Fox Is Paying $364 Million To No Longer Air Golf

The television sector can be ruthless, especially with professional sports in the mix. TV stations are signing massive long-term deals that may seem like a good idea at the time, but in hindsight, the return just isn’t worth it. Sometimes the best move is to cut your losses and keep going.

Fox Sports does just that with its US Open package, handing it over to NBCUniversal. Fox Sports had seven years left on a contract with the USGA, but they chose to go golf.

As part of the departure, Fox will pay approximately 55% of its annual payment of $ 93 million to the USGA. In total, they will spend about $ 364 million until the end of 2026 on a contract they no longer own.

But there are several reasons behind this decision. For one, the first executives who signed the golf deal are no longer with Fox. And the game doesn’t really fit in with the station’s other programs. The most critical reason, however, is that this decision frees up money for Fox’s payment of NFL fees.

Dustin Johnson and Joe Buck at the US Open (Sam Greenwood / Getty Images)

Fox will reabsorb approximately $ 294 million, plus savings on production costs and other golf-related expenses. And they’ll need more money – their NFL payment schedule is expected to drop from $ 1.1 billion to almost $ 1.98 billion a year.

Remember, this is a league where Patrick Mahomes just signed a contract worth more than half a billion dollars. Even in the midst of a pandemic, the NFL expects to generate a ton of revenue and charges partners accordingly.

The NFL is certainly also Fox’s cash cow. His “Game of the Week in America” ​​has been the top-rated television program for 10 years in a row, averaging 24.8 million viewers per game, according to Sportico. In comparison, the scripted series on Fox had an average of 3.07 million viewers per episode.

Fox’s market capitalization has declined 31% since February, now standing at around $ 16 billion. Looking at things through this lens, the return of the NFL cannot happen soon enough.

In the long run, saying goodbye to golf will likely be a wise move for Fox. Still, it doesn’t do any good to spend more than a third of a billion dollars on a product broadcast on another network.



Source

Related Posts

Leave a Reply

error: Content is protected !!