Phil Mickelson, Rights Fees, Obnoxious Greed and PGA Tour

Here is what Phil Mickelson said about the PGA Tour as printed in an online article for Golf Digest:

"“For me personally, it’s not enough that they are sitting on hundreds of millions of digital moments. They also have access to my shots, access I do not have. They also charge companies to use shots I have hit. And when I did ‘The Match’—there have been five of them—the Tour forced me to pay them $1 million each time. For my own media rights. That type of greed is, to me, beyond obnoxious.”— Phil Mickelson"

In an interview with Golf Digest done Wednesday of this week, Phil Mickelson accused the PGA Tour of greed that was obnoxious when it comes to his media rights. And he complained that he didn’t control his media rights.

I think he hasn’t thought it through well enough. As he said at the Saudi International tournament, sometimes he gets himself into trouble with comments or tweets, and this could be one of those times.

First of all, we all have rights to our own images.

But in golf, and in other sporting events, there’s a complication. There are so many players whose images are going to be shown, and nobody ever knows in advance who they will be. How to compensate everybody in advance could be a nightmare.

To simplify the process, the PGA Tour asks players to sign releases for use of their images while playing in PGA Tour events that are televised. They used to do that before every tournament, but there may be a blanket release these days.  Regardless, the Tour is able to utilize those signed rights to get the networks to pay the PGA Tour handsome rights fees.

The TV rights fees that go to the Tour are collected for the benefit of all the players and the fees go, at least in part, to paying players for their finishes at tournaments. Sponsors make up the rest.  Forbes has estimated that 60 percent of the purse comes from rights fees and 40 percent comes from sponsors.

As the rights fees go up, the players get increased purses, aka more money.  All of this increases when television ratings go up. Here’s where everyone says, “Thank you, Tiger Woods!”.  And Mickelson himself has said that several times over the years.

To contrast a before and after Tiger money and fees situation, here’s an example of what PGA Tour players got for winning The Players before and after Tiger Woods.

In the pre-Tiger era of 1996, The Players, which has the biggest winner’s check all year, paid $630,000 to the winner, Fred Couples. In 2021, The Players champ, Justin Thomas, received $2.7 million for winning.

The difference between 1996 and 2021 is in bigger rights fees and increased sponsor commitments. (Plus inflation.) Both of these are generated on behalf of the players because the PGA Tour negotiates with the networks and sponsors, proving the value of the product is increasing over time.  The Tour’s job is to get the best they can for their constituents, which are the players themselves.

There is a FedEx Cup payout at the end of the year because of the deal that the PGA Tour negotiated for Phil Mickelson and all other Tour players on their behalf with FedEx.  The players didn’t come up with the idea of the FedEx Cup. The executives at the Tour wanted something that was more season long, like the NACSAR series.

So, players like Mickelson, get more money via the FedEx Cup because the Tour has negotiated rights fees on his behalf.  It’s unclear why Mickelson either doesn’t know or hasn’t realized this.  (I suspect Greg Norman has been whispering in his ear as Norman also has to pay rights fees to hold the QBE ShootOut. )

However, with regard to The Match, Mickelson claimed that he paid $1 million in rights fees. Likely, he personally didn’t pay it.  His production company paid for it.  Mickelson is a part-owner of the television property called The Match along with Tiger Woods, and some other people, according to online sources.

As the owner/ producer of the event, Mickelson and Woods et. al., the production company, needed to do what all production companies in televised golf do in this situation, and that is to pay a rights fee to the PGA Tour.  It was ever so. Just like the NFL, the NBA and MLB are paid rights fees for the broadcast of events with their players.

The Skins Game, a popular Thanksgiving golf event for many years beginning in 1983, was a similar situation.  It was owned by the late Don Ohlmeyer and Barry Frank of TWI, after Ohlmeyer bought the rights from the person who actually created it, Bob Halloran, at the time with Caesar’s World.

The Skins Game owners had to gather up golfers who were willing to get paid based on performance, probably so long as all travel costs were covered. (Every golfer thinks he can beat every other golfer.  That’s how they make their living so getting $25,000 to $75,000 a hole looked good to them in 1983.)

