More stories

  • in

    How Phoenix Fans Watch Their Teams May Change How You Watch Yours

    Numerous franchises are expected to overhaul their local media deals, returning games to free networks. The transition is underway in Arizona.Days after Mat Ishbia reached a deal in December to buy majority stakes in the N.B.A.’s Phoenix Suns and the Phoenix Mercury of the W.N.B.A., he met with top executives to learn more about the teams’ business operations, including how local fans were able to watch their games on TV.The executives detailed three possibilities going forward, including sticking with Diamond Sports Group, which owned the regional sports network that for more than a decade had held the rights to show the teams’ games. Diamond Sports was saddled with $8 billion in debts — it would file for bankruptcy protection in March — but it still wrote big checks worth millions of dollars a year.Mr. Ishbia, though, gravitated to the riskiest of the three options: ditching the regional sports network model that most teams followed for decades and returning to showing Suns and Mercury games for free on over-the-air channels. It might cost the teams money in the short term, but the bet was that it would help them reach more fans, including those who dropped their cable subscriptions or, like many younger fans, never had one.“What was interesting was the amount of people that were reaching out to me on social media about how they couldn’t watch the Suns games,” Mr. Ishbia said in an interview, adding: “It’s their team. It’s not Mat’s team. To not be able to watch your game wasn’t an option that we were interested in.”In April, the organization announced that it would leave Diamond Sports and broadcast all Suns and Mercury games on over-the-air channels with the company Gray Television. They sent thousands of free antennas to fans who needed them. They also created a streaming option with the company Kiswe.Mr. Ishbia’s decision shook a sports media world — clubs, leagues, networks, cable and satellite providers — trying to navigate the decade-long shift in how fans watch their home teams. Those used to finding games on one channel are having to search for them elsewhere as networks and leagues reshuffle their distribution deals in response to the rise of cord cutting and the boom in streaming. Some clubs could face shortfalls as they search for ways to replace revenue lost by the end of local media deals, potentially hindering their ability to bid for top players.More teams are expected to overhaul their local media deals in the coming months as their contracts expire. Those that choose to show more of their games on free television are returning to a world that the N.F.L., which shows more than 90 percent of its games on over-the-air channels, never abandoned.“It’s back to the future,” said Michael Nathanson, a media analyst at MoffettNathanson. “As more people cut the cord, these teams are losing their ability to reach their fans. So why not put it over the air for free and also build a streaming product that’s more accessible for younger fans.”Bally Sports Arizona, the network that televised the games for Phoenix’s N.B.A., W.N.B.A., N.H.L. and Major League Baseball franchises, shut down last week.Christian Petersen/Getty ImagesAs the largest market going through this, Phoenix is ground zero for the rapid transition. In recent months, the Phoenix Coyotes of the N.H.L. and the Arizona Diamondbacks of Major League Baseball joined the Suns and the Mercury in overhauling their local media deals. On Friday, Bally Sports Arizona, the Diamond Sports network that carried all of those teams, shut down.The Phoenix-area franchises are part of a growing wave of teams doing the same. The San Diego Padres, like the Diamondbacks, ended their agreement with Diamond Sports, the largest regional sports network provider. Major League Baseball used its broadcasting and streaming capabilities to keep the teams on the air and guaranteed they would get 80 percent of the revenue they received in their Diamond Sports deals.Diamond Sports, which must make at least $400 million in annual debt payments, is in talks with its creditors, some of whom want to reshape the company’s business while others want to be bought out. Diamond Sports is also in talks with the N.B.A. and other leagues about reducing their rights fees.A company spokesperson declined to comment on the talks with creditors and the leagues.Last year, Monumental Sports Network, which is owned by Ted Leonsis, the owner of the Washington Wizards (N.B.A.), Capitals (N.H.L.) and Mystics (W.N.B.A.), bought NBC Sports Washington and unveiled a new streaming service. The N.H.L.’s Vegas Golden Knights said in May that they planned to shift to a free over-the-air channel. The N.B.A.’s Utah Jazz and Los Angeles Clippers are selling their games and programming directly to viewers with streaming packages, with the Jazz also broadcasting their games on a free channel.The Jazz are “probably the largest real media company in the state,” Ryan Smith, the team’s owner, said in an interview this year. “If you actually think about the N.B.A., we’re not that different than a media or tech company.”Mr. Smith said he expected most teams to take over their broadcasts entirely within three years.Major League Baseball and the N.B.A. have been preparing for this possibility for years. When Sinclair, Diamond’s parent company, bought the regional sports networks from Fox Sports in 2019, M.L.B. made a bid because it wanted to control as much of its content as possible, Commissioner Rob Manfred said.“That was a product of our belief the media was going to change dramatically,” he said, noting that 11 major league teams still have contracts with Diamond Sports.Local media deals have traditionally been handled by the clubs, but in January, M.L.B. hired executives from regional sports networks to develop contingency plans, like taking back the rights to Padres and Diamondbacks games and showing them on MLB.TV’s subscription service, as well as an array of cable and satellite companies. The broadcasts included the same announcers.While deals with regional sports networks bring in dependable checks for teams, cord cutting has led to shrinking viewership.Kevin D. Liles/Atlanta Braves, via Getty ImagesJason and Wendy Dow, who live in Queen Creek, south of Phoenix, canceled their cable package with Cox this summer to save money and signed up for YouTube TV. Now they watch the Diamondbacks using the MLB app, which they said had better streaming functions.“I was kind of upset at first, but it’s turned out to be better in the end,” Jason Dow said at a recent Diamondbacks home game. “On the old feed, you basically just saw the game without a lot of extras.”The N.B.A. began preparing for changes in 2018, creating a “next gen” service that includes a streaming service and production and distribution support that teams can use to stream broadcasts. So far, the Clippers, the Jazz and the Suns are using it.Diamond’s bankruptcy doesn’t affect every team. Franchises like the New York Knicks, the Denver Nuggets and the Wizards in the N.B.A. and the New York Yankees and the Boston Red Sox in baseball own their networks. Other teams are locked into long-term deals, like the Los Angeles Dodgers, who signed a 25-year, $8.35 billion deal with Time Warner Cable in 2013 and have part ownership of their regional sports network.While the deals bring in dependable checks, some teams are reaching a shrinking viewership because of cord cutting. For others, like the Nuggets and the Dodgers, disputes with carriers like DirecTV and Comcast meant their games weren’t available to most people in their markets for part of their contracts.The Suns first had games on cable television in 1981, and started broadcasting games on Fox Sports, which later became Bally Sports, in 2003.“​At the time it seemed pretty good, pretty solid,” said Jerry Colangelo, who was with the Suns as an executive and then an owner from 1968 until 2004. “And they had some strong years of growth, for sure.”Instead of outsourcing the production and ad sales to the networks, the Suns produced their own content “to control our own destiny,” Mr. Colangelo said.The Suns continued to produce their own games and sell their own ads after Mr. Colangelo sold the team. That gave them and the Mercury a head start when Mr. Ishbia decided to change course. Most other teams will have to create those resources if they cut ties with regional sports networks.The early results have been positive. Viewership for Mercury games jumped 418 percent last season, said Josh Bartelstein, chief executive of the Suns and the Mercury. Mr. Ishbia said getting fans hooked on the Suns and the Mercury was the goal. He has made big (and expensive) moves since buying the team, trading for the highly paid stars Kevin Durant and Bradley Beal, and investing more than $100 million in a new practice facility for the Mercury and a new headquarters for both teams.“I’m not focused on money,” Mr. Ishbia said. “We’re focused on success. We’re focused on fan experience. And money always follows those things.”He added: “I think other teams will follow whether they have to or whether they want to. I think this is the future.” More

  • in

    Appearing This Year at the Masters: Azaleas, Green Jackets and Inflation

    Famously low concession prices increased a bit, injecting a small dose of the real world at Augusta National Golf Club.Follow our live coverage of the first round of the Masters.AUGUSTA, Ga. — The lush confines of Augusta National Golf Club, a sanctuary of sport, power and privilege, are showing a harsh economic truth: Inflation can be as invasive as kudzu weeds.There may be no athletic event in the United States that has been more defiantly immune to the outside forces of economics, politics and modernity than the Masters Tournament. But two aggravations of the present — inflation and supply-chain pressures — are encroaching at concession stands that have long sold sandwiches and sweets to the well-heeled for rock-bottom prices.Measured merely in dollars and cents, the changes are hardly seismic, especially for spectators who routinely pay thousands for tickets on the secondary market. Ham and cheese on rye, for example, has gone from $2.50 last year to $3 now, while the price of a chicken biscuit has increased by 50 cents, to $2. Augusta National is a place, though, where shifts on much of anything are so scarce that they attract attention.Now, in addition to being the first major showcase of the golf season, the Masters is an example of how inflation, running at nearly 8 percent nationwide through February, is trickling into corners of American life that traditionally tilt toward the economically obdurate.“The change in the price of concessions at Augusta is a little like the dollar store being the dollar-and-a-quarter store,” said Lawrence H. Summers, the former Treasury secretary (and a self-described “very enthusiastic and very bad golfer”) and among the first prominent figures to warn about this surge of inflation, which he characterized in an interview as “strong enough to break even longstanding traditions.”Augusta National is not prone to raising prices. The pimento cheese sandwich, a white bread ritual whose price remained untouched heading into the tournament that will begin on Thursday, has been $1.50 since 2003.At $6, Chardonnay is the most expensive item.Doug Mills/The New York TimesBut the menu, simple and typically static, and its prices are fixtures of the Masters and signature ways for Augusta National, which has faced decades of accusations of classism, racism and sexism, to convey hospitality, warmth and grace.“We want the experience to not only be the best but to be affordable,” Billy Payne, who was Augusta National’s chairman for 11 years, said during his tenure, which ended in 2017. “We take certain things very, very seriously — like the cost of a pimento cheese sandwich is just as important as how high the second cut is going to be.”Some economists and sports marketing executives, though, believe that the club’s motive for keeping prices low is not as benevolent as Southern gentility. Instead, they think that the club, whose members include titans of finance and industry, may deliberately use cheap concessions to construct a feeling of an earlier, less capitalistic era in sports — and the aura that has made the Masters brand among the most revered and valuable in sports.John A. List, a professor of economics at the University of Chicago who has attended the Masters, has said that Augusta National’s strategy amounts to wanting to “shock and awe you on the low side.”Even after 2022’s assorted hikes, the prices are certainly still low. The most expensive item is a $6 chardonnay, and a lunch of an egg salad sandwich, a bag of potato chips (plain or barbecue) and a soft drink totals $5. Patrons, as the club refers to the fans who crowd along the fairways, have been more likely to notice a menu item that vanished — like the Georgia peach ice cream sandwich, formerly sold for $2 — because of the supply chain, than their expenditures of a few extra quarters.“We have had some modest price increases,” Fred S. Ridley, Augusta National’s chairman, said on Wednesday, when he acknowledged that supply-chain troubles had also affected construction projects. “I think that most, if not everyone, would say there is great value in our concessions, so we are very comfortable with that.”The finances of Augusta National, a private club, are opaque, with the club not even saying how many general admission passes it sells for up to $115 on competition days, when some estimates have pegged crowds at about 40,000. But it has shown a willingness over the years to weather the more ordinary trends of inflation. Had Augusta been keeping pace, and assuming the pimento cheese sandwich was priced appropriately in 2003, the sandwich would have been about $2.14 at around this time last year, before steeper inflation began.Tied to inflation or not, Augusta was perhaps due for some price increases. Although the pimento cheese sandwich’s price, long memorialized in newspaper accounts of the tournament, held steady for this year, the club has not lately gone so long without nudging it higher. In 2003, when the price climbed to $1.50, the $1.25 standard had been in effect since just 1999. And when that price took hold, it was after only five years of $1 sandwiches.But the economic environment now, Summers suggested, gave Augusta “more need, more cover and more opportunity to raise prices than any year in the last 40.”Federal data shows that the price of ham increased about 7 percent between February 2021 and February 2022. The cost of white bread climbed 6.5 percent, coffee went up 10.5 percent and “limited service meals and snacks” increased 8 percent.“Because every other price is being raised in the economy, it probably feels easier to justify raising prices,” said Summers, who has played at Augusta but said that the course record had been left “safe by at least 40 shots.”Despite its pervasiveness across the country, inflation has not swamped the entirety of the Masters ecosystem, distinct as the only one of the four men’s golf majors to be played at the same course each year.TicketIQ, which tracks resale data, reported that most competition days were fetching lower prices than in 2019, the last time Augusta National was open as usual for the tournament. For the competition round on Thursday, the cheapest ticket at one point this week was $2,018, according to the company. It was $332 more in 2019.And STR, a travel research company, said that the average daily hotel room rate around the Augusta area had been about $390 for the week of the 2019 tournament. Although complete figures for this year are not yet available, many hotels in the region have offered rooms for around that level this week.It is also not clear whether Augusta National has increased the value of its premier tournament’s purse, which has been $11.5 million in recent years, for 2022. The club is expected to announce its intentions on Saturday.On Wednesday morning, though, another round of storms briefly forced players and spectators to depart the course. The grounds fully reopened right around lunch, just in time for a meal that was maybe a little more expensive than last time. More

