Will PGA hike its fees?

By Published on .

Most Popular
Tiger Woods' recent Masters golf victory and the accompanying big TV ratings on CBS are fueling already high expectations of increased TV rights fees for professional golf events-and nervousness among TV advertisers.

Viacom's CBS, General Electric Co.'s NBC and Walt Disney Co.'s ABC could each pay a 50% increase in their collective four-year-deals that currently total some $650 million for PGA Tour events.

Sports marketing analysts have been saying the total four-year deal could climb to $1 billion. And this was before Mr. Woods' recent Masters victory-his second since being a pro, and sixth major title overall-and the event's large TV ratings.

In the wake of declining sports ratings in virtually all sports, the PGA and other golf events have been among the few to see viewership increases. That could translate into big programming price increases for major TV golf advertisers.

PGA executives already have been vocal about financial increases.

"They are going to be charging Tiger-like pricing," said Chuck Bachrach, exec VP-national broadcast and programming for Rubin Postaer & Associates, Santa Monica, Calif. "Beginning at the top, the management of the PGA has little regard or respect for advertisers. They are going to stick it to the networks. The network[s] will overpay and they will overcharge the advertisers."

Rubin Postaer's client is American Honda Motor Co., a heavy TV buyer of golf events, as well as a title sponsor of the Honda Classic, which was held last month.

PGA executives didn't return phone calls by press time. CBS, NBC and ABC executives would not comment about upcoming negotiations.

Last year, CBS, which airs the most golf events of the broadcast networks, was up 10% to a Nielsen Media Research 3.8 rating/10 share vs. 1999 for its golf telecasts. For the first 11 events last year, it scored a 4.5 rating; that increased to 4.7 for the same number of events so far this year.

CBS's "The Masters" earned a Nielsen 13 rating/29 share on April 8's final round, up 30% from last year's 10/22. This year's final-round telecast easily made it into the week's top 10-rated programs.

A rating point is 1% of the 102.2 million U.S. TV households; a share point is 1% of households watching TV.

Other networks have seen improvement as well. ABC pulled in a 2.8 rating in 2000 over a 2.7 rating the year before. NBC was up slightly to a 3.1 rating in 2000. This year NBC is already 16% higher at a 3.6/9.

"There is some justification in the marketplace for PGA to insist on these increases, considering the MLB, NFL and Nascar [TV fee] increases," said Mike Trager, president of SFX Sports Group Television, a sports management unit of Clear Channel Communications. Mr. Trager notes PGA is in a good position because some sports-such as Major League Baseball and the National Football League-have seen ratings decreases.

Still, Mr. Trager and others note, the downside for the PGA comes from a slow advertising market. Networks executives will counter that the ad market is weak or unstable at best, and that they might not be able to pay the big increases the PGA wants. "You have to cross this [negotiation] with how the economy is doing," said Tim Spengler, exec VP-director of national broadcast for Interpublic Group of Cos.' Initiative Media North America, Los Angeles.

Because of the high price tag, network executives could angle for only those higher-rated events where Mr. Woods plays. Those ratings are typically double those of events where he doesn't play. Last year, for instance, all three networks pulled in a collective 4.1 rating/11 share in 18 telecasts where Mr. Woods played in vs. a 2.4/6 in 40 telecasts where he did not play or was not in contention.

In this article: