MediaTalk | Season 3 | Ep. 14 - The Economics of the Masters Amid Golf's Ongoing Evolution

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence tech, media and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global, wherein the news and research staff explore issues in the ever-evolving media landscape. Today, I'm joined by S&P Global Market Intelligence Kagan principal analyst Justin Nielson, who tracks broadcast among many other things; Kagan principal analyst Scott Robson, who specializes in TV networks and sports; and Mike Johnson, or MJ, who's on the US sports watch. Continuing "MediaTalk's" recent sports run that has taken us into college basketball's March Madness and a changing TV landscape around Major League Baseball, today we're going to talk about golf in general and its tradition like no other: The Masters teeing off.
The initial focus is on the upcoming Masters Tournament, which takes place at Augusta National Golf Club in Georgia from April 10 through the 13. Then we're going to move on to other dynamics that are shaping the sport overall and conclude with fearless predictions about who will be fit for this year's green jacket. Justin, are you ready for the Masters? For many, it's golf's most popular tournament. Why does it resonate so well?

Justin Nielson: Yeah, thanks, Mike. I love watching the event. I wouldn't call myself an avid golf fan, but it's still the history, the beauty of the course at Augusta National, and the high level of competition. That's why they call it the Masters, right? You watch it like you would the Kentucky Derby. It's classic Americana.

Reynolds: Scott, I know you're a golf guy. As longtime CBS broadcaster Jim Nantz often says, "This is a tradition like no other." That includes the financials in play relative to the US rights and fees.

Scott Robson: Yeah, it's a tradition unlike any other indeed. CBS and ESPN broadcast the event, and neither of them pays a media rights fee, which is very unique in this day and age. Given that it's the most-watched event in golf, you'd think that the rights fee could go for upwards of, I don't know, $50 million to $100 million per year or so. If you look at things like the British Open, that brings in $58 million a year, and then some of these tennis tournaments have recently signed major deals, like the French Open, which is getting $65 million a year from TNT Sports. So, you can really see how much money is being left on the table there. Jim Nantz has been the voice of the Masters for 40 years now, and his "Hello, friends" has become somewhat synonymous with the event. Yes, he recently announced that he will be retiring in 11 years, which might be the most forward-looking retirement in history. But it really speaks to how connected CBS is to the Masters. The tournament has been on CBS since 1956, and those deals get renewed annually.

Reynolds: If he's right and CBS is still in the game, that'll be the hundredth Masters. So, we'll see how that plays out. Scott, the other thing too, there are also very few advertisers, which I guess is also part of the beauty, as Justin alluded to in watching the tournament.

Robson: Yeah, so the Masters is a great event for TV audiences as it's just limited to four minutes of ad time per hour. There are some corporate sponsors including AT&T Inc., International Business Machines Corp., and Mercedes-Benz. I think Bank of America is a new sponsor this year. So, the ad revenue generated from those four minutes per hour mostly covers CBS's production costs. So, the network pretty much breaks even on the event. But the relationship is based on mutual respect. CBS provides mass exposure to the event and benefits from the large audience. It's a great lead into "60 Minutes" on Sunday night. Augusta also keeps CBS on a pretty tight leash, though. There are certain things that broadcasters can and cannot say during the event. They don't really mention any of the brands on players' clothing, things like that.

Reynolds: All right, Mike, how about you? Do you enjoy golfing? The Masters. And as discussed, this tournament doesn't take any rights from CBS or ESPN here in the States, but there's other revenue sources for Augusta, including $1.50 for pimento sandwiches.

Michael Johnson: Yeah, thanks, Mike. Great to be with you again. I do enjoy hitting the course or the range whenever I have the chance. I definitely love the Masters as well. It's on the short list of events I'd like to attend in the future. But yeah, you're right. Augusta fully controls the broadcast. It kind of results in a significant TV and advertising revenue loss. By comparison, I think the US Open gets over $90 million for its domestic TV rights. So, the loss is pretty substantial there. But the tournament does generate revenue in other ways, the majority being from merchandise sales. They'll do about, I think, north of $70 million in merch sales this week, and that turns out to be around $1 million every hour. It's pretty crazy. And then they also take in some international TV rights, roughly around $25 million, with Comcast and Sky Sports contributing nearly half of that for exclusive coverage in the UK and Ireland. And then also they'll take in some revenue from their famous pricing on food and beverages, like you mentioned, roughly around $8 million this week.

Reynolds: You guys have already mentioned a bit of the rights that some of the other majors command. Justin, can you bring us up a little bit more to speed on the British Open, the PGA, the US Open, the monies that are involved there, and maybe some of golf's major events?

Nielson: The USGA brings in about $93 million per year on its current contract for the rights for the US Men's Open, the Women's US Open, Senior Open, and US Amateurs. Now, Fox Corp., interestingly enough, has paid half of those rights fees because Fox opted out of their 12-year deal in 2020 and sold those rights to NBCUniversal Media LLC. I would say from that perspective, the Masters is leaving money on the table, but at the same time, they're bringing in a lot from the merchandising aspects from the sales at the venue and the presence of Augusta National in terms of member fees, right?

Reynolds: Sure. Makes sense. Scott, Scottie Scheffler won last year's Masters at 11 under par, four strokes better than Ludwig Åberg. Scottie was in confirmed control on the back nine. I don't think it was necessarily one of the more competitive tournaments. The viewership took a bit of a hit.

Robson: Yes, absolutely. The Masters is still the most viewed tournament in golf. Obviously, golf viewership numbers could be largely impacted by the closeness of the competition. So, last year it was a pretty interesting Masters. The start was delayed due to bad weather. The wind was howling. Some players had to double up rounds on Friday. I think the final round averaged around 9.6 million viewers, which was down 20% from the previous year. And viewership for the Masters had peaked around 20 million when Tiger won his first green jacket in 1997. So last year, going into the final round, the field was pretty tight with Scottie Scheffler only having a one-stroke lead over Collin Morikawa.

Reynolds: But as you mentioned, Scottie pulled away on the back nine, and it's hard to keep audiences engaged when it seems like the outcome is inevitable. Mike, can you talk about overall PGA viewership in 2025? It was a bit of a tough year in 2024.

Johnson: Yeah, so the tour is experiencing a bit of a resurgence so far in 2025, bouncing back from a challenging 2024 season, like you mentioned. Viewership for Victor Hovland's win in the Valspar recently was up 10% for the weekend from 2024. And I think the final round for the Players Championship was also up a bit compared to last year. By the numbers here, so far in 2025, viewership ratings have been up 15% for the PGA Tour. There are a few varieties of factors that have contributed to this. Rory McIlroy being up there, right? Yep. Winning twice has definitely played a part. In contrast, I know we'll touch on LIV Golf here in just a bit, and their broadcasts have struggled to start the year.

Reynolds: Sure. Yep. We'll go for it now. Justin, your sense for last year's PGA audience downturn doesn't have anything to do with LIV. The LIV Golf viewership is pretty light, even though now it's on Fox Sports after being on The CW (US). Your take on this, Justin?

Nielson: Yeah, I think golf, as with any other major professional sport, all comes down to star talent and level of competition. I do feel that the LIV split had something to do with the PGA audience downturn in 2024, although it might improve. The game of golf overall in terms of fan engagement across both leagues with more creative formats, access to star players, maybe the whole ABA/NBA addition of the three-point line.

Reynolds: Okay. Yeah, that would be interesting. Yeah, LIV's got some top players obviously. Jon Rahm, who won the 2023 Masters, Brooks Koepka, Dustin Johnson, Bryson DeChambeau, those guys have all won majors, and there are older players like Phil Mickelson and Sergio Garcia. They've got much golf cachet and plenty of followers. We're coming up on two years already. In June 2023, PGA Commissioner Jay Monahan surprised a lot of people, including top players like Rory McIlroy, that there was a framework in place for a merger between the PGA and LIV. Scott, can you give us a current lay of the course, so to speak?

Robson: So, I think we're in one of the most, if not the most interesting points of golf's history. A lot of that has to do with the emergence of LIV and the proposed merger. As you mentioned, the merger was announced in June of 2023 and is still in progress, so to speak. Deadlines have come and gone. Some of the sticking points in the negotiations revolve around scheduling, overseas travel, and even financial penalties for LIV defectors. There are concerns about Saudi Arabia investing in the sport and also some anti-competitive practices at play. Rory said recently in an interview that he's never felt that the merger was close to happening, and it doesn't feel any closer now.