  • in

    The Sandwich Economics of the Masters and Augusta National

    Experts say $1.50 pimento cheese sandwiches are not just about hospitality. Instead, they are a low-cost way to cultivate one of the biggest brands in American sports.AUGUSTA, Ga. — José María Olazábal hit a tee shot at Augusta National Golf Club’s 12th hole one day this week, jokingly bowed to the spectators and meandered toward the green of one of the great holes in golf.Much of the gallery swiftly headed toward one of the great bargains in sports: the Amen Corner concession stand, where fans at the Masters can come by a meal — sandwich, soft drink and a cookie — for as little as $5.The famously controlling club has spent decades accepting that it cannot, in fact, control the weather. But economic forces surrounding the tournament are well within reason, and so the price of a pimento cheese sandwich has stood at $1.50 since 2003. Adjusted for inflation, and assuming the sandwich was appropriately priced to begin with, it should be about $2.14.Economists believe the enduring bargain, at odds with an era of sticker-shock prices at many athletic events, is not merely a matter of Southern hospitality. Instead, they see hard-nosed, soft-power genius: a thrifty way to cultivate the mystique that has helped make the Masters brand one of the most valuable in sports.“They want to take you back to the days of Bobby Jones — the good old days, if you will,” said John A. List, a professor of economics at the University of Chicago, referring to Augusta National’s co-founder. “They haven’t followed prices, and they’re understanding that their real bottom line is over years. I think they purposefully don’t follow inflation and economics, and that makes the message even stronger.”“Economically,” said List, who attended the Masters in 2019, “I actually thought it was brilliant.”A patron carried her haul of Masters merchandise.Doug Mills/The New York TimesWhile Augusta National may be the most celebrated site of cheap concessions, it also may offer broader lessons for the sports industry. Georgia, with its moderate cost of living and high-wattage sporting events, has emerged as something of a case study. About 145 miles to the west, the Atlanta Falcons cut prices in half a few years ago when they moved into Mercedes-Benz Stadium. The franchise, cognizant that most of the money in the N.F.L. flows from media rights agreements and ticket sales, basked in positive news coverage and, ultimately, more spending by fans.The concept has slowly spread throughout sports. The Baltimore Ravens, San Francisco 49ers and Charlotte Hornets, among other professional teams, have rolled out their own so-called fan-friendly concession pricing initiatives, which have helped draw spectators into stadiums earlier and encouraged others to attend in the first place.At Augusta National, trimming the cost of a pimento cheese by 50 cents, to $1, would be a throwback to the presidency of George Bush — the first one. The club, which wraps its sandwiches in green packaging that blends in with the course, is unlikely to go in the other direction and sharply raise prices, which would mean abandoning the strategy it has long cloaked in the language of gentility and wholesomeness.“We want the experience to not only be the best but to be affordable,” Billy Payne, who spent 11 years as the club’s chairman, said in 2007. “We take certain things very, very seriously — like the cost of a pimento cheese sandwich is just as important as how high the second cut is going to be.”Fred S. Ridley, Payne’s successor, similarly said that Augusta National’s goal is to provide food “at a reasonable price.”Patrons took a lunch break near the 11th hole.Doug Mills/The New York TimesRidley said the low cost “just sort of adds to the feeling” for the sandwiches, though he declined to identify which one he prefers. (“I like them all but try to stay away.”)People, of course, would still eat. But the prospect of higher profit margins, List suggested, is almost certainly beside the point in the minds of Augusta National’s green-jacketed members, who are often titans of business or politics. Whatever quarters are left on the table represent an investment of sorts, experts said, while also aligning well with the ethos of the club and the state.