SBJ: PGA Tour Exploring All Leveraging Options!

Let's start with the bullet points on a very eye-opening Sports Business Journal story.

Because if you are interested in the short and long term future of pro golf on television, there is a lot to chew on and ponder. Also, we discussed all of this on the latest ShackHouse.

SBJ's John Lombardo & John Ourand report in a paywall protected story that the PGA Tour...

• Is exploring the creation of its own channel

• Is considering opting out of its current CBS/NBC contract for a new deal commencing in 2019

• Has gauged whether ESPN/Turner/Fox are interested in bidding on such a contract

• Is even floating ways to force a renegotiation of its locked-in, no opt-out deal with Golf Channel (through 2021) that would give them equity in the Comcast-owned channel or allow other networks to carry early-round coverage

Regarding the idea of starting a spinoff of PGA Tour Live--something you've seen me mention a few times as a possibility after the LPGA Tour partnership was announced--Ourand and Lombardo write:

With the opt-outs two years away — combined with the tour taking back its digital rights from Turner in 2013 — PGA Tour officials are studying whether the time is right for the tour to own a channel, either on cable or via an over-the-top service. Potentially, the tour could cut a new Golf Channel deal that gives it a stake in the network. This would follow the strategy Golf Channel parent NBC Sports Group has taken with its regional sports networks.

It also would be critical to the tour launching a channel before 2022. Content for the new channel almost certainly would need to include some rights under contract to Golf Channel through 2021. Without a Golf Channel buy-in, the tour would have to wait until that deal expires to gain access to those rights.

There is one hitch...

Any new cable channel likely would run into distribution problems, as well, given the market trends of cord cutting and cord shaving. The tour almost certainly would face an immediate challenge if it were to take rights away from Golf Channel and then try to persuade Golf Channel’s parent, Comcast, to carry the new tour channel. Comcast is the United States’ largest cable operator.

There is that!

So why would the PGA Tour do this now?

After all, it's a busy summer and fall in 2016 for golf. The rights fee bubble, if it has not burst, has dried up spending budgets. Fox and ESPN are cutting back.

Furthermore, things are going well for the PGA Tour. Considering their low ratings compared to other sports, they are still making good money for their players, their partners, and have mostly-happy sponsors.

Two things appear to be in play: the PGA Tour believes the rights fee bubble hasn't burst, and Tim Finchem wants to make one more big deal. He's been telegraphing this for months in press conferences and now it is clear what he wants to do: renegotiate the deals he made.

I ran into a few folks at The Players who are, as you might imagine, find all of this disconcerting. You see, they are very confident that Deputy Commish Jay Monahan is going to be an excellent commissioner, with people skills, business savvy, a love of sports and golf. He has the chance to be pro golfing version of Rob Manfred or Adam Silver, two commissioners who have (so far) delivered a little less of the weirdness and generational stubborness that their MLB and NBA predecessors brought to the job, with just enough of the wisdom handed down by the well-paid predecessor.

But this impending network TV opt-out means Monahan might not have the chance to fully shape the next TV deal and use his skills to re-imagine, where necessary, ways to improve the television "product" going forward.

There is a sense that retiring Commissioner Tim Finchem, who loves to make deals and is obviously quite good at it, is consumed with filling his coffers and solidifying the FedExCup/calendar-year model. He wants one more big bonus that will conveniently be voted on by a PGA Tour Policy Board he has stacked with lemmings. Shoot, he's even turned the PGA of America president, who holds a seat on the board for a little while longer, into a PGA Tour employee. So he's got the votes when it comes time to sell the board on the opt-out.

While I respect Finchem's ability to make money for his partners and coral corporate titans into writing big checks, what fascinates me at this point is the sense that the PGA Tour group is bitter that its partners are doing well. The opt-out seems driven by a desire to pursue more profit, which is very much their right, but as a fan, I don't know how many of these leveraging plays are really thinking of the best outcome for a healthier long-term PGA Tour. My sense is that this is more about Finchem's legacy and retirement savings than returning to the negotiating table with the goal of improving televised golf or securing the health of the tour over the long haul.

Because as we're already seeing with the USGA's Fox 12-year deal--where fewer hours than were promised are being delivered, production quality stunk and the promised brand-building, coolification of the USGA hasn't happened--securing the most amount of money and leaving a television partner less able to profit does not serve either side well over the long term.