- Sky deal value at just over $2m per year
- Two-year hiatus saw BBC, Eleven Sports take coverage
- Discovery lurks as threat to Sky’s UK dominance
UK pay-television broadcaster Sky Sports’ new rights deal for the US PGA Championship is for the five-year period from 2019 to 2023, SportBusiness Media understands. This marks a rebuilding of the long-term partnership between rights-holder and broadcaster that ended in 2016 when Sky refused to meet rights distributor IMG’s valuation of the property.
Sky is paying just over $2m (€1.8m) per year over the deal term. It paid $5m per year in its previous 10-year agreement with the PGA Championship.
The broadcaster was in a strong negotiating position for the UK rights in its talks with the IMG agency, which holds the international rights to the PGA Championship. This was because of a lack of credible alternatives – neither rival pay-television operator BT Sport nor pan-European sports broadcaster Eurosport bid – and the poorly-received coverage of the event during Sky’s two-year hiatus.
UK public-service broadcaster the BBC broadcast the 2017 edition, alongside social media giants Twitter and Facebook. It is thought that the BBC did not pay a rights fee.
Eleven Sports showed the 2018 edition in the UK on its OTT platform. But that deal was never meant to be long term and was executed within the context of IMG’s partnership with Eleven Sports, which ended in January.
It is thought that PGA of America, the championship rights-holder, was unhappy with the coverage of its property in 2017 and 2018. It put pressure on IMG to re-establish the partnership with Sky.
IMG holds the US PGA Championships until 2021, but also acts as an adviser to PGA of America, which is why it was able to agree a deal term that extended past its own rights deal.
IMG did not hold a formal tender process for the UK rights.
Reassessing value
PGA of America had claimed at the time Sky first lost the rights that the decision was necessary to facilitate a new model for the event. But it is thought the actual reason was more prosaic: Sky and IMG were very far apart in their valuation of the property. SportBusiness Media also understands Sky only offered $250,000 per year for the rights ahead of the 2018 season.
Sky’s willingness to reconsider its valuation of the US PGA Championship in the 2019-23 deal may have been driven by two key factors: the change in Championship date; and a desire to reinforce its golf portfolio in response to the aggressive move into golf by US media group Discovery Communications.
From 2019, the tournament will move to May from its traditional August slot in the golfing calendar. This places it between the Masters (held in April) and the US Open (held in June). The PGA Championship is the smallest of the four golf majors, and it is thought that the date shift gives it a much stronger position in the calendar. The British Open will now take the PGA Championship’s place as the final major of the season.
Sky’s resumption of PGA Championship coverage also allows it to market itself as the only broadcaster in the UK that will be showing all four majors in 2019. It holds British Open rights until 2021 and has one year left on its US Open deal.
It is thought to hold a one-year rolling contract with Augusta National Golf Club for the US Masters. The BBC also holds US Masters rights, although these expire in 2019, with an option to renew for 2020.
GolfTV threat
Sky is also wary of the threat to its position in the UK golf market posed by the joint venture between the PGA Tour and pay-television broadcaster Discovery, which controls Eurosport.
The joint venture handles all PGA Tour broadcast rights outside the US until 2030. It launched its new GolfTV OTT streaming service in January, which it envisages will provide live PGA Tour coverage across various distribution channels and across multiple territories.
The new OTT platform allows the PGA Tour to commercialise rights to its own events on the expiry of current deals with broadcasters. Sky has an agreement to show the PGA Tour until 2021, after which, GolfTV will broadcast these events in the UK.
GolfTV will also carry European Tour events in selected territories after agreements reached last year with the rights-holder. But while Sky retains European Tour rights in the UK until 2022, which include the Ryder Cup, it will be concerned about possible competition from Discovery at the next rights round.
Under the circumstances, it is unsurprising that Sky has moved to shore up its position in the four majors to retain a grip on golf in the UK.