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PGA TOUR MEDIA CONFERENCE

June 4, 2018

Ponte Vedra Beach, Florida

THE MODERATOR: Good afternoon, and welcome. Thank you for joining us today, for those in the room and for those who have joined us on the conference call from around our networks. Whilst I know many of you know that the media are already covering news of our fantastic announcement today that we're going to partner with the PGA TOUR to create a first-of-its-kind international golf service, what we wanted to do was bring you together with our guests here to really give a bit more color on what the deal means.

I'm delighted to have with me today we have Jean-Briac Perrette, who joins us, who's president and CEO of Discovery Networks International.

JB PERRETTE: That's JB for most people.

THE MODERATOR: We have Rick Anderson, who is the global media officer of PGA TOUR; and we have Alex Kaplan, who, again, many of you already have met, but in his role as president and general manager of Discovery Golf.

Before I hand it over to JB to talk a little bit about how the deal -- why we're working with PGA TOUR, we thought we'd kick off with something that brings the deal to life for everybody in the room. Short video. Thank you.

(Video shown.)

JB PERRETTE: Thanks, everybody, for being here on this incredibly exciting day for us. As Fiona said, this is a landmark moment for us, an incredibly exciting new chapter in the evolution of Discovery and our overall transformation as a company, and as you think about us and you've seen us evolve, obviously many of you in Europe here over the last few years -- I'll give a little bit of global context and then we'll come back and talk specifically about this incredibly exciting news.

As you saw when we closed on our Scripps deal in March, we sort of repositioned ourselves as this global leader in what we call real-life entertainment, and for us, we see so much happening in the media space today and companies going after the big aggregation offerings, whether it be the Netflixes, the Amazons, what's happening obviously in the Disney-FOX-Comcast battles, and there's a lot of players going after the aggregation plays, and our specialty has always been for the last 30-plus years obviously historically in a linear fashion but increasingly over the last few years in a non-linear passion, this passionate focus around verticals and target groups of passionate fans in affinity groups, and nurturing those communities and building those communities to grow globally.

And so whether that's about adventure and survival, real crime, food, travel, home, in sports, in Europe, cycling, tennis, winter sports, and for us the focus has always been around can we find these categories of passionate fans, robust communities of not just viewers but participants, and categories of places where we think we can own that vertical in a way across not just one market but ideally every market around the world.

And so that brought us to today, and obviously a lot of work, primarily from the guys sitting on both sides here between Rick and Alex and Jay, who you saw in the release earlier today, have put a lot of work in over the last few months in building this new relationship and really frankly a groundbreaking partnership on both sides, for Discovery and I think also for the PGA, which is about recognizing this changing media landscape and the fact that we do want to take things more globally.

There's never been a better time to go global in terms of addressing a global community and taking a sport that has all the -- checks all the boxes of what we look for, which is passionate fans, a growing community, a fan base that is obviously a healthy amount of viewers but also participants, a sport that has in itself already a global reach, which Rick and the team have done an incredible job of already getting around the world. But also one where the participants are global. And so it's not just about -- even though it is a right that obviously has its roots in the U.S., at the end of the day, it is a sport that is absolutely global as opposed to being only U.S.

And so for us to basically take this incredibly passionate community, a community of viewers and participants, a participant in a hero space, and as you know, so much of the stories we've learned to tell obviously through our experience on Eurosport, but this is true about every channel we have, is about taking nobodies and making them somebodies. A lot of obviously what it is in sport is finding these incredible stories, not only obviously of the great heroes that already exist but building the new heroes of tomorrow and working with the PGA around that is a hugely exciting new venture for us.

It's a big moment for us. It fits squarely in our wheelhouse of these passionate verticals that we are going after, uniquely for the Discovery Company, compared to many in the industry, and why don't I pass it to Alex for a few seconds who's been really spearheading it on the Discovery side, and Rick obviously can fill in much more on the PGA side.

ALEX KAPLAN: Yeah, thanks, JB. This is an incredibly unique deal. There isn't another one like it in the marketplace, and so I'll get into kind of the details of how it's going to work and why we're so excited, but before I do that, I really do think it speaks to the vision that exists on both sides. David and JB on our side having the foresight and the vision to invest in something like this over a long period of time, with an understanding that, hey, the way people engage with content in sports is going to change and we're going to get out in front of it, and having a partner like Rick and Jay at the PGA TOUR that are willing to make that bet with us and build something and build something that fans are going to love everywhere over a 12-year period and really kind of hold hands and say, hey, we're going to go into business together and do something totally new and unique, from my perspective it is a very good feeling to announce this deal today but even more so to know that we get to work with JB and David on our side and Rick and his team to kind of make it a reality.

What makes this deal so unique and so compelling from our perspective is the fact that it really is all of the PGA TOUR's media rights. So in every market around the world, we're going to control -- obviously working closely with Rick and his team, the digital rights, the live digital rights, the non-live rights, the near-live rights, the archival rights on the digital side, as well as everything on the linear side.

And so what that allows us to do is localize. We're going to be able to create a proposition, create a product, and ultimately create a consumer offering market by market that fits for those consumers. So in one country, we may go heavy on digital and invest in localized commentary in language that doesn't exist today. In another market perhaps that isn't as evolved from a digital standpoint, over the first few years of the deal, we might lean more heavily on a sublicensing model because that's the way consumers view the content.

But because the deal is 12 years, because we control all the rights, it really gives us the opportunity country by country, market by market, to really focus on how fans consume golf, how they want to consume golf, and ultimately to create what I like to say is just a really amazing product. And that's what I'm just so excited to start doing is getting after it and start building that product and getting out to market and hopefully giving golf fans all over the world something they've never seen before.

JB PERRETTE: As I pass it to Rick, what we realize is Rick and the team have done an amazing job over the last few years building already a global footprint for obviously the PGA TOUR, and it's an impressive footprint with long-standing relationships which are strong, many of them with the partners that we have relationships with, as well, and so our focus is absolutely to continue to obviously adhere to those relationships. Our plan is to continue to manage those relationships with Rick through the terms of these agreements, and then figure out -- in some cases extend them beyond, if we think that makes sense in the scope of the partnership.

And so I know there's been some chatter early on about what will happen vis-Ã¡-vis existing rights deals. The reality is that will continue through the terms of those deals that have already been done, and then as those deals come up, we'll work closely with Rick and with the partners to figure out what makes the most sense for both sides as we move forward.

RICK ANDERSON: I share the sentiments that JB and Alex expressed. It's amazing to be here today, for Alex and I particularly so, because we've been going at this for a number of months to get us to today, so really it's hard to even believe --

ALEX KAPLAN: And you guys never found out, which is the most amazing --

RICK ANDERSON: Yeah, we were able to keep it reasonably quiet. Let me take you back a year or so ago, 18 months ago in terms of the PGA TOUR and its thought process. We have such an amazing opportunity in the international and the ex-U.S. space. Golf is one of the only truly international games. It's played all over the world. People participate in it all over the world. Golf re-entered the Olympics in 2016, which I think got the attention of governments and commercial participants in different countries that maybe it didn't have before. The PGA TOUR is the destination, the pinnacle destination for professional players around the world, and we already have 85 players from 25 countries that are from outside the U.S. playing the PGA TOUR on a regular basis.

So when we're back thinking about what's the next evolution of how we bring our product to market, we had two centerpiece things in mind. And at this point in time, we're not thinking about partnering with Discovery or anyone else. One is that we have built a significant international media distribution business over the last 10 years in particular by essentially taking a U.S. product built for the U.S. and exporting it and not customizing it, not creating specific products for specific markets, and built an amazing nine-figure business, as was referenced on some of the earlier calls.

We saw and see the opportunity to now actually take advantage of the players that are playing the game, the markets that love the game, and actually start to create custom products for individual markets. So this was in our mind.

The second big thing in our mind is the incredible importance of creating a global direct-to-consumer business, and we started that business in the United States with PGA TOUR Live. We extended PGA TOUR Live in a lot of countries around the world and have that content available really in a spectrum of ways, everything from direct-to-consumer to it being part of our sublicensing arrangements, but we really wanted to move to the next level and have a significant direct-to-consumer business.

And so we're thinking about all of this and going out and executing it on our own. It was right in this time frame that Alex Kaplan approached us and David Zaslav and Jay Monahan, myself and Alex, JB started talking about partnering together, and we started to understand what Discovery was and what they brought to the table. It was not -- we would not naturally think, let's move ourselves into a significant partnership like this. But when we started to see what an amazing set of resources Discovery brings to the table, boots on the ground in 220 countries, the ability to launch content in new markets and customize that content, we saw what they did in obtaining the Olympic rights, and then in a very short period of time, executing across both sublicensing arrangements and on the Eurosport Player content that was customized both from a programming and language standpoint in different markets for the Olympics, and we looked at that and said, that looks like a partner that could really help us achieve our vision.

And when we started to understand the scale, it started to look like a relationship that would make incredible sense to us. You combine all that with Discovery's already demonstrated ability and desire to sort of build these deep, passionate fan groups or affinity groups in different areas of business, and it just all coalesced and started to make incredible sense to us and was a proposition we wanted to entertain. And then off we went, trying to negotiate a deal with two parties that saw the vision for it, and we find ourselves here today.

We at PGA TOUR could not be more excited. The potential for this, the potential for this partnership to take our business beyond where we could ever do it on our own is something that really has us fired up, and as Alex said, we're ready to go, ready to get after it.

JB PERRETTE: And I think just to close out, and obviously we'll open it up for questions, but one of the things that's I think critical in this partnership is -- I remember back, quite a few of you were here in this room when we did a similar briefing around the Olympics last year, and profile-wise, a big piece of what made us particularly excited about this is the long-term nature of this. This is a 12-year deal, which is when you think about the evolution of the world, yes, things are moving fast from a consumer standpoint, but the reality is it still takes time to change habits, evolve the habits, and move a consumer behavior, even as fast as it already is moving in the media space.

And so one of the things that particularly was appealing to us is that frankly the vision and the willingness of Rick and Jay and the team to see this not as a -- and you heard it on -- not as a traditional rights deal of let's just do a three-, five-year, four-year deal and good luck, you cut us a check and good luck, but this is a real partnership over 12 years, and hopefully beyond that, because by the time we will have built the size and scope of the business we think we can build over that time frame, there's going to be huge install dates that we want to carry forward beyond that. But to really find over that time period a way to build the new model of media exploitation in today's world, and I think it's unprecedented for both groups and teams, both the PGA TOUR as well as ourselves, in terms of the length of that arrangement, but it's also unprecedented I think in the market in terms of the scope, the size, the ambition, but it will take time to play out. This is not something that we think in 2019 immediately we're going to see it all pan out and it's all going to be fully visible.

Markets come online over the first couple years, so it's not going to be global day one. Two, the evolution of the product will be just that, an evolution, where we will launch with a sort of beta, we will evolve it, we'll get content into it, and obviously as the market starts scaling, we'll be able to more efficiently build more content into the product, and we'll be learning stuff and we'll be seeing what the data shows us.

And Alex and the team being point on it for us will be figuring out what do we need to do more of, what do we need to do less of. The long-term nature of this is huge, it's critical for both of us, and I think it's a large part of what we were both very excited about embarking on but that truly makes this a transformative partnership.

With that, questions?

Q. (Indiscernible) various territories, renegotiate them on a sort of case-by-case basis, but what about countries in the world where Discovery doesn't already have channels? Can it also use this content as a springboard to launch a new channel?
JB PERRETTE: There's not many of those, first of all. I mean, we are in almost 220 countries and territories. There is not a lot of countries of any scale that I would say we're not already in. So I think that's -- can I say that's less the priority. I think the view is obviously this is one we're leaning into, the direct-to-consumer piece of it, and if, in fact, there are opportunities to take the content -- 10 years ago we might have been exploring specifically the ideas of where else can we launch channels and do we want to launch a golf channel, and that's not out of the question, by the way. There still may be places we decide to do that. And potentially we could take a channel that we already have and convert it into a golf channel. So that's an option. But I would say probably top of the list in terms of priorities is much more -- subject to market dynamics because not all markets, broadband penetration is either not high enough or broadband speeds are not great or it's a prepaid market versus a postpaid market. It will not be a one size fits all, as is often the case with us and one of the early things we learned internationally is you cannot make a one-size-fits-all strategy. It has to be very market-by-market, local market dependent.

