When people use a DVR to watch popular programming, they have the ability to skip the commercials. That's bad for the networks airing those shows, because it makes advertising space less valuable.
People watching sports generally don't do that. If you DVR a sporting event, it's hard to avoid finding out the score. Because of that, most sports fans watch programming live -- and that has increased the value of sports rights.
It's no big surprise, then, that the Professional Golf Association (PGA) has received a major increase in its rights in a nine-year deal with Comcast (NASDAQ:CMCSA), Walt Disney (NYSE:DIS), and CBS (NASDAQ:VIAC), according to Awful Announcing.
How big is the PGA deal?
The PGA deal will have various golf tournaments airing on Disney's ESPN, Comcast's NBC, and CBS. Full financial terms are not public, but the deal is roughly 60% to 70% higher than the previous one, pushing PGA rights fees from $400 million to around $700 million a year.
Does this deal make sense for the networks?
Golf attracts a loyal audience that's generally high-income, which is attractive to advertisers. In some cases, when a big-name golfer is in contention at a larger tournament, the sport can attract a larger, more casual, audience.
Golf isn't a major sport, but it's an important secondary one, with a proven audience that can fill a lot of hours on a television schedule. And while the price increase is significant, the numbers probably make sense given the changing nature of how people consume television.