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New TV deal may result in players pay cut

The adage, "What goes up must come down," is about to ring true when it comes to professional golf, especially when it comes to finances.

In the early days of pro golf, players competed for a pittance. In fact they weren't even allowed in clubhouses where they might hobnob with the genteel.

Then in the mid-1950s came something called televised golf, along with a couple of players named Arnold Palmer and Jack Nicklaus. Before long golf lost its "rich man's game" tag and it seemed that everyone was playing the sport or at least watching it on the tube.

Television knew what it had and from 1994 through 1998 the PGA Tour was $300 million richer by virtue of a five-year TV rights contract. But that was just the beginning. The following four-year contract netted twice that figure, a whopping $600 million. With a phenomenal player by the name of Tiger Woods as a sales chip during negotiations, it was apparent that the PGA Tour held all the aces.

With the current four-year pact for 2003 to 2006 calculated at $850 million, it now appears that the money bubble is about to burst when it comes to negotiations for the upcoming contract.

In the television business, ratings are everything. Data from 2004 showed the National Football League with a 10.1, which translated to 15.4 million viewers. NASCAR was second at 5.5 or 8.8 million viewers on the average. The PGA Tour and Major League Baseball were virtually deadlocked with ratings of 2.7 with the PGA Tour at 3.8 million watchers and baseball one hundred thousand viewers in arrears.

Now Tiger has cooled a bit, the business climate is not as good as it was when the last contract was drafted, and that could translate to a situation in which the PGA Tour would have to accept as much as $120 to $150 million dollars less than they received at the time the last agreement was signed. This would mean that the professionals will have to take a cut in pay, something that most could accept and still survive very easily.

During the current contract period, it is estimated that CBS and ABC will lose $15 million each on tour events in 2005, whereas NBC will lose just $5 million since it will air just five tournaments.

It is apparent that the networks are happy with the majors. CBS televises The Masters and the PGA, NBC the U.S. Open and ABC The British Open. Therein lays the problem. The majors do extremely well and most of the remaining events on the tour often go begging.

 

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