“They want to shock and awe you on the low side, and they could double, triple or quadruple the prices,” List said as he headed to a Chicago White Sox game this week. “I would have noticed and thought that’s kind of normal. And I don’t think the Masters wants to do anything common.”Exactly how much money runs through Augusta National is unclear, a multimillion-dollar mystery that satisfies a tradition of privacy at a club that has long faced accusations of racism and sexism.Augusta National does not say how many tickets it sells for $75 for practice rounds or $115 for competition days, or how much it makes from the decidedly-not-low-cost merchandise fans buy and lug around in clear plastic bags. Its television deal with CBS has long been a series of one-year contracts that are not believed to be hugely lucrative for either the network or the club. It accepts only a handful of blue-chip sponsors, and Ridley said this week that the club would donate its proceeds from a new video game partnership with EA Sports to a foundation that promotes golf.And Augusta National is unafraid to capitalize on its food when it is bound for places beyond its gates. This year, fans could have Masters fare delivered to their doorsteps, including pounds of pimento cheese, pork and chocolate chip cookies. For good measure, the $150 packages included 25 of the dishwasher-safe plastic cups that are the tournament’s premier souvenirs.A sandwich, drink and a cookie costs around $5.Doug Mills/The New York TimesBut whatever Augusta’s financials look like, they are almost assuredly helped by the simplicity of the club’s menu. Along with the pimento cheese, which is served between two pieces of white bread, there is an egg salad sandwich for $1.50. This year brought the introduction of a new sandwich, chicken salad on a brioche bun, for $3. The most expensive selections on the menu are the beers, served in green plastic cups for the princely sum of $5.Pimento cheese, a staple of Southern events from backyard gatherings to black-tie weddings, has been on Augusta National’s menu since the early days, and is the most famous of the club’s culinary offerings.Nathalie Dupree, the cookbook author and pre-eminent Southern chef, said the acid in the mayonnaise acts as a preservative, clearing the way for golf fans to carry a couple of the sandwiches in a pocket or purse for a few hours and nibble at them under Georgia’s warm spring sun.“It is sort of Southern genius that they are going to figure out a sandwich for the heat,” Dupree said. “You are always working around the heat, before air-conditioning, particularly.”The sandwich was appearing prominently in newspaper accounts of the tournament by the 1970s, which was also when the Junior League of Augusta published its recipe book, “Tea-Time at the Masters.” The club’s pimento cheese recipe was not included, though a step-by-step guide for a concoction christened cheese paste, made from Cheddar, cream cheese and pimento cheese — at room temperature — did.The woman who submitted it? “Mrs. Arnold Palmer,” Winifred Palmer, whose husband had already won his four Masters titles by then.“My mother in particular was very fond of the pimento cheese sandwiches at Augusta,” said Amy Palmer Saunders, who chairs the Arnold & Winnie Palmer Foundation. “She would’ve enjoyed experimenting with anything like that in the kitchen.”Augusta National keeps the concession menu simple and affordable.Doug Mills/The New York TimesThe players also revere the food, simple as it is.Bubba Watson, who won in 2012 and 2014, said he favors the barbecue and pimento cheese sandwiches, asking club staff to hold the egg salad and slip in more pork when he orders a trio known as the Taste of the Masters. And before he won last year’s tournament, Dustin Johnson declared simply, “My favorite thing about the Masters is the sandwiches.”To walk the course this week is a chance to hear, no matter the time, someone mulling what they want to eat. The cashiers, accepting only credit or debit cards because of the coronavirus pandemic, are waiting.“They fulfill kind of the dream that you have,” said List, who described Augusta’s approach as “Adam Smith in his glory.”“When you see it on TV, you think it’s a wonderland,” he said of the course. “And Disney looks like a wonderland until they stick it to your wallet.” More

