Good Night, SBS Open. Hello New LPGA TV Deal!

by Ryan Ballengee on Feb 11, 2009 10:25 AM EST Comment 14 comments

Ron Sirak broke the news last night - at least according to the Golf World email that I received - that the LPGA has brokered a new Korean TV deal. The current partner Seoul Broadcasting System, sponsor of this week's SBS Open at Turtle Bay, did not get the deal. Instead J Golf, a subsidiary of Joongang Daily News, did at approximately $4 million per season. It is basically double what SBS was paying in the prior deal, but does so by ending a 15 year relationship and losing the SBS sponsorship of the season opening event.

As Sirak points out, this is a gamble on a couple of fronts:

First, SBS has a proven track record of support for the tour. Chun bought the rights to show LPGA events in Korea in 1994, before Se Ri Pak had her breakout year in 1998, for $60,000. The rights fee SBS pays has increased to $2.25 million annually. SBS opened negotiations for a new contract at $3 million a year—a 33-percent increase—and, according to Chen, indicated a willingness to go to at least $4 million, but was apparently outbid.

The second risk for the LPGA is that J Golf is a smaller operation than SBS. SBS, which also has rights to the Winter and Summer Olympics and World Cup soccer, is one of the three major national networks in Korea while J Golf is a cable-only operation.

On the surface, it's easy to recall the situation with Ginn that led to the demise of the ShopRite event in Atlantic City. The LPGA Tour took the allure of big money from an organization with not nearly as sure footed as ShopRite. And now it is paying dearly. Still, given that the LPGA Tour is losing significant revenue by losing several tournaments this year, this may have been a forced move.

Nevermind that the LPGA Tour still has to negotiate domestic television contracts. They will likely still have to pay to get on American TV because it does not appear that ESPN will pony up to pay for the rights.

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$4 mil a YEAR ?

Why does that sound like a really small number for an entire year of broadcast rights ?

I’m not sure what his point about SBS having a 15 year history with the tour is – this is business and J Golf was willing to put up more money than SBS. J Golf is expecting people to tune into their channel to watch – what’s the mystery ? $4 million for an entire season sounds like peanuts for these big companies. SBS was getting a real bargain.

"this ball will fit in that fairway"

by courtgolf on Feb 11, 2009 1:32 PM EST reply actions 0 recs

I think he was trying to make the link

back to ShopRite/Ginn because that turned out so poorly.

by Ryan Ballengee on Feb 11, 2009 1:43 PM EST up reply actions 0 recs

ding ding ding...

…and the understatement of the day award goes to…..RYAN ! :)

"this ball will fit in that fairway"

by courtgolf on Feb 11, 2009 2:16 PM EST up reply actions 0 recs

it was a misguided attempt

Ginn is real estate based money – if our R/E market weren’t in the toilet right now, Ginn would still be making money and sponsoring tournaments. Their investment in the PGA/LPGA Tours was going to be in the $10 million area for three tournaments. J Golf is paying $4 million for an entire season.

J Golf and SBS have a little more solid footing with their cash flow.

Sirak’s weak attempt to equate the two situations is misguided at best. To say that because something bad happened in this situation, nobody should ever put money behind something else is pretty darn lame.

"this ball will fit in that fairway"

by courtgolf on Feb 11, 2009 2:21 PM EST up reply actions 0 recs

I kinda agreed with him

In the respect that the LPGA ran to more money over an established relationship. Obviously, that may not be the lone reason. But, it can be perceived that way.

J Golf is definitely not going under tomorrow. The Ginn comparison is wrong in that respect. In that respect, the move to Ginn should have been made more prudently. We all saw the storm brewing in 2005 that this couldn’t go on forever.

by Ryan Ballengee on Feb 11, 2009 2:53 PM EST up reply actions 0 recs

lost tournament

There may be more money, but the LPGA looses an event. This is not a good deal if it decreases playing opportunities. Maybe they’ll replace the SBS Open in Hawaii with the J Golf Open in Pusan

Truth has a well-known liberal bias.

by dianemarie on Feb 12, 2009 6:35 AM EST up reply actions 0 recs

They do lose a sponsor

but not necessarily the tournament.

by Ryan Ballengee on Feb 12, 2009 11:03 AM EST up reply actions 0 recs

ah yes...

Pusan National…“I love the smell of napalm in the morning…” :-)

It will be interesting to see what happens to the SBS. Playing in Hawaii for one week is pretty darned expensive for the lower ranked and paid players, but I’m guessing they like the trip more than the men. Turtle Bay is pretty swank with a lot of very nice beach to hang out on.

"this ball will fit in that fairway"

by courtgolf on Feb 12, 2009 11:37 AM EST up reply actions 0 recs

Some of this is out of their control

If the Mercedes-Benz leaves Hawaii, then the Sony Open is done. The LPGA Kapalua event has no sponsor and that probably can’t continue for long. Fields is gone. If it all caves in around them, Turtle Bay may be off the schedule just by bad luck.

by Ryan Ballengee on Feb 12, 2009 11:47 AM EST up reply actions 0 recs

It happens...

…tradition isn’t and can’t be the basis of a business decision. This has to go into the “things change” file.

My biggest problem with it is that I love watchig the 4 tournaments in Hawaii. January and February don’t seem quite so bad with all that paradise on TV. :-)

"this ball will fit in that fairway"

by courtgolf on Feb 12, 2009 11:51 AM EST up reply actions 0 recs

What's gonna happen

is gonna happen. Can’t stop it really. I’m not particularly sentimental about Hawaiian golf, so I wouldn’t shed many tears.

by Ryan Ballengee on Feb 12, 2009 12:00 PM EST up reply actions 0 recs

This is the shoprite fiasco again

The article clearly states

J Golf paid 4 million

SBS bid 3 million

SBS sponsors a LPGA tournament in addition for 1.2 million

4.2 to 4 million. Which is higher? SBS of course

Then there’s the unknown damage this move causes. Read what the SBS person said, the LPGA really angered SBS by what they did. More amazingly they were willing to say it in print. Remember face is all important in Asian society, and the LPGA slapped SBS in it pretty good.

Which has to have other LPGA sponsors asking themselves if dealing with Bivens is worth it. She’s thrown two long time sponsors over board. Yes Shoprite is at play here, it shows a trend of behavior from the mad woman in Daytona. The LPGA players better take back their tour or their may not be one in a few years.

Fire Carolyn Bivens Now!

by Bill Jempty on Feb 11, 2009 3:56 PM EST reply actions 0 recs

If you haven't noticed

At OTB sports, I have a Carolyn Bivens tag which I put in for all the posts I write that involve her.

At Wizbang Sports, there is the Carolyn Bivens subcategory. The only LPGA subcategories I have there are Bivens, Ochoa, Shin, and I should probably move Wie over.

If Ms. Bivens reads my post today I probably lost all chance for a Christmas card from her for another year but I been nailing her for 2 plus years. I’m not about to quit.

by Bill Jempty on Feb 11, 2009 4:06 PM EST reply actions 0 recs

I have to openly say

That I didn’t see the Golf Channel deal coming in the form of a rights fee. I really didn’t. Now, the rights fee could be a dollar for all we know. But, I knew ESPN wouldn’t pay a nickel to broadcast the LPGA Tour – particularly after the bad investment in the Arena League. Jon Show and I had been speculating that Golf Channel would be the winner, but for a fee? Didn’t see that.

by Ryan Ballengee on Feb 12, 2009 11:01 AM EST reply actions 0 recs