Phil Mickelson addressed LIV Golf’s TV future.
Getty Photos
Welcome again to a different prolonged version of the Scorching Mic E-newsletter, GOLF’s weekly ship masking all issues golf media from me, James Colgan. The subject of this week’s publication is Phil Mickelson’s feedback about LIV’s TV rights negotiations. As at all times, in the event you’d prefer to be the primary to obtain unique insights like these straight from me, click on the hyperlink right here to subscribe to our free publication ship. However first, we return to Troon, the place one thing is … brewing.
After two quick years and some too many bleak rankings reviews, LIV Golf and the CW are making ready to vary the channel.
That’s the newest in response to LIV star Phil Mickelson, who let slip throughout a press convention previewing the league’s championship in Chicago that the league has its sights set in a brand new broadcast route for 2025 and past.
“Nicely, tv and viewership for sports activities, particularly golf, is altering. So the old-school media and means that we’ve performed it, which is be on a community and so forth, will not be the best way of the long run. It’s going to be extra digital, extra streaming,” Mickelson mentioned on Wednesday, talking concerning the league’s present settlement with community TV companion the CW. “Our new companion, as a result of our new companion, whoever that’s after this 12 months, I believe goes to be extra centered and centric there due to the alternatives that may open up. However I’m not a part of these tv contracts.”
Sources at LIV confirmed the league is “exploring partnership alternatives” with present and new broadcast companions within the U.S. and overseas, because it has performed in every of the final a number of offseasons.
Mickelson, although, indicated the league may look to maneuver away from linear TV rights altogether. That may be, to place it calmly, a radical shift within the fashionable sports activities media economic system.
“I do know they’re in the course of negotiating viewership relationships and partnerships going for subsequent 12 months,” Mickelson mentioned. “I’m not part of that, so I don’t actually have any nice perception for you. I simply know that the old-school mannequin will not be the place LIV Golf is headed. It’s not the place the long run goes, and we don’t wish to get caught in a rut.”
THE BASICS
LIV owns the rights to its broadcasts. It will possibly promote these rights to whomever it chooses, and usually it’s going to search a “rights price” in return. A rights price can vary from a number of million to some billion {dollars} per 12 months, relying upon the dimensions and reliability of your viewers, the dimensions and curiosity of your advertisers, and your whole variety of hours on the air.
LIV is at present partnered with the CW, although that deal initially included a income share as an alternative of a rights price. It’s anticipated to run out on the finish of the 2024 season. Till Mickelson’s feedback earlier this week, no one from LIV had commented publicly concerning the league’s broadcast rights heading into the long run.
THE BACKSTORY
LIV and the CW inked a media rights settlement in early 2023 after a prolonged negotiation interval that did not yield the league a sports activities media companion with a observe document in sports activities. On the time, the settlement was seen as a bridge deal for each side: an opportunity for LIV to point out off its ad-generating chops after a season of broadcasting on YouTube to the “large fish” of sports activities TV, and a chance for a transitioning community just like the CW to enter the sports activities area with an enormous splash. The deal was broadly reported as a two-year tryout, however it’s unknown if the contract included escalators in time period or worth based mostly on the league’s efficiency, as another sports activities rights agreements do.
The 2 seasons that adopted had been attempting for each LIV and the community, a interval highlighted by ghastly TV rankings and curious squabbles with the CW’s programming division over the community’s resolution to pivot away from LIV telecasts. Editorially, LIV’s telecasts have regarded simply superb (the league controls TV manufacturing), however each side’ perceived weaknesses in establishing and retaining a sports activities viewers have come to fruition. Current telecasts have been watched by fewer than 200,000 common viewers, in response to Nielsen, extra according to cable information than broadcast sports activities tv.
THE LANDSCAPE
The sports-media rights panorama modifications each quarter-hour, however it has undergone two tectonic shifts since LIV signed its settlement with the CW. These shifts had been the historic NFL and NBA rights offers, which promised leagues near $200 billion from rights-holders over the following decade. The agreements fortified the sports activities TV panorama within the long-term alongside clear traces: ESPN, NBC and Amazon have rights to each main leagues; big-time gamers like Netflix, CBS, YouTubeTV and Fox have rights to one of many leagues; and others like Warner Bros. Discovery and Apple, have the rights to neither.
Notably, that checklist of rights-holders now contains each networks and streamers for the primary time, a long-rumored shift to additional the transition from cable to streaming. On the similar time, new sports activities streamers like Venu — a three way partnership from Fox, Disney and Warner Bros. Discovery — have entered the fray hoping to select off items of the sports activities rights enterprise.
For LIV, aggressive change holds appreciable weight. The variety of sharks prepared to gobble up LIV’s rights has elevated, and the sharks who didn’t be a part of the feeding frenzy for NBA/NFL rights are ravenous for brand spanking new sports activities entities.
LIV may reenter the market hoping to succeed the place it failed again in ’23, hoping to select off one of many losers of the NFL/NBA rights for a modest enhance in rights charges and entry to a barely extra devoted sports activities viewers. The league may additionally take the strategy, as Phil recommended, of looking for a streaming-first companion. A streaming-only (or streaming-dominant) settlement may decide off a (comparatively) large rights price over the league’s CW deal, and would additional goal the league towards its supposed youthful viewers.
THE PROBLEM
LIV wants to point out any semblance of a worthwhile enterprise construction earlier than it may well land a deal value appreciable cash from a streamer or broadcast community. It has managed to seize large stars and some new sponsors, however with no dependable viewers and the sturdy promoting construction an viewers creates, it’s onerous to see any broadcast companion (streamer or in any other case) lining as much as signal a big-money deal. One other smaller, revenue-sharing deal is likely to be extra cheap, however the league would clearly favor to obtain a rights price for its broadcasts.
As for who is likely to be , Mickelson’s suggestion that linear TV is outdated information is barely half-true. The large cash in sports activities TV continues to be in linear, which is why each the NFL and NBA lined as much as signal huge, long-term offers with linear broadcast companions. There is likely to be cash and an enormous future in sports activities streaming, however we’re nonetheless distant from the tipping level that Mickelson recommended has already occurred. If LIV had been to signal with a streaming-only entity, each side can be taking an enormous threat.
THAT SAID…
Streaming does appear to be a way more cheap match for LIV’s broadcast ethos. LIV is obsessive about delivering a brand new viewers for golf, and it’s clear that group hasn’t adopted to the CW. On this batch of rights negotiations, touchdown a companion who can convey the league to a respectable viewers of sports activities followers is likely to be essentially the most worthwhile sticking level.
And if that features a rights price, too? Nicely, that’s simply gravy.
You’ll be able to attain the writer at james.colgan@golf.com.