But our leaning-in posture will be much more direct-to-consumer with the potential to sublicense and make the marriage of those two in some cases work, which we've found, at least in early days with the Olympics, very effective.

ALEX KAPLAN: I would just add to that, sublicensing can mean a lot of different things. The way consumers get access to content, as we all know, is changing. There may be other digital players out there in a given market in the future that might want access to this content, and there's nothing in this deal that keeps us if we think it makes sense, as JB says, in a given market to sublicense in that regard. So it's not just a linear digital decision, it's what is the best method to get the content in the hands of the consumers that want it in every single market.

JB PERRETTE: But knowing that, obviously the core of what we're embarking on this mission is to figure out how do we super-serve the golf fan with this kind of home of golf product. And so that's a mission that is absolutely critical to Alex's point, whether we sublicense, how much we sublicense, sublicense to broadcast, sublicense to pay, sublicense to a digital player, all those are on the table, but sort of the central shift in this is ultimately this idea of how do we build this next-generation golf enthusiast product that is something that if you are a golf fan you just cannot live without.

Q. JB, I think I'm right in saying that you only have golf deals with PGA TOUR rights in Norway, so this represents a pretty big change in strategy from Discovery. Can we expect to see more golf rights acquisitions in the future do you think?
JB PERRETTE: Well, I think it's important, because I think also, as far as in Europe, the focus has been historically sports related to Eurosport. I think the distinction we're making a little bit with this agreement is there may be places where PGA TOUR does make sense beyond Norway with golf. But that's not really the centerpiece, and the reason why Eurosport is part of the equation but not the entirety of -- and you've heard David and others talk about sort of Discovery sports, which is not a brand or a channel, it's purely the idea that this is well beyond Eurosport because this was not the intention to sort of do this partnership and then put all the content on Eurosport. We will selectively, and we always have that option, and so we will look and see where it may make sense.

But I'd just underline the fact that I wouldn't see it as a change in strategy because if we were coming to you today saying all this content across all of Europe is going on Eurosport, yes. That's not what we're saying. We're saying the content is going to go focused on direct-to-consumer, sublicense where it makes sense, and probably third option is if we decide it makes sense to do something with Eurosport, then we may. But it's sort of in that flow, in that prioritization versus leading.

RICK ANDERSON: I think that's absolutely correct, and I would say from our perspective, and I'll speak for you guys, too, every market is different, and so we know we have this objective to roll out this direct-to-consumer product and make it as robust as we can, but there are also a lot of different opportunities in the linear space, even in the digital space. There are global digital players that are making different moves in sports, and I think the idea that we go into this with is that we have to have a market-by-market approach and do what makes the most sense in every market, and I think we would never -- we would never have had interest in handing over all the rights and getting a check and going on our way, and we wanted to be part of the process. And I think for these guys, they're coming into a business that we've been in for 20 years, and so I think it was very important for you guys to have our team come with the rights and be able to sort of lock arms together and figure out what makes the most sense to achieve the broadest distribution and generate the most revenue that we can, which is our mission for our players. It really only works if we're in partnership together.

ALEX KAPLAN: Yeah, we don't have to recreate the wheel everywhere. We have an opportunity to grow and enhance the wheel, as I put it, and the PGA TOUR and Rick's team have done a fantastic job. I think in saying this all afternoon, we're going to look at it market by market, but in many cases, the PGA TOUR has established a great relationship with certain broadcasters, and obviously it will be up to the collective us to decide what makes the most sense in a given market.

But where there are great partnerships that are serving golf fans in a given market, we're absolutely interested in continuing those, not just taking the content and putting it on Eurosport.

JB PERRETTE: I think that's where it differs from the Olympics, for example. Where the Olympics, because it was all of Europe, because it was specifically deemed for a pay and digital proposition on Eurosport, that was clearly a rights deal where we said, that is anchored in Eurosport. This deal in many ways is actually more similar to our Scripps acquisition than it is the Olympics in the sense that in that deal we obviously fully acquired vertical -- strong vertically-owned brands, so Food, HG, Travel, that owned their verticals, killer IP. They owned the IP all the way around the world, where we could take that and not only exploit it linearly but also look to exploit it in a non-linear fashion. And this is obviously not an acquisition but in terms of it's a long-term partnership that is as close in the sports world as you could get probably, that has the same concept of going after the vertical of golf fans and trying to grow that base and super-serve that base with a really cool and compelling digital product.

ALEX KAPLAN: I think you also asked about other golf content there. So look, we feel really passionately that the PGA TOUR is a great place to start. We think this product can stand on its own.

That said, we're clearly in the golf business, and on a case-by-case basis where it makes sense in terms of establishing a golf product and building something country by country that golf fans love, we will absolutely talk to other golf properties out there. But again, that'll be a case-by-case basis because we feel really good about this partnership with the PGA TOUR.

JB PERRETTE: And as it relates to other non-golf entities, I think David said it earlier, we've said this for a while, but obviously this is a big, big priority for us now, but over time obviously we think -- we're continuing with Eurosport Player already, with now the PGA TOUR partnership, we're building an expertise not just around Europe but now globally to take incredible franchises and take their base and grow it. If there are other rightsholders, federations, et cetera, over time, that want to be similar conversations, we're absolutely open for business. The concept is this is an expertise that we're certainly humbled that the PGA felt comfortable enough looking at us and saying, these guys have a lot of capabilities to do this, and we want to try and obviously do it first and foremost extremely well with them, but ultimately if there's other rightsholders over time, that's clearly an evolution that we want to keep doing, so we'll keep looking at that.

Q. Coming back to the point about sublicensing, that could potentially bring you into discussions with SKY Sports, PGA TOUR in London for 2022; would you take what you have brought into this potential partnership with the PGA TOUR to someone that might be a rival; is that something you would entertain?
JB PERRETTE: When you say a rival for other rights --

Q. A rival for other rights that you might acquire for Eurosport or other parts of the Discovery business, you might then be in a deal through the PGA TOUR for the rights to the PGA TOUR on media platforms?
JB PERRETTE: Yeah, look, I go back to our Olympic experience. We sublicensed the rights to the Olympics with clearly broadcasters that are competitors of ours in a lot of markets. So we're very comfortable and used to the fact that we are -- we're pragmatic more than anything else, and so we have obviously a great relationship and a long-standing relationship with SKY across all three markets where they operate, and so that's a relationship that's been a great relationship for the PGA TOUR, and we have every intention for that to continue to be the case.

And so I think as those conversations come up, we will be pragmatic, and at the same time open to any combinations of working with -- I don't know the definition of competitors in this day and age is pretty much everybody, and so I'm not sure there's an easy --

ALEX KAPLAN: There are a lot of different relationships with SKY, too. It's not just one type of relationship.

JB PERRETTE: We have access partnerships, we have channel distribution partnerships, we now have sublicense partnerships. So we have a complete relationship with them, and frankly, a variety of other distributors, as well. You know, in Japan, they're partnered with a company that actually is a 20 percent owner in our business in Japan, so there's a lot of touchpoints that I think we're very, very comfortable that we will work through as those deals come up, but we don't come at it with a prescriptive that because it's a competitor -- we'll be pragmatic.

RICK ANDERSON: Yeah, and I would just add to that, SKY has made a massive commitment to golf and to the PGA TOUR, and so here now the golf business, and they're now in the PGA TOUR business. That's not something you're just going to walk away from. The things that they have done to go beyond the payment of rights fees, the way they've branded their channel, they're committed to golf, the dedicated channel, the things they do on-site at our events every week, none of that is something that you just walk away from lightly. They'd be foolish to -- because these guys are already heavily committed in the golf business. So every rights deal comes back up for renegotiation, as will the SKY-PGA TOUR deal. But I think all of us will be committed to hoping that we can continue that, but there will be a negotiation just like there is every time it comes up.

