The All Spin Zone
/Commissioner, please, you have the floor.
In regard to the strategic partnership, we are excited about our relationship with Comcast and the resources Comcast has committed to put behind this partnership. We are delighted with this long-term relationship with the Golf Channel and the ability to bring the continuity to our early rounds, which we think helps our platform.
Platform is back and back big. All is right with the world. Savor it, only six more platforms to go...
Number one is that we have a streamlined set of relationships with NBC and CBS having all the weekends. It really relaxes and reinforces the continuity we can now provide to our fans.
Right, because having ABC and ESPN would have messed up that continuity for us fans and created a general state of unrelaxation.
On the cable side with our Thursday and Friday coverage every week of the year with the Golf Channel, it really changes the dynamic of being able to set up our weekend coverage with the combination of our cable coverage leading into our network coverage.
And that is different in what way?
In addition to those things, on the cable side, I think I should point out that the Champions Tour and Nationwide Tour programming have been extended coterminously to a 15-year arrangement with The Golf Channel, as well. So in a nutshell, that's our programming situation, and we are very excited about the way it came out.
Oh yes, it's a word! Coterminous is a variant of conterminous. Link it if you don't believe me (and I know you don't...Microsoft Word sure did not think it was a word).
On the financial side, I would say, first of all, preliminarily, we do not and have not in the past released specific rights fee information with respect to our television arrangements. It has been the case four years ago and eight years ago, and that's just the way we do it.
No, instead, we selectively leak a ballpark figure to writers and players.
However, there are four different ways that we think are important to look at how the overall financial structure of these arrangements will impact the Tour going forward. Four different metrics.
Metrics! Tim has been reading his Forbes.
One is more of a general metric, which is that we think the streamlined presence of our television in providing the continuity it does will benefit all constituents and will deliver more value to our sponsors. In delivering that value to our sponsors, it will have eventually an impact on the overall financial performance of the Tour, and importantly to our tournaments, and I'll come back to that in a minute.
Can't wait. Love the streamlined presence thing. On the CNN news crawl tonight they describe it as "relegated to The Golf Channel." That liberal bias again!
The second thing we looked at is how we can grow financial benefits to the players. We are now comfortable in projecting, because of these agreements and the rest of our businesses, that if we go out and look the next six years, 2007 to 2012, we can project approximately a $600 million increase over that period in player benefits, including prize money and retirement plan contributions. That would equate to a 35 percent increase over the current six years.
Thirdly, I think we can now say with reasonable certainty that we can reach the second billion dollar level in the eight-to nine-year period. It took us 67 years working with our tournaments to get to the first billion, which we passed in 2005, and with our financial future intact and the kind of sponsorship we're attracting, we are now comfortable in saying that in that 2013 period, we should be able to hit the second billion dollar level.
What happened to the fourth metric? Maybe that's the individual tournaments absorbing the blow of going from 62% of the purse subsidized to 50%?
At this point Dick Ebersol chimed in and managed to return normalcy by speaking like a non-MBA'd type. Then Sean McManus spun the benifts of a two-network, Golf Channel thing and reiterated the whole streamlining the marketplace thing. Finally, David Manougian talked about The Golf Channel's glee and its (stunning) 15 year deal. 15 years!
And then, the Ponte Vedra Over-40 softball league broke out.
AT&T's operator butchered the name of just about every writer calling in, creating the only true entertainment in this event. Ah, the first question from Richard Sandomir of the New York Times was good.
Q. Tim, can you discuss a little bit of -- was there a bit of scrambling when ESPN pulled out, and how did that affect your negotiations with the Golf Channel?
COMMISSIONER TIM FINCHEM: Well, I don't think anybody pulled out of negotiations. We negotiated intensively with lots of different people. The complexion of negotiations at this level takes on different twists and turns, as has every one we've ever done. I wouldn't say there were any more or less twists and turns in this one than others.
Riiiiiiiiiiiiiiiiiiigggggggggggggggggggggghhhhhhhhhhhhhhhhhttttttttttttttttttttttttttt!