Reynolds: Okay. There are some other people that are more optimistic about it getting done. Apparently, there are numerous frameworks in place that are being put before the Department of Justice, so we'll see what happens.

Mike, six of LIV's 14 events are held in the US. Any sense for LIV's popularity outside of the US? I think DAZN Ltd. picked up rights in a number of nations.

Johnson: Yeah, exactly. DAZN recently reached a deal with LIV Golf and will air tournaments in over 200 global markets. It makes sense too since DAZN recently received a billion-dollar investment from the Saudi Investment Fund, the same entity investing in LIV Golf. They'll launch LIV Golf Plus that will house all LIV events and exclusive content. It'll also include LIV's "Any Shot, Anytime" technology, so something unique for fans to enjoy. For US-based viewers, this deal won't mean anything really. Fox will remain the exclusive home for LIV Golf stateside here. But it does show that LIV is still trying to make inroads globally as the talks continue. And as far as popularity internationally goes, I think there are some specific tournaments that are becoming more standout spots on a LIV schedule. I think a recent tournament, LIV's Adelaide Tournament in Australia, had over a hundred thousand people attend, and they had strong local TV ratings as well.

Reynolds: Nice. That makes sense. Scott, if it all comes together, do you think that Fox winds up getting into the mix? They had the deal with the USGA. I think they bailed after two years. If LIV and PGA come together, do you think Fox gets back in?

Robson: Yeah, I think initially the merger was intended to leave both tours up and running, so LIV would still exist and have its own rights contract. Regarding Fox, they made a deal with LIV in the beginning of this year to broadcast events across some of their networks. But the tour doesn't really attract a large TV audience. I think the first event in February averaged a little over 40,000 viewers across FOX Sports 1 (US) and FOX Sports 2 (US). Audiences for the PGA Tour are much larger than that, around 3 million or so. And as you mentioned, the current deal runs through 2030. It's hard to imagine what the media landscape is going to look like then. I don't think that a merger will have a material impact on the current deal, though.

Reynolds: Justin, Comcast Corp.'s programming arm, NBCU, is looking to spin off its cable networks outside of Bravo. Later this year, Golf Channel (US), which is also home to the European Tour action, will become part of the spinco. NBC and Peacock will remain with the restructured NBCU. Any thoughts here on the company's golf setup with or without LIV in the game? Is, again, all the same or any changes afoot there possibly?

Nielson: There could be some changes afoot. As the spinoff kind of materializes and potentially looks for M&A outside of the spinco, that may change in terms of the rights mix. But I think the move to streaming is continuing to happen at Peacock. Peacock has got the NFL and we will be getting some of the NBA games. So, I do feel like golf is going to be part of that sports package on Peacock.

Reynolds: I'm going to ask all of you if and when we hold another Masters “MediaTalk” in 2026, will we still be talking about the PGA and LIV looking for common ground? Or will the circuits be a merged unit? Mike, what do you think?

Johnson: Yeah, I'm going to be optimistic here and say yes. I think the details of a possible combined tour will get ironed out quickly, maybe from additional political pressure, but I could see this going a lot of different directions really.

Nielson: I would tend to agree. I think there's going to be more cross-pollination in terms of players and across the different events. And I think there will continue to be the PGA and LIV highlights in terms of their events. But I think more common ground in terms of a merger.

Robson: Yeah, I'm going to agree. I do think something might get done this time around. I'd say this time next year we'll have some more clarity around the future of golf. I think both tours will still be operating independently, but there will be more synergies between the two.

Reynolds: Let's talk about TGL, Tomorrow's Golf League, an indoor golf circuit formed by Tiger Woods, Rory McIlroy, and former longtime NBC Sports Executive and former Golf Channel head, Mike McCarley. It's played in a team format. For those who haven't watched on ESPN, Justin, can you give us a sense for what TGL is all about?

Nielson: If you haven't seen it before, it is a very interesting format. It merges the game of golf with more of the video game or eSports aspect. You've got the simulator, you've got the venue which is inside and the stadium, that's all set up with the different video screens and everything, so you can see the course. But it's interesting. It's definitely not a full live golf event.

Reynolds: It's a team format.

Nielson: Yeah, exactly. And there's some interaction with the different players across the different teams, and so you've got more of that team aspect as part of the golf, but it is more like a game, like a video game.

