What Phil is wrong about PGA Tour media rights | Golf News and Tour Information
If one direct line can be drawn from Phil Mickelson’s criticism of the PGA Tour, it’s his challenge to the organization’s media rights. The tour, Mickelson claims, relies on a Scrooge McDuck-like pile of cash from broadcast deals and digital assets, money that Mickelson thinks belongs to tour voters.
“It’s not public knowledge, all that’s going on,” Mickelson told Golf Digest’s John Huggan earlier this month. “But the players don’t have access to their own media. If the tour wanted to end any threat [from Saudi or anywhere else], they could just return the media rights to the players. But they’d rather throw $25 million here and $40 million there than return the roughly $20 billion worth of digital assets they control. Or give up access to the more than $50 million they earn every year on their own media channel. … There are many problems, but this is one of the most important. Mickelson also claimed that the tour charged him $1 million every time he wanted to appear on “The Match” series, claiming that the tour’s “odious greed” forced him to look elsewhere.
The remarks were, to put it lightly, bombastic. And Mickelson shared similar complaints with the Fire Pit Collective in an interview published this week. The problem – well, one of the problems – is Mickelson’s inability to grasp a basic understanding of how media rights work.
Mickelson isn’t entirely wrong; players have no ownership of the tour media rights. But no athlete competing in a major professional sports league does. Major League Baseball, the National Football League, and the National Basketball Association aren’t perfect analogues of the PGA Tour; in these sports, a player is an employee of a team under a guaranteed contract. Part of this contract states that the team owns everything the player does on the field and everything that goes on their uniforms (except shoes). This includes media rights.
Golfers, on the other hand, are independent contractors with no guaranteed contracts. Unlike other athletes, they can monetize their uniforms. Yet, as members of the tour, they cede all of their media rights to the organization, giving the tour an aggregated set of intellectual property. It is this bundle that allows the PGA Tour to sell media rights to distributors. For example, if the media rights to the tour were fragmented – for example, if CBS Sports did not have exclusive rights to broadcast this weekend’s Genesis Invitational and players could individually sell their live broadcast rights and archived – TV deals would be worthless.
And these deals are worth a tonne. In March 2020, the tour finalized a new nine-year media rights agreement with CBS Sports, NBC Sports, and ESPN which took effect in 2022 and will pay the tour $7 billion over that period. Mickelson, in a September podcast with Gary Williams, complained that only 26% of that revenue went to players. In fact, according to a memo from PGA Tour commissioner Jay Monahan to players last November, 55% of revenue goes back to players in the form of prize money, bonus programs and other perks. That 55% is what NBA and NFL players receive from their respective leagues (MLB is currently in a labor dispute).
While it’s easy to correlate the increases in the purse and the FedEx Cup prize this year in response to the threat from the Saudi golf league, Monahan said that, dating back to 2020, the increases are the result of this new media agreement. , allow for new bonus pools and the creation of PIP initiatives.) In fact, due to the nature of the operation of the PGA Tour – it is listed as a 501(c)(6) non-profit organization – the tour is obliged to return the money to the players, while allowing to pay the expenses of the company and also to accumulate a reasonable reserve of funds.
As the figure of $7 billion over a nine-year period shows, Mickelson’s $20 billion claim is outlandish. However, there are more than live rights at stake. The tour also has the highlights and a treasure chest of archived assets. The tour is able to generate revenue from these rights, primarily by selling them with advertising or sponsorship for video on digital platforms. But, as Monahan explained, whatever is made from this venture again gets pumped back into the players pot, distributed as prize money or bonus pools.
Tour players have certain rights to their own media footage. Over the past decade the tour has become more liberal with how players can use video on their social feeds, having the ability to contact the tour to deliver highlights to Twitter, Instagram, Facebook to grow their brands and their fan bases as long as they do. Don’t use a sponsorship or publicity pre-roll before these highlights. The tour has actually increased its internal player content staff to help meet these growing demands. Additionally, players are also permitted, with certain restrictions, to have their own teams film them at tournament sites, including tournament rounds. A recent example is the viral video of Scott Stallings’ daughter cheering on her dad at the Farmers Insurance Open, as the clip was not produced by the tour but by Stallings’ team.
Again, players are prohibited from selling their media rights for commercial purposes, but this is consistent across all professional sports leagues in the United States. As for Mickelson’s complaint that he had to pay $1 million every time he was involved in ‘The Match’ exhibition series – a deal that falls within the purview of being a PGA Tour member – that’s not the case. is not entirely true either. Multiple sources confirmed to Golf Digest that Turner Sports, which aired all five iterations of “The Match,” paid the $1 million fee, and not Mickelson personally. Mickelson has also earned millions from the franchise, with $9 million alone coming from his first battle against Tiger Woods in 2018.
That’s not to say the PGA Tour media rights are perfect. The way fans consume sports is constantly changing, and so is the digital marketplace. Historic changes to NIL legislation at the amateur level could stimulate more individual rights in the professional arena. Woods himself addressed the issue earlier this week during a speech at the Genesis Invitational.
“Media rights are a big thing,” Woods said Wednesday. “A lot of us are wondering what the direction is, where we’re going and how can we have more control over that. There’s been a lot of talk, whether it’s from the PAC or the board or the players internally. Everyone has their opinion on this, but we have to make a collective decision. Jay has considered everything to try to determine what is best for each individual player because we are all independent contractors, but what’s best for the tour as trying to put it all together expecting to continue to grow the tour at the same time and all the different media rights that have come up over the last 10 years whether this either streaming, which didn’t exist, where are you going on that, where is the tour going, who owns those rights, how many do you share, where does it go.”
“Yes, there are give-and-takes, okay?” Woods continued. “We just have to find a balance between what’s best for the players and what’s best for the brand.”
But when it comes to the specific criticism of Mickelson, the argument is weighted with exaggerations and lacks validity.