Northern Ireland's Rory McIlroy
Northern Ireland's Rory McIlroy © Reuters

At this moment, America is not the kindest place for foreign workers. But Discovery Communications, the US television network group, is betting $2bn that US president Donald Trump’s hostility does not apply to professional golfers. Last week, Discovery announced it had secured global media rights outside the US for the PGA Tour, America’s professional golf circuit, through to 2030 for a total price of $2bn.

The game’s best players are now born on every continent but have, almost universally, congregated to compete in the US. Discovery wants to build a golf ecosystem with live tournament coverage and softer features that it can package to fans around the world. While DisneyComcast, and Netflix fight over pricey cinema and prestige dramas, Discovery is trying to find a niche in unscripted content to prove that relative media minnow (at an enterprise value of $36bn) can still flourish.

Sports leagues can slice and sell broadcast rights by channel. Television rights might go to a TV distributor such as Sky or BBC, and mobile and online access to a specialist. For example, Amazon acquired rights to show a portion of matches from the UK’s football Premiership. 

Discovery’s PGA Tour deal is comprehensive for all the golf league’s media rights for all markets outside the US. Discovery runs an eponymous TV network, as well as Animal Planet, Food Network and the Oprah Winfrey chat show. With Eurosport, it offers sports viewing on any device to subscribers. The challenge for legacy groups such as Discovery and Disney is to buy or create attractive content and deliver it flexibly in whatever form consumers prefer.

Investors are sceptical that the transition can be straightforward. Discovery shares were down more than a tenth in the past year on worries it was too wedded to the pay-TV cord that millennials were cutting. The shares trade at a modest six times ebitda or cash earnings. But targeting micro-communities underserved by the top media groups is a good idea. Fans of the world’s golf superstars playing in America might just be the right subculture.

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