5 challenges LIV Golf faces in the fight for TV rights
Sports leagues exist, fundamentally, to make money. And any league with the hope of eventually making money has at least one common thread: a TV deal.
For professional sports, no source of revenue is as profitable or as vital as media rights – agreements in which leagues bundle the “right” to broadcast their events exclusively on networks and, more recently, on online streamers. exchange of large sums of money. PGA Tour media rights deals represent approximately 41% of the league’s annual revenue. For other leagues, the percentage is even higher. Today, with ever larger sums being doled out to leagues around the world, media rights are expected to gobble up an ever larger slice of the revenue pie.
It’s not hard to see why media rights are an essential piece of the puzzle for LIV Golf. LIV aspires to be a major sports league, and media rights is one area where it is clearly not like most major sports leagues.
Currently, the upstart league does not have a media rights partner. Its events are available for free and ad-free on YouTube, among other free options. Barring a sudden change before the final event of its inaugural season in Miami, LIV will have staged an entire competitive season without earning a penny for its media rights, while shelling out millions for a broadcast crew to host each of the events.
LIV, of course, would like to see this change. He has been engaged in negotiations with potential partners since the start of the summer, and representatives from FOX Sports, CBS, NBC, Amazon and AppleTV have all reportedly been approached about their interest. But the list of solutions is not as straightforward as Saudi Golf Federation CEO Majed Al Sourer suggested to The New Yorker.
“If it was up to me, I’d do it in-house,” he said, apparently envisioning an NFL Network-like setup.
As the league moves closer to winter, the list of potential suitors dwindles, while the list of concerns surrounding the league only grows longer. Below are five issues the Hot Mic is hearing about New League’s pursuit of a TV partner.
1. Ratings are down from previous LIV events.
Ratings prognosis is an issue usually reserved for those with advertisers they are afraid of disappointing, but for LIV Golf it is actually more important than that. Ratings for the upstart tour have dropped significantly since relatively stronger performances at LIV Boston, Chicago and Bedminster.
After attracting audiences of over 600,000 viewers for the final rounds of these three events, LIV’s two international events (in Bangkok and Jeddah) struggled to reach 300,000 viewers, recording declines of over 50% compared to the peak of summer. At LIV Bangkok, things were worse in terms of average audience, which was one-third the size of LIV Chicago and one-fifth the size of LIV Boston.
Of course, it should be noted that LIV Bangkok was played in the dead of night for many Americans, while LIV Jeddah was played in the early hours. Still, these drops suggest that YouTube viewers — many of whom are likely Americans — aren’t following the league as it moves to different time zones; a concern for broadcast partners who will find themselves at the mercy of LIV’s tournament schedule.
2. The ratings are down from the PGA Tour.
Even if LIV’s ratings had remained stable, they would still face an uphill battle competing with the PGA Tour, which has leveraged its partnerships with a trio of network partners (CBS, NBC and ESPN) to position itself at the top of the golf public. hierarchy.
According to documents obtained by GOLF, coverage of LIV’s final round has routinely struggled to reach half of the average PGA Tour third-round audience of 1.8 million viewers, while coverage of the international stages of the league struggled to reach a fifth of the Tour average. .
A silver lining for LIV: There has been viewership growth in each of its last three US starts, suggesting the league is moving in the right direction among US viewers. Still, you can bet TV executives will be watching the league’s performance closely at next week’s season finale in Miami.
3. The advertisers aren’t there.
Rights agreements are, in truth, a symbiotic relationship. The sport brings in guaranteed ratings, which allows networks to bring in guaranteed ad revenue, which in turn allows leagues to collect guaranteed paychecks for their rights. This relationship has become increasingly important as viewership trends have become more sporadic in the age of streaming.
The perceived value of LIV to a network is directly related to the network’s ability to sell sufficient advertising inventory on LIV’s broadcasts, i.e. the ability of a network to make money league broadcast. To date, LIV has struggled to attract enough interest from advertisers and golf sponsors to justify the cost of a rights deal.
One potential avenue for upstarts would be to adopt a deal structure similar to that of the PGA Tour, which pre-sells advertisements to tournament sponsors on behalf of its network partners. Nevertheless, it remains to be seen whether LIV has the proper interest to absorb the risk of selling the advertising space itself.
4. Networks have busy schedules.
The proliferation of broadcast technology helped LIV bring its product to fans without a TV contract, but it also achieved an extraordinary burn rate. LIV has spent millions bringing on-air talent for its high-tech shows, and millions more assembling the crew and equipment needed to run those shows each week. Still, if there’s one advantage to a DIY show, it’s that LIV can dictate the time, content, and availability of its product.
LIV’s limited options to sign with a broadcast partner (CBS, NBC, ESPN and Turner all face conflicts of interest with the PGA Tour, leaving only FOX and some streamers) mean he could be forced to grant airtime to other network television obligations.
Take FOX for example, where golf week reported that LIV was close to reaching a deal that would pay the network in exchange for airtime (LIV has since denied this report). As of the fall alone, the network has outstanding obligations with the NFL, college football, Major League Baseball, NASCAR, the World Cup and college basketball. There simply aren’t enough hours in many weekends to allow LIV its required five hours of broadcast time.
5. LIV’s image is controversial.
Most sports leagues are not funded by the Saudi Public Investment Fund (or PIF) – a half-trillion-dollar fund owned by the Kingdom of Saudi Arabia and controlled directly by the Crown Prince, Mohammed Bin Salman. Kingdom money has allowed LIV to mount an unprecedented charge into the golf space, delivering huge gains in the space of just a few months, but that also comes at a price. Saudi Arabia’s questionable human rights record and uncertain motives have turned LIV into a political lightning rod, one that has only grown in size as the league has grown closer to Donald Trump.
This, as most people who understand LIV’s predicament seem to agree, is a particular source of irony. LIV wouldn’t be where it is today without the crown prince’s money, but the idea of signing a fully Saudi-owned and operated league has completely turned off some potential partners (Amazon and AppleTV among them) .
Could these entanglements prevent LIV from finding any partner? It’s unlikely. But when it comes to closing a deal, LIV could see itself with an uphill battle towards that first fundamental goal: making money.