Ron SirakAugust 10, 2013

Behind Fox's Big Move

How Fox landed the U.S. Open, and what it means for golf

The USGA's move to Fox on the eve of the PGA Championship caused a major stir.

The USGA's move to Fox on the eve of the PGA Championship caused a major stir.

The mood among USGA officials at the party in the posh Hamptons summer home during the U.S. Women's Open at Sebonack on New York's Long Island in late June was ebullient. The presentation to the governing body for a new broadcasting contract in New York City earlier that day by NBC/Golf Channel had been, by all accounts, a home run, capped with a surprise appearance by Arnold Palmer, who stressed how important he felt it was for golf that NBC and Golf Channel expand its TV coverage of USGA events.

The money on the table was more than double the current $37 million a year combined package by NBC and ESPN and the promise was that the big three USGA events -- the U.S. Open, U.S. Women's Open and U.S. Senior Open -- would get more than 140 hours of TV exposure.

In Tommy Roy, NBC has the most-respected producer in golf; in Johnny Miller the most talked-about commentator. And the two Comcast-owned properties provide the twin exposure of a national network with brand equity established through nearly 90 years in broadcasting and a cable outlet that is the only station dedicated solely to covering golf.

This seemed like a no-brainer. Still, when the 60-day exclusive negotiating period ended Aug. 1, the USGA told NBC/Golf Channel it was going to listen to other offers. What NBC/Golf Channel didn't know is that contact between FOX and the USGA -- although not real negotiations, the USGA says  -- had already been initiated.

In less than a week, at 6:32 p.m. ET on Aug. 7, the eve of the PGA Championship, an email from the USGA began dinging into inboxes announcing a "comprehensive multi-media agreement that makes the FOX network and FOX Sports 1 the principal domestic media partner of the USGA" for 12 years beginning in 2015.

While NBC/Golf Channel did not want to comment on the failed negotiations, sources familiar with the situation say the move ending NBC's 20-year business relationship with the USGA stunned executives at all levels. Sarah Hirschland, senior managing director for business affairs at the USGA says: "The Board made its decision on Wednesday morning and our president [Glenn Nager] informed NBC sometime Wednesday." The email press release went out later that day.

While terms of the deal were not made public, sources indicated to Golf World it was for $1.2 billion over the length of the contract, or about $20 million a year more than the NBC/Golf Channel offer.

"Financials are absolutely important but that was not the only factor," says Hirchland, neither confirming nor denying the $1.2 billion figure. "TV money is our largest revenue stream. We had very good choices."

The windfall from the FOX deal fattens what some in the USGA privately refer to as the war chest that might be needed if the governing body is sued in disputes over rules, especially equipment regulations. There have already been threats of legal action regarding the ban on the anchored putting stroke.

Another detail that remains vague in the negotiations involves whether or not NBC/Golf Channel was given an opportunity to match or beat the FOX figure, with multiple sources saying NBC/Golf Channel did not know it had lost the deal until receiving that email. Those sources said that while NBC/Golf Channel may not have been able to match the FOX money, they were willing to sweeten the offer on the table.

"We're looking forward to FOX Sports becoming home to the preeminent golf championship in the world," said FOX Sports Co-President and COO Eric Shanks. "We're committed to elevating coverage of USGA events on every level, infusing them with a new energy and innovation that will make every championship the best golf event on television."

For FOX, whose FOX Sports 1 joins NBC Sports Network (NBCSN) in challenging ESPN's dominance as a sports-only broadcaster, the expensive contract gives it a ton of golf content -- the USGA runs 14 national championships plus the Walker Cup and Curtis Cup.

The USGA gets a lot of money -- some cynically called it a cash-grab pure and simple -- and, it hopes, a broader audience and perhaps some fresh thinking in how to package golf on TV. The question is what does the golf fan get? The answer to that will only be known once FOX starts showing golf.

"First, we get the opportunity to expand our exposure and tell our story to a broader audience," says Hirchland. "We also get the opportunity to create some distinctiveness about the role we play in the game through ancillary programming like previews of major events, wrap-ups of lesser events and documentaries that use our archival material."