To televise the event, Ohlmeyer and the rest paid the PGA Tour a handsome rights fee because PGA Tour players were in the event. It was what they called a co-sanctioned or sanctioned event which is what everybody wants. To get that stamp of approval, like the Good Housekeeping Seal, they had to pay the Tour something.  It’s the cost of doing business, just as it is with the NFL.

Now, if The Match didn’t get sufficient sponsorship to pay back the partners of the enterprise over and above the costs, that’s on them.  That’s not on the Tour.  Or maybe somebody needs to look at how the money that came in was spent. There were a lot of moving ownership parts what with the betting, the television, the golf, and the courses.

I know about paying rights fees because I own a television program that paid the PGA Tour rights fees for several years.  The fees were based on the breadth of coverage of the program and the average minutes of tournament footage per show.  So, if Fred Couples, for instance, was talking about one of his victories at The Players, we could show Fred making the winning putt or making some miraculous shot that sealed the victory.

Mickelson is right about having to pay for using his shots at the Masters because it operates exactly the same way with that footage.  If he wants to use it for any venture, for a commercial about any product that he is representing or anything at all, then the Masters has to get paid or they have the right to sue because they own the tournament and the footage.  The Masters pays CBS for the time, and basically, a production deal is worked out.

I’m not privy to what the Masters does with regard to the PGA Tour, but since the Masters was televised (1958+/-) before the actual PGA Tour came into existence (1968+/-), it’s likely they came to reasonable terms.  The Tour sanctions the Masters, again, giving it the seal of approval, and releases PGA Tour players to participate.  They also don’t compete with another tournament that week because, really, it would be bad for business.

In Mickelson’s case, regarding Masters footage, he probably signed a rights waiver when he entered the tournament, or his agent did for him. The U.S. Open and PGA have similar rights situations and paperwork.  They have to.  If they don’t sign the release, they don’t get to enter because nobody wants a lawsuit.

If Mickelson wants to use his golf tournament images or wants certain ones, they are all living at PGA Tour Productions which has copies of every PGA Tour golf tournament that’s ever been telecast since the invention of easily made and stored videotape or digital copies. All he has to do is ask and pay the appropriate fees for the use, and the research of finding everything Phil Mickelson, and for the dubbing of it.  Different uses have different fees.

When I had access to footage, the Tour had logs of what happened and who it happened to for every shot in every telecast on the PGA and Champions Tours. So, if I knew that Phil Mickelson hit a shot on the 13th off the pine straw at Augusta National on Sunday in 2010, the logs would get me the time code vicinity quickly, and it could be called up fast for insertion into a program. Don’t know if they still do that.

But back to the larger issue of rights and rights fees, if television networks had to negotiate appearance fees with 144 to 156 players each week in order to have each tournament on the air, it would just be too much trouble.  They’d find something easier.  Baseball might still be as popular as it once was. Tennis might be seen on networks more often.

Without this rights arrangement, golf would likely not be on television.  If golf weren’t on television, how many people would know who Phil Mickelson is?  He’s famous, but mainly because he won a lot and those victories have been on television.  His fame is thanks, in part, to the deals that the PGA Tour has negotiated for all players.

Signing releases is something that people do every day.  Releases have to be signed for actors in commercials and for those in print advertising and online advertising. The only time that doesn’t apply is in news, and sometimes, it’s better to ask the person being interviewed to sign a release just to be safe.

Now, the PGA Tour tries its hardest to keep images of players from escaping to the general public without the players getting compensated through the PGA Tour. However, the public use of cell phones at golf tournaments has put a crimp in the ability to control what is disseminated. You only have to look at Youtube to know this is true.

So, I think Mickelson needs to eat those words about the Tour being obnoxiously greedy.  If they are, it’s on his behalf.  The Tour protects the rights of the players like it’s a momma grizzly bear and they are its cubs.

Sure, there may be things that the PGA Tour does that we don’t like. But they are doing what they are supposed to do, which is trying to do the best for all the players who are Tour members. If Mickelson doesn’t like the cost of being in a production company, which includes rights fees, he should get out of that business.

I hear Frank’s hot sauce is good with a helping of crow.