Where we came to the Golf Channel was that we had already determined going in that The Golf Channel was a candidate for some of our premier programming. I don't think we would have said that five years ago, given their distribution levels, but with the Champions Tour, Nationwide Tour and the commitment of Comcast, they've really built their distribution, and their distribution is headed north with or without our programming. But when we add the kinds of programming that we have in this relationship now with the best players in the world playing on a fairly consistent basis on The Golf Channel, it just creates a whole other dynamic in terms of the quality of their platform.
And the distribution levels of this strengthened platform will be conterminous for 15 years. 15 years!
When we started to focus on that possibility beyond just a portion of the programming to the notion that if we could create a continuity for our viewers, one of the problems we've had over the years is generating value for our sponsors on the early round side because it's been piecemeal, and at the same time providing continuity to our fans to be comfortable with where we are. Both of those things were solved by the combination of things that David and his people have brought to the table to provide very serious commitment to the programming side of our early rounds, and you add that to the four-round commitment that we've made and we see that platform being elevated to a point where it can generate very significant numbers.
If you have any idea what that all means, you are one bright person. Or you're David Manougian.
Q. I have two questions: Are there not markets that the Golf Channel doesn't reach right now, one; and secondly, for a tournament like Sony or even Bob Hope, if you negotiate with the title sponsor out four years, do you now have to go back and renegotiate if they thought they were going to be on a network or ESPN and are now going to be on The Golf Channel?
COMMISSIONER TIM FINCHEM: The answer to the first question is there are pockets, and maybe David is better to follow up and give more detail. But The Golf Channel has pockets around the country with a distribution of approximately 70 million right now where they don't reach. We're well aware of that. We're partners with The Golf Channel on Champions Tour and Nationwide Tour programming. Those pockets are slowly but surely disappearing, and we are very comfortable with the projected growth pattern of distribution. And I would say this, the overlay throughout the country of reaching our fan base is very, very powerful. So we don't have any hesitation there.
On the second question, I would say that we have, as I think you know, very strong sponsor structure today. We have been 100 percent sponsored throughout the last five years during a recession, during the post-9/11 environment, during a very difficult time in the television marketplace. We were 100 percent sponsored. We see no difficulty in maintaining sponsorships, and I think the continuity in our sponsorship base will continue.
Coming to a bookstore in 2007: The Non-Answer Answer, by Tim Finchem.
Q. Can you say what the increases are in terms of the actual rights fees?
COMMISSIONER TIM FINCHEM: No, I've already answered that question. We don't release detailed rights fee information. We've never done it before and we're not going to do it this year.
DICK EBERSOL: By my math right now, four different questions have tried to get you to tell them what the actual television rights fees are, and I just want to cheer you on, don't tell them.
Now guys, you were happy to tell us how much more the players will be making over the six years, why don't we get to know how much the Tour is skimming bringing in for charity?
Q. I was just wondering, you mentioned the deal with The Golf Channel provides viewer continuity. But aside from that, is there any advantage for having such a long deal? And then secondly, does your deal also provide an opportunity for some events to migrate to the OLN later on?
COMMISSIONER TIM FINCHEM: Let's see, the first part of your question is there's a range of benefits in our new arrangement with David. There is very significant differentiation in the programming flexibility of The Golf Channel. To put the best programming, the programming that can generate the most interest effectively in front of the fan base at times when they can see it. The Golf Channel is a 24/7 service, it can show our stuff at night, it can show stuff in prime time, it can replay at night, it can do all those things. It can generate more value for our sponsors and more total viewership, which total viewership is a very important thing in our business, in our sport, much more I think than other sports. We look at how many viewers we reached total through the course of a tournament. That's what our sponsors look at. As a consequence we're less driven by average ratings in any particular day part. So those things, The Golf Channel brings a lot.
See, it's not about the ratings. Just ask Nascar. And this Sportscenter, ESPN stuff, they just don't have total viewership platforming capabilities like Golf Channel.
In terms of a long-term arrangement, it's a combination of looking at the current strength of the platform, the strength of the platform that we foresee in this partnership with our programming and their capabilities in the next three, four, five years, and then the reason for 15 years is that it sets the table for us to put our position in -- to protect our position in the long-term as the television marketplace continues to evolve. So for all those reasons, we thought long-term strategic partnership was very important, and there are elements on the partnership side that we're excited about in terms of our two companies working closely together, as we will on the network side with CBS and NBC. What was the second part of your question?
Oh don't worry about it. We just filled our platform quota here.
