On Tuesday morning, LIV Golf announced an agreement with the U.S.-based streaming partner Caffeine to carry the league’s Friday tournament coverage through at least the rest of the year. Below is an extended sampling from GOLF’s Hot Mic Newsletter on the agreement. To receive exclusive golf media updates like this one from me, James Colgan, click the link here or the tab below to subscribe.
COFFEE GOLF
If the name “Caffeine TV” means nothing to you … well, you’re not alone. To the outside eye, it’s tempting to view Tuesday’s announcement as a half-measure of last year’s semi-disappointing weekend broadcast agreement with the CW. Just as last time, LIV touted months of “negotiations” with interested buyers before it wound up settling on an unheralded partner with little name value as a sports broadcasting entity. And just as last time, the league struck out with the creme de la creme of the sports TV world.
While LIV surely would have preferred a multi-year agreement with a glitzy sports streamer like Amazon or Apple, the Caffeine deal has a few things to like for the upstart league — even if it still leaves a few major questions unanswered.
TGIF
At a basic level, the Caffeine deal is significant because it helps address LIV’s “Friday problem”: The league has not had a television rights partnership for its Friday tournament coverage from the beginning, resulting in one-third of its tournaments being unsold in terms of media rights.
In the sports industry where leagues primarily generate revenue from television rights agreements, offering Friday coverage for free on the LIV Golf app and for a small subscription fee on YouTube was not financially viable. “The days mentioned are now a thing of the past, which is a positive development.
Although the Caffeine deal may only bring in a fraction of revenue for LIV, it is still an improvement from last year. Additionally, the league may still secure a linear TV partner for Friday broadcasts.”
The unfortunate news is that it is uncertain how much the agreement with Caffeine impacts LIV’s perception.
While reaching a deal is positive for appearances, it is concerning that the deal represents another unsuccessful attempt to break into the billion-dollar budgets of established providers, especially since it occurred early in the new season. This situation still gives off a sense of desperation.
WHO???
It’s probably not the best news for LIV that this golf media reporter had never heard of Caffeine prior to Tuesday morning, but after some digging, the intel I’ve gathered is mostly sensible for the upstarts:
BIG GUNS
Following a $150 million seed round led by VC heavyweights Andreessen Horowitz and the Fox Murdoch family, Caffeine debuted in 2018. Today, media behemoths Disney and Cox Communications are joined by Fox chairman Lachlan Murdoch on the Caffeine board. Although cautious legacy counterparts are drawn to buzzy media startups, the Murdoch family’s involvement feels noteworthy in this case because of the family’s longstanding relationship with LIV commissioner Greg Norman. Hey, sharing a boardroom with Bob Iger probably doesn’t hurt LIV’s chances of becoming a broadcaster in the long run.
LIV ON TV
LIV’s press release touts a few big victories for the league’s viewership: growth of 77 and 60 percent, respectively, in average TV audience for the first two tournaments of the year on the CW. Those numbers are nowhere near the PGA Tour’s product (a comparison of a few hundred-thousand viewers to a few million), but make no mistake, they’re a considerable victory for LIV, which is betting on viewership growth as it navigates a new batch of U.S. TV deals at the end of the 2024 season.
MONEY TALKS
Caffeine’s value to LIV is clear due to its large and engaged young audience. However, the crucial question in the billion-dollar sports rights era is still unanswered: how can Caffeine generate value comparable to multimillion-dollar TV rights deals for LIV?
If we are considering different possibilities, there are two potential ways to predict the situation: firstly, Greg Norman’s acquaintances (the Murdochs) might be using their influence to support LIV by partnering with Caffeine; and secondly, Fox may be preparing to negotiate for full rights to LIV for the year 2025. The truth will reveal itself in due time.