This Deal Fits The New CW To A Tee

You may not yet know the name Perry Sook, but if you’re a golf fan you’ll likely be more familiar with him in the coming months.  In a surprise move first leaked earlier this week by popular personality David Feherty, the much-maligned Saudi-backed LIV Golf tour will have a broadcast home in 2023 on the CW network that Sook’s Nexstar Broadcasting recently took management control of.

As James Colgan of GOLF reported yesterday:

The upstart league is nearing a TV rights contract with the CW, sources told GOLF, granting media rights for LIV’s second season to the network with one of the country’s youngest viewing audiences.

Details of the agreement have not yet been announced, but one person with knowledge of the matter indicated that LIV will be on the paying end of the transaction. Such an agreement would mark a switch from the traditional business of sports television, in which a broadcaster pays a fee to a sports league for the rights to its live events and handles most of the advertising on its own.

LIV GOLF has been ridiculed by numerous politicians and advocates for its ties to funding from a Saudi regime that is accused of engaging in “sportswashing”, essentially paying their way through the support of global sports to otherwise dust under the rug the kinds of incidents which ABC News’ Michaela Mocfuso reported on last summer as the tour’s first tournaments began to take place:

In this case the tournament sponsor is the government of Saudi Arabia, which is backing the event with $2 billion from its Public Investment Fund, according to Forbes. At issue is that the Saudi government has been accused of numerous human rights violations over the years, including the murder of Washington Post journalist Jamal Khashoggi in 2018. Both U.S. intelligence services and a U.N. special rapporteur have blamed the Saudi government for the murder.

The tournament will unfold over the next four months, with games at eight different courses including former President Donald Trump’s courses in Bedminster, England, and Miami. Other sites include Boston; Chicago; Portland, Oregon, Bangkok and Jeddah, Saudi Arabia, according to the league’s website.

That sort of cloud scared off the majority of existing PGA golf partners, as The Hollywood Reporter’s Alex Weprin recapped yesterday:

LIV has spent enormous sums to lure top PGA Tour talent like Phil Mickelson, Dustin Johnson, Cameron Smith, Brooks Koepka and Bryson DeChambeau to its own product, and has held events (including at Donald Trump’s course in New Jersey) with tweaked formats to try and appeal to a younger demographic.

But the PGA has fought back, telling broadcast partners (which include NBC, Disney, Paramount and Warner Bros. Discovery) that any deal with LIV could impact future negotiations with the PGA. And the PGA’s biggest TV draw, Tiger Woods, has launched his own company, which will produce primetime golf events for TV, open only to PGA golfers (and presumably their TV partners).

But, respectfully, not even Woods can match the type of track record that Sook has achieved during his roughly quarter-century at the helm of Nexstar.  From modest roots with the purchase of two stations in Wilkes-Barre, Pennsylvania (the same DMA where HBO launched a quarter-century before him), he has bult Nexstar into the largest owner of broadcast television stations in the U.S., with 200 stations in 116 markets, as well as what WGN America, which has now been rebranded as a CNN competitor called Newsnation.  When he acquired the former assets of Tribune Broadcasting in the nation’s largest markets, including New York, Los Angeles and Chicago, he acquired the CW’s most prominent affiliates.  Per Nexstar’s website, Sook has built his empire into a $4.6B net worth as of 2021.

The CW he inherited was mired in debt and rapidly losing traction in a streaming-centric environment where the network’s younger viewers of expensive scripted dramas were rapidly choosing not to subscribe to a cable or satellite distributor.  Worse yet, what viewers he had were not very likely to watch his stations’–or Newsnation’s–newscasts, and the advertisers that would be inclined to support them weren’t likely to be interested in both.

As the GOLF article points out, the win-win dynamics of the LIV-CW deal are compelling from a business sense:

In a lot of ways, the CW is a weird fit for LIV: – not a big-time network – not known for sports – not a destination for golf watchers In others, it makes some sense: – super young audience demo – national network with big reach – big investment from new owner (Nexstar).

In the CW, LIV finds what it hoped for all along in a broadcast partner: a national TV network (the 21st-most-watched in the U.S. in 2021 by average primetime viewership) with a young audience and schedule flexibility. The agreement will bring the league’s 14 events to some 100 million U.S. homes in 2023, a massive potential audience as LIV seeks to further entrench its legitimacy in the golf world.

With the likes of former FOX Sports chairman David Hill advising LIV on potential broadcast deals, speculation was rampant that FOX would wind up at the eventual outlet.  But the kind of pressure that the PGA’s more politically sensitive partners could wage on a network as dependent upon other mainstream sports franchises like MLB and the NFL could inflict upon FOX couldn’t be dismissed.  For the CW, which is essentially starting from Ground Zero in its new incarnation, the downside risk is minimal.