  • in

    For Elite Golfers, Money Talks

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesU.S. Travel BanVaccine InformationTimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyFor Elite Golfers, Money TalksSponsors have long paid players to compete in tournaments, but that money has become more important to get players to travel during the pandemic.High-profile players like Rory McIlroy, seen putting during round two of the Abu Dhabi HSBC Golf Championship in 2018, bring in fans and make sponsors happy, so their presence is important.Credit…Matthew Lewis/Getty ImagesJan. 20, 2021, 5:02 a.m. ETCraig Spence has no doubt that the shot he hit into the 18th green in the final round of the Australian Masters in 1999 was what granted him entry into the lucrative world of international golf, with its larger purses and equally attractive appearance fees.That shot set Spence up for a putt to beat Greg Norman, who at that point had twice won the British Open, and Spence did it in their home country at its most important tournament.“I hit the perfect shot, four feet behind the hole,” he said.When he made the putt, for a birdie and the win, invitations to play on the Asian and Japan tours, the PGA Tour and the European Tour came pouring in.Those were great, but it was the appearance fees from sponsors for top international players and up-and-coming ones like him that made a few of the long trips easier to make. Those fees eased the pressure on Spence to cover the costs of bringing his caddie, coach and family members to tournaments.“Now you’re teeing it up and playing for free,” said Spence, who now teaches golf in Western Australia. “You’re not going to lose anything if you don’t play well.”In 1999 Craig Spence won the  Australian Masters and moved into the echelon of elite golfers offered appearance fees.Credit…Jack Atley/Getty ImagesPaying players to fly to a professional golf tournament might seem unnecessary. But it’s an old practice used even in events where the winner receives millions of dollars and where an also-ran can make tens of thousands.And coming out of 2020, when professional golf events after March were largely closed to fans because of the pandemic, those fees have become more important this year and are an integral part of a tournament’s marketing budget.Without marquee players, fewer fans will watch at home, further worsening the return for sponsors. As one agent pointed out, if viewership numbers were down, sponsors would be even more concerned with their marketing spending than they were now.“Appearance fees do still exist at certain events for certain players,” said James Dunkley, manager for Lee Westwood and other players.The European Tour’s swing through the Middle East is known for using appearance fees to build top-notch fields. Those tournaments include the Abu Dhabi HSBC Championship, which starts Thursday, followed by events in Dubai, Saudi Arabia, Oman and Qatar, with prestige falling by the last two events.The reasons for paying fees are many. Without them, some top players won’t attend and the strength of the roster falls, which reduces the number of points available for the world golf rankings. That can further keep top players away. Sponsors, doling out millions of dollars, want to guarantee a strong field.Top players, who are mostly based in the United States, often want to avoid the travel and instead play in the early events on the PGA Tour, in Hawaii and California. They also have other commitments to schedule around.“Players typically commit to play 35 weeks, which leaves you 17 weeks a year off, or for holidays or sponsor obligations,” said Nick Biesecker, a longtime golf agent. “Time is your most valuable commodity. It has to be lucrative to carve out a week.”The Coronavirus Outbreak More