Reynolds: All right. By the way, TGL was supposed to start in '24, but the SoFi Center in Florida was damaged from a power outage. Scott, when we talked about this last year, you were skeptical. Your thoughts on how the first season went?

Robson: Yeah, I watched some highlights, but this is really not for me. As a bad golfer myself, I find the walkout in nature to be one of the best parts of playing. So, hitting into a screen in the stadium kind of takes away from that. That being said, I think viewership was pretty good at ESPN, and they were happy with the production. I think this league was started to draw a younger audience, but if you look at what's happening on YouTube, the audience is really growing over there. And this year we saw the debut of the Creator Classic at TPC Sawgrass, which featured a bunch of YouTube golf personalities and really an event to draw on the youth there.

Reynolds: All right, Mike, in the first season here just concluded, TGL, the Atlanta Drive beat the New York Golf Club for the title. It was $9 million in prizes. Scott mentioned a younger audience. Can you give a sense for the first season viewership overall and did it succeed in getting younger people to watch golf on Monday and Tuesday nights on ESPN?

Johnson: Yeah, I think everyone is pleasantly surprised with the success of TGL and its debut season. They got out to a hot start, averaging around 800,000 viewers over the first few weeks. Semi-final matches averaged just under 400,000 viewers, below the regular season average of around 500,000 viewers across ESPN. And then the average age of the viewers through the first few weeks was just over 50 years old. It's younger than the major sports of the NHL, NFL, and MLB, things like that. Moving forward, though, you could see the league building on this first-year momentum with new venues, expanded teams, or the possible inclusion of women's golf too.

Reynolds: Yeah, I mean they were talking about some of the owners here already. Arthur Blank owns the Falcons and now the Drive that won the initial championship. John Henry and the Fenway Group, they're the Boston Common owners. The Mets owner, Steve Cohen, is involved with the New York team. From what I've read, there's been all kinds of different owners from the major sports leagues who have been in attendance, and as you suggested, expansion could be on the way — maybe more teams or maybe shifting to a West Coast facility as well. So we'll see what's going on.

Getting to the end, let's get back to the Masters here. Amen Corner, Rae's Creek, azaleas, and birds continually chirping—these are Augusta staples. ESPN kicks things off, right Scott, with coverage of a family event of sorts from Augusta?

Robson: Yeah, so ESPN covers the first two rounds of the Masters, and they're going to kick things off with the Par 3 Contest on Wednesday. They have Wyndham Clark and Max Homa on the broadcast, so it should be fun. Then ESPN also does a "Welcome to the Masters" two-hour special on Thursday before the rounds get underway. They've got coverage on ESPN Deportes and ESPN+. So, a lot from ESPN. Alright.

Reynolds: And there will be more actual live tournament coverage this year on Paramount Global's Paramount+?

Johnson: Yeah, exactly. So the Masters and CBS are expanding their coverage by five hours, which includes two hours on Saturday and Sunday through Paramount+. The third and fourth rounds will be shown exclusively on Paramount+ from noon to two, and then will remain on the streaming service through the conclusion of the event.

Reynolds: Alright. According to FanDuel, last year's winner and runner-ups are the favorites. Justin, looking at some of the odds there, anything catch your eye?

Nielson: Yeah, I would tend to lean towards the favorites. Jon Rahm won it in 2023, so it could be a return. But Scottie Scheffler going for back-to-back would be interesting.

Reynolds: Alright. No disrespect intended to Augusta or Jim Nantz here, but we're going to ask the Kagan analyst to pick a winner. Who sinks the clinching putt on the 18th hole on April 13? Mike, you are first up.

Johnson: Yeah, I'm going to go with Scheffler to go back-to-back.

Reynolds: Justin, how about you?

Nielson: I think I'm going to have to go with my ASU alumni, Jon Rahm.

Reynolds: Okay. Alright, I'm going with Justin Thomas, and Scott, as they say, you drive for show and you putt for dough.

Robson: I've got to go with my guy, Brooks Koepka. I'm really hoping he can pull through this year. He has finished second twice, so I think this is his year to get it done.

Reynolds: That concludes this episode of "MediaTalk." Many thanks to Scott, Mike, and Justin for discussing the Masters, golf, and media. Thanks, guys. Thank you. Thanks, Mike. This is Mike Reynolds. Thanks to all of you for listening. Enjoy the Masters. We'll catch up on the next installment of "MediaTalk."