Golf On TV In 2016 And The Rights Fee Bubble That Hit ESPN?

Ron Sirak in a Golf World story this week says 2016 may be one of the more intriguing for golf on television, and I would contend there's still more news/change/intrigue yet to come. But even on the news we already have, fans should expect some refreshed telecasts, no shortage of viewing options between networks, cable and streaming, and maybe even more innovation.

Yet as this progress plays out, there is the looming bubble that seems determined to burst as networks of all kinds have overpaid for rights, especially ESPN, which shed The Open and is widely criticized by anonymous current and former staffers for overpaying.

John Ourand reports for Sports Business Journal (thanks reader Don) on what some are saying has led the Worldwide Leader to make big staff cuts despite delivering huge profits over the last decade for Disney.

Many past and present employees place most of the blame for the layoffs on the company’s huge NFL, MLB and NBA rights deals. The most frequent criticism heard last week dealt with the NFL contract, which is worth a whopping $1.9 billion per year — $800 million more than the NFL’s next biggest deal. Second-guessers believe ESPN had the leverage to cut a better deal and question whether another media company was within $500 million of ESPN’s offer. There aren’t many other networks that could afford to pay close to $2 billion per year for the NFL’s least competitive package.

“It’s been a total mismanagement of rights fees, starting with the NFL renewal,” said one former employee. “We overpaid significantly when it did not need to be that way, and it set the template to overpay for MLB and the NBA.”

ESPN doubled its annual payment for MLB to an average $700 million per year — a deal that gives ESPN just one playoff game per year. And next year, ESPN’s NBA deal takes effect. That’s the one that will see its average annual payout triple in cost to an average of $1.4 billion per year.