FOX made an effort to get involved in golf in 1994 when it offered to partner with Greg Norman to create a world tour that it would televise. Norman proposed in November of that year eight limited-field events with $3 million purses underwritten by what he said was a $112 million contract with FOX. PGA Tour commissioner Tim Finchem threatened to suspend any players who participated and twisted arms behind the scenes with some of his stars and effectively killed the project, as well as his relationship with Norman. Now it appears Norman may surface as a commentator on the FOX golf broadcasts.

For now, FOX seems to have a seat at a table with little immediately available on the menu. The PGA Tour contracts with CBS, NBC and Golf Channel run through 2021. ESPN has the British Open through 2017 and CBS owns rights to the PGA Championship through 2019. But the Ryder Cup, the PGA-run event on NBC, is up for grabs after next year's competition. CBS and ESPN have the Masters on one-year deals and Augusta National seems very happy with that arrangement and those partners.

"It started in the spring when we sat down and thought about our perfect situation," Hirchland says when asked at what point FOX got on  the USGA's radar screen. "Prior to June 1, FOX said, 'We will respect your window, but if you want to talk we will be interested.'" 

The timing of the announcement by the USGA caused almost as much surprise as the choice of FOX as a broadcast partner. Those with a grassy knoll bent to their thinking thought that releasing the news on the eve of the PGA Championship was a shot at the public opposition by PGA of America president Ted Bishop to the USGA/R&A ban on the anchored putting stroke.

The USGA says it was better to make the announcement before the PGA than to have it leak out during the event. More than a few observers, noting that the right's holders control the timing of such announcements, viewed that with arched eyebrows.

"The timing of our announcement was consistent with good organizational practice, a commitment to transparency, and involved a national governance organization and several large media companies whose stocks are traded publicly and applicable to disclosure laws and requirements," USGA spokesman Joe Goode said in a statement.

"The USGA and FOX Sports Media Group promptly made public our agreement, just as we made other applicable news throughout the day public," Goode said. "It would not have been proper, nor realistic, to withhold this news from the public in these circumstances."

Will bringing fresh eyes into the game help jazz up broadcasting? We shall see what we shall see. FOX has not been shy about experimenting and its FOX Box -- which shows score, down and yardage in football and score, pitch count and base runners in baseball -- has been universally imitated.

However, it has gone over the top at times.

The website AwfulAnnouncing.com calls the FOX Box the best sports broadcasting innovation, but also ranks the Glow Puck it brought to NHL coverage the worst. Some have the nightmarish image of the opening to the U.S. Open being that NFL robot FOX uses swinging a golf club.

The USGA says it will have a say when it comes to talent, both in front of the camera and behind it, although it's unclear if it was consulted on Norman. "It is an opportunity to start with a blank slate and build from there," says Hirchland. "The production of golf is complex. There is a need there for some experience. But it is chance to bring in someone with new ideas and a fresh approach to golf programming."

Private talks with network executives already involved in golf broadcasting reveals an appetite for outside-the-box thinking. Some express a frustration with the sameness of 72-hole stroke-play events week after week. Those with such frustration talk about innovations like mixed team competitions or men and women playing the same venue on the same week from different tees producing two winners.

But ideas such as that demand the cooperation of the PGA Tour, LPGA and other governing bodies. Perhaps the way to shake up the coverage is to bring innovation to the way it is covered.

One concern for the USGA could be how long it will take audiences to become familiar with FOX Sports 1 and know where to find it in the myriad of cable channels. While the U.S. Open will certainly get weekend exposure on FOX, the Women's Open and the Senior Open could well end up on FOX Sports 1. When the PGA Tour sold the TV rights to the Champions Tour to CNBC a while back, it almost killed the senior circuit. It was on a network no one could find at a time no one wanted golf. Audiences know to look to Golf Channel for golf coverage.

While those fearing FOX will disregard the game's traditions are reacting way too prematurely to a product they have yet to see, the claim by the USGA that this will expand the audience for golf also amounts to counting chickens before they are hatched. Ratings for golf aren't tied to networks as much as they are to events, with the Masters leading the way.

The 70 hours of coverage FOX says it will give the USGA's big three events is half that of what NBC/Golf Channel promised, so the net exposure is reduced. The only known quantity in all of this is the bottom line. And for now it seems as if the USGA has 20 million reasons a year to make the move from NBC to FOX.