Q. It's my understanding that PGA TOUR will go free-to-air for the viewers in the UK. Could we see a deal with the BBC then at some point?
RICK ANDERSON: I think everything is on the table in every market. We always like to have some freeware distribution if we can get it just because of the broad audience that you have. That's always -- prior to a direct-to-consumer business, you're balancing value that you can generate from a pay TV operator versus what a free-to-air channel will -- what value we'll place on it. I think one of the great things about our sport is we have so much content. We have so much content beyond just what happens that we see on the main television broadcast, and we started to bring some of that to life in the last few years with our PGA TOUR Live product.

So ideally, and I think you guys would agree with this, if we could be everywhere, if we could be on freeware, if we could be on a substantial pay TV channel, if we can be on a direct-to-consumer product, all those platforms may not have the same content. They may have the content that makes the most sense for that platform, but an objective would be to try to do all of that.

And will you be able to achieve that in every market? No. But I think we go into it saying let's get this content out and distributed in every way that we can, as long as it makes economic sense, and that's what we always strive to do.

ALEX KAPLAN: And I would just note that the concept of free to air and getting a ton of viewers, as time goes on, I think that's going to evolve. So even from a digital standpoint there is nothing that would stop up from making certain pieces of content available in front of a pay wall, not free-to-air television as you mentioned, but it could serve much the same purpose.

RICK ANDERSON: It's free-to-web.

ALEX KAPLAN: Yeah, there you go. You've coined a new term.

JB PERRETTE: But I think that is the evolution that really when you look at this over the 12 years, the terminology that we use today is out of date. What is free-to-air? When you look at over the next 12 years, truly -- joking aside, but free online is becoming as pervasive, and so that might be, to Alex's point, a great way to get people in for the early rounds or for -- who knows how this will all evolve.

But I think we do understand wholeheartedly and agree with what Rick said, and we started with the Olympics, which is almost two thirds of the European population engaged with the Olympics, even though it was the Winter Games. All the southern European markets generally are less focused on winter, but almost two thirds of the European population engaged with the games because we saw all boats rise: The free-to-air coverage, the pay coverage, the digital coverage. And some of that is also that it's not the same.

And to Rick's point, one of the great things about the PGA TOUR is there's a lot of things we could do on digital that you just can't do on television. Following Sergio or following a specific player all throughout the tournament, so you don't have to watch just the feed. We were commenting, a few of us, on some of the coverage of the Masters a few weeks ago, and the fact that unfortunately on TV you're stuck to whatever the editorial decision is of the broadcaster to watch whatever they want you to watch. But if you really want to see your player, you can't see that. If you want to see the practice, if you want to see them warm up, if you want to see some behind the scenes, if you want to see other stuff, part of that journey that we're going to be on is what is the differentiated coverage that we can provide in a digital space that you just can't do on television.

And so it won't also be always just simply putting the same thing everywhere, but I think a big piece of what Alex and the team are charged with is trying to figure out what is that differentiated product that we can offer that is new and engaging and may not be for everybody, but certainly for the passionate fans of golf will be something they can't not have.

Q. It's been obviously a lot of talk about where rights sales go and the kind of Amazon and Netflix kind of direct-to-consumer marketplace, and also whether an organization like the PGA TOUR and others of that scale might look at developing their own OTT products under their own agency. What kind of new statement does this deal make about what direction that digital market is going?
RICK ANDERSON: Well, we made a very clear statement. In a way, we're doing both. I think our idea, as I said at the outset, was to bring a PGA TOUR-branded direct-to-consumer product to the world. What we determined was that we could do that much better with a massive partner at our side than we could do it on our own.

