NEW YORK – The television networks already know what life without Tiger Woods looks like, and they were going to take that knowledge into their upcoming negotiations for the next contract with the PGA Tour.
The Tour’s six-year deals with CBS and NBC expire in 2012, and negotiations are expected to begin late next year.
Knee surgery sidelined Woods for eight months after his stirring win at the 2008 U.S. Open, slicing television ratings in half while he was gone. Now Woods is taking an indefinite leave from golf after admitting to marital infidelity.
During the last round of negotiations, NBC focused on securing rights to tournaments that Woods was likely to play, said former MAGNA research chief Steve Sternberg.
But even before a stream of sordid allegations led Woods to step away from the game, the networks had received a harsh reminder that the lofty ratings they receive when he’s in contention aren’t assured.
“The television business is about guaranteeing ratings to advertisers,” said analyst Larry Gerbrandt, a principal of Media Valuation Partners.
The networks sell ads based on a promise of a certain rating. They can’t afford to be frequently caught in the position of needing to make up for ratings that fall short, Gerbrandt said. Networks know how high ratings would be if Woods is in contention, but they can’t base their rates on the assumption that he will be.
“You can’t run a business that way,” Gerbrandt said.
The networks must decide how much money they’re willing to pay the PGA Tour based on how much money they believe they can make from advertisers.
“The negotiation to some extent is based on a worst-case scenario,” Gerbrandt said.
By the time the negotiations start, the networks might have a better sense of the scenario, good or bad. If Woods has already returned to the Tour, they’ll be able to gauge the effect of the scandal on ratings and his level of play. The longer he stays out, the more uncertainty will permeate the negotiations.
“If Tiger returns to golf and performs well, ratings will remain high,” Sternberg wrote in an e-mail. “But if he is not back yet, it will definitely impact how much the networks will be willing to pay.”
CBS and NBC declined comment.
“We’re under no illusions. We’re much more prosperous golfers for having Tiger Woods playing in our era,” golfer Graeme McDowell said. “There’s plenty of global superstars on the way up to replace him. But they’re not just quite ready to replace him yet. We need him to hang out for another four or five years.”