With few exceptions, the time periods that LIV events will air in are currently occupied by extremely low-rated syndicated shows or infomercials.   While LIV is seeking a younger audience than the PGA, it is not as young as that which the CW pursued–per Hill, more than three-quarters of many golf tournaments’ audiences are over 50.  And the men 25-54 demographic that they are looking to attract is also the core sales demographic of many Nexstar stations’ and NewsNation’s newscasts,

And let me repeat Feherty’s big reveal.  The CW is being PAID for its time.  It’s called reverse compensation, a common business practice in broadcast television, particularly in large markets.  At a time when networks and streaming platforms are being crippled with debt with rights to most sports increasing exponentially as their audience shares shrink and consumer resistence to price increases mount, the CW will get the rights to dozens of hours of live content with high-profile personalities that can’t not improve on the deliveries of their current offerings, and they’re already in the black before a single ball is hit.

You can ridicule the golfers and Feherty for taking what many will consider “blood money”.  When the tour kicked off last summer, I asked readers to put yourselves in their shoes, if you were offered the kind life-changing money that LIV is putting in front of its pros and its hires.

You can snark that Sook’s reported loyalties to the likes of Trump are disturbing.  As the New York Post reported last fall, one particularly disgruntled NewsNation employee was fired because he called out his bosses on that very subject:

Paul Gerke — a New York-based correspondent at the ratings-challenged news channel — griped to news president Michael Corn late last month on a conference call with other journalists after NewsNation aired two hours of uninterrupted coverage of a Trump rally, insiders said.

The conference call became tense as Gerke repeatedly pressed Corn over NewsNation’s “mission” as a news organization, arguing that while NewsNation “advertises” itself as being “unbiased,” it aired the rally without analysis or corrections from network anchors, according to a source familiar with the call.

“Gerke just kept at it, asking what the mission is,” the source said, adding, “Corn doesn’t like to be pushed or questioned.”

“Michael got pissed,” the source added, with Corn telling Gerke “he could leave”.

And yes, Sook has brought in those who know the Trump mindset really well into his camp, as the Post further added:

Nexstar, the corporate parent of the channel, previously known as WGN America, tapped former Fox News executive Bill Shine as a consultant in the fall of 2021 to help with programming, sparking anxiety among left-leaning staffers, sources said.

At the time, Nexstar CEO Perry Sook assured employees in a town hall meeting that the network would be “centrist.” Some staffers griped to the New York Times that a NewsNation anchor gave President Trump a softball interview. Vice president of news Jennifer Lyons and news director Sandy Pudar resigned.

You know what?  Put yourself in Perry Sook’s shoes.

And bear in mind his are probably a LOT more pricey than yours.

Given the challenges he has a businessman, when you’re offered a deal like the one that LIV put in front of him–with the kind of statistical downside risk he faces–would you, with a fiduciary responsibility to your shareholders, be able to say no?

No, really, would you?

You probably wouldn’t be employed much longer if you did.

Given what little information was made available from the sketchy online airings that the 2022 LIAt the time, Nexstar CEO Perry Sook assured employees in a town hall meeting that the network would be “centrist.” Some staffers griped to the New York Times that a NewsNation anchor gave President Trump a softball interview. Vice president of news Jennifer Lyons and news director Sandy Pudar resigned.

Given what little information about the sketchy online broadcasts the 2022 LIV tour received, I highly doubt these tournaments will deliver anything close to what the PGA events will deliver.  Much like how on most nights CW shows rank well below their competitors’, and NewsNation’s deliveries pale in comparison not only to other news networks, but even the occasional off-network reruns they were running as their WGN America contracts were expiring.

That’s not Perry Sook’s problem, and it shouldn’t be your place to judge him for how he chooses to solve his, nor even who he may support politically.

Here’s who he does support professionally. Earlier this week, Nexstar announced that they will no longer live stream their stations’ newscasts.  They will make them available on a two-hour delay, giving them the ability to still sell live-plus-same day aggregate audiences to their advertisers, as well as offering their cable and satellite partners struggling to maintain subscribers at least some level of priority and protection.  And perhaps with the help of LIV Golf events, a few of those newscasts might attract larger levels of that desired M 25-54 demo willing to pay quality CPMs for both golf and news that those stations can monetize.

For my money, that alone makes Sook a way better businessman than most, regardless of where his political loyalties may or may not lie.

Anyone who may be teed off at this deal simply needs to take a more nuanced and less emotional view of the media business landscape, particularly when it involves sports.  If you watched a second of the recent soccer World Cup in Qatar you’ve already lost the right to bitch about sportswashing.  Respectfully, while I lament the kind of brutal behavior the Saudis have been attached to, the world is simply too damn big, and I’m too damn small, to stand on ceremony.

Maybe you feel more strongly.  You have earned that right, and like a majority of people, you may not watch.  Frankly, I’ll only watch if the golf is as good as Hill has represented it is.

But Perry Sook has also earned the right to do business as he sees fit.  And he’s likely doing a way better job of that than many, many others are.  Definitely me.  And, more than likely, you.

LIV and let LIV, right?





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