And I think some of the sort of league-only products that are out in the marketplace now, it's a little bit like I was talking about before, just sort of the U.S. export; a product exists, so why not stand it up and let people buy it. This is very different from that. This is us saying we would like to create something that can be customized for different markets and take advantage of all the great international players that we have.

We're also a little bit different in the respect that there are other rightsholders in golf. Right, there are other tours, there are other major championships, and while we create a tremendous platform, a year-round platform for a product like this, it's our combined objective to bring the whole game there. That's if you're looking at this five years from now, we would love to see every -- you'd be able to watch everything in professional golf that you want to watch on this product. And that's a shared objective we have, and that also makes it a little bit different, I think, than a league just sort of rolling out their own IP and their own stuff.

JB PERRETTE: I think the only thing I'd say is a couple things. One is I think in the world we're living in today with all the change, there's still a lot of people who believe they can do everything themselves. And our experience is that is a very bold but we think probably somewhat foolhardy approach. This is a complicated world, it's a complicated, rapidly-changing world, and we think partnerships are probably key to succeeding in that world, number one.

Number two is we're in this to be a business, not as a means to some other end, and I think some of the -- a lot of the other players being batted around in terms of digital players, et cetera, it's a tool. It's a tool potentially to drive broadband subscriptions or it's a tool to drive mobile data packages or it's a tool to drive users that you're trying to acquire for your primary business. This is our business. It's our only business. We don't have an ulterior -- we're not trying to sell products. We're not trying to sell retail. This is the core of what we do.

And so I think, A, we're in the business to make it a business, which is different than I think some of the other players that are out in the market today.

The third thing I'd say is we've learned that as much as there's a lot of conversation that goes on in the industry about wanting to make this a binary, is it digital or is it free to air, is it pay or is it free, we just don't see it that way. Yes, we think there has to be distinction, and to the question we were talking about before about having to have some uniqueness, but I think every platform actually provides a different value prop, and what we like about our hand and what we think -- and I think Rick just said, what they liked about seeing us is we have free-to-air in Europe. We have pay. We have digital. And we have direct-to-consumer. We have digital free and we have direct-to-consumer pay.

And so we bring a multiplatform approach to it. That may not be right in every market, but we think that is actually a very helpful differentiator versus just one or the other.

And the last two pieces is -- the fourth thing is that multiplatform nature provides promotional. This is a very noisy, very time-deficient consumer landscape, right? Where people just don't have -- there's a lot bombarding them and there's not a lot of time for them, and they need to break through, and to break through you need promotional platforms. And so what we can bring is multiple promotional platforms, again, across all those platforms. And then the last one which I think we can't -- again, I think Rick and Jay and the team have said this was a key part of it, is when you think about global, that's one word, but it's a highly deceiving word because it sounds super simple. The reality is it's made up of hundreds of different markets, and you've got to go local to succeed.

And so you need to have local expertise. You need to have local teams. You need to have people who can figure out how do you partner with the right local players, and that's an infrastructure that we've invested for over 30 years in building. And so I think that local element is critical, as well.

So those are sort of four or five ingredients that I think we've learned are very, very important as we think about this partnership.

ALEX KAPLAN: Yeah, the only thing I would say that makes this deal so unique is we will -- as JB said, figure it out market by market, what do we sublicense, what goes on digital, but yeah, other guys are out there doing those similar things, but they don't have all of the rights. So instead of figuring out what makes sense in each country, what makes sense for the consumer, they're taking what's left over, what's available on digital because someone else has the linear. We get to decide that based on what makes sense, and I think that is what's sort of fundamentally unique about this deal.

JB PERRETTE: And the last thing I'd say is also we have seen -- because we've been at this for a while with Eurosport and the Eurosport Player, the approach here is about focusing on golf and golf fans, as broadly as we can define that. Our mission is going to have to be -- we don't want just the like super passionate fans, we want to broaden it to be as broad as we possibly can make it and get as many people into our tent as possible. And when we've seen -- because we ourselves have done this, what David and I have called the buffet, where you give them some salmon, you give them some steak, so it's cycling, and then you get some tennis, the reality is that's not how fans work. Passionate fans of golf, as much as tennis is a great sport, they just may not be interested in tennis, or they don't want to pay for it. So we're in a world increasingly where people want to get what they pay for, and I think our view is we do know that golf and the work that Jay and Rick have done, of nurturing this community, has been incredible, has an incredibly passionate fan base that loves the game, that plays the game in a lot of cases, that follows the game. It's almost a lifestyle in many ways, and that passionate fan base is passionate about golf. And so we want to nurture them with that as opposed to trying to serve them three other appetizers and four main courses. No, we just want to super serve them that.

Q. Will the direct-to-consumer digital product you're talking about, will it be completely different from Eurosport Player? Will it be called PGA TOUR Player or something like that?
JB PERRETTE: Correct.

Q. You were talking about getting other golf on there, as well, not just PGA TOUR.
ALEX KAPLAN: So yeah, we have some work to do on what the ultimate brand name will be. That you'll hear from us on later this year. Certainly when we're talking about PGA TOUR content, you will see significant brand attribution to the PGA TOUR. But we also see a point where we have the ability to create something that can also have other content in a way that I think can make sense for all parties.

Q. What are the proceeds? Have you figured out how much --
ALEX KAPLAN: No, I think that's something we're not going to launch until January of 2019, and so obviously before then we will come out with pricing. But look, as JB said, I think David on some earlier calls today, we're going to learn here. It's going to go market by market. The demand, the ability and willingness to pay is going to be different country by country. The content constructs may be different country by country. We may have more content on the digital offering in one market versus another, and that may impact pricing.

We obviously like the audience here. We think it's an affluent one; we think they can pay; we don't think this is probably a low-end price point, but we're going to have to figure out what makes sense based on each market on an individual basis.

Q. Can you, JB, break down the $2 billion figure? First of all, it's a lot of money, and how will you make that money back? And secondly, I know it's comprised of not just a rights fee but also services and production. Can you break down how much is the rights fee and how much of it is --
JB PERRETTE: Well, I don't know what detail we've given.

ALEX KAPLAN: I wouldn't -- yeah, I think what we said is it's definitely phased in over time. We don't really look at this as a rights deal in the traditional sense, so I don't think we classify it the way you just described it. We can't answer the question quite that way. But what we can tell you is it's going to phase over time, and Gunnar said earlier today, in the first couple of years it averages around $50 million, goes up to 100 in some of the middle years and then up from there.

Q. Will there be like a revenue share if you subscribe to the PGA, to the top service, a cut of it is -- is that how this model kind of works?
ALEX KAPLAN: Yeah, I mean, there's some complexities, as David mentioned earlier today, where we think we're mutually incented, but we're not going to get into the details of how that works.

JB PERRETTE: The reality is the bulk of the fees are ones that are -- it's sort of a fixed clear schedule to it. I think in success, which obviously we hope that there will be incremental money for both of us, but the reality is the $2 billion is already a fairly -- it's fairly clear what the payments are over the term of the 12 years, and you've got to remember, $2 billion certainly is a big number, but it is a 12-year arrangement, so it's got a long, long life to it.

ALEX KAPLAN: With the business, by the way, that Rick and his team have done an amazing job of growing over the past five or ten years, we are taking over check a nine-figure business that exists today.

RICK ANDERSON: That's the thing is it's not starting from scratch.

ALEX KAPLAN: It's been growing significantly. I think the number is over the past five years they've grown it over 50 percent, just in a five-year period. So we like the trajectory that they're on.

But before we got involved, and obviously as we've talked about, we think one plus one can equal three here in terms of bringing both groups together, and that's why we think this can happen.

Q. How much has the deal been done in the context of discussions that have taken place about a global golf core at some point, either just involving the PGA TOUR or involving other partners in world golf?
RICK ANDERSON: I think we certainly know that that discussion is out there, and Jay and others have talked about that. This deal in particular has made no assumptions about that, just assumes that we have the current landscape in terms of golf, and we've done a deal, as the PGA TOUR and the other properties that are out there, there are things that can be acquired, and if there's things that change over time, it just changes the potential landscape.

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