Fox Sports is in; NBC Sports and ESPN are out. If you believe the reported figure that Fox will pay in the neighborhood of $100 million annually for 12 years beginning in 2015 to broadcast the U.S. Open and many of the USGA’s championships and international competitions, then the USGA war chest, already verging on the gross national products of Tonga and Samoa, will reach new heights. How did this happen and why? It’s a fascinating story.

With its existing TV agreements with NBC and ESPN set to expire at the end of 2014, U.S. Golf Association president Glen Nager established a five-person task force more than a year ago. The association depends heavily on its broadcasting revenue as the primary source to foot the bills.

As the economy worsened and the media landscape began to change, there had been growing concern that its U.S. Open broadcast revenues could diminish in the future. The temperature for the market at the time could be illustrated best by examining the PGA Tour’s latest deal. In September 2011, Tour commissioner Tim Finchem was hailed for producing “an increase” from its nine-year extension with CBS and NBC.

But much has changed in less than two years. With more fans choosing to watch live sporting events on their HDTVs and mobile gadgets and new competitors such as Fox Sports 1 set to launch shortly, coveted sports properties are suddenly commanding exorbitant rights fees.

“Sports content is more valuable than ever,” said Sarah Hirshland, the USGA’s senior managing director of business affairs.

As the saying goes, timing is everything. The USGA’s contract with the incumbent networks granted an exclusive 60-day negotiating period that began in June and ran through Aug. 1. Hirshland’s team already had begun cataloging the value of its properties in preparation for these negotiations. A USGA request for proposal last fall led to the hiring of Wasserman Media Group as consultants. (Hirshland came to the USGA from Wasserman and USGA board member Gary Stevenson was a former executive of the company, too.)

“We worked with experts in the media-rights space to understand our value proposition, to understand the market dynamics, and we went into the conversations with a pretty good idea of what the market would bear,” Hirshland said.

The dual bid of Comcast-owned NBC and Golf Channel provided the platform of network coverage – something ESPN did not offer from partner ABC – and a cable partner motivated to capture rights to live coverage of a men’s major for the first time. While NBC/Golf Channel has remained tight-lipped on the failed negotiations, sources familiar with the process said NBC and Golf Channel offered $80 million annually combined. That is about double what NBC is paying during the current contract, the sources said. ESPN’s offer reportedly wasn’t far behind.

During the exclusive negotiating window, the USGA talked frequently with ESPN and NBC but came to no resolution. When neither of the proposals gripped them, the USGA informed its two longstanding broadcast partners that it had elected to open the process to other interested parties. The intimation was clear: better not get cold feet in the next round of negotiations if you expect to renew.

On Friday, Aug. 2, Fox stood ready to pounce. The network of Bart Simpson and NFC football long salivated to break into golf, according to sources with knowledge of past PGA Tour rights fee negotiations, and Fox didn’t waste any time seeking an audience with the USGA. At 9 a.m., the Fox brain trust, led by co-president and COO Randy Freer and executive vice president Larry Jones, began presenting a briefcase full of ideas to USGA officials at the New York headquarters of Proskauer Rose, the USGA’s external law firm.

In the space of that initial 8-10-hour meeting, Hirshland said her team began to entertain the idea that Fox was a serious bidder.

“I would’ve said on Friday morning that it was as likely that by Friday afternoon that the conversation (with Fox) would be over and we’d be done with it as it was to go the other direction,” Hirshland said. “It was very clear that Fox was willing to bring a different perspective, and we felt that was quite healthy.”

The framework of a deal took shape that day until the two sides adjourned for dinner around “6-7ish.” From inside Proskauer Rose’s Times Square headquarters, the USGA brain trust of Hirshland, Henry Smokler, the USGA’s managing director of broadcast and digital media, consultants from Wasserman Media Group, and Proskauer Rose lawyers burned the office lights deep into the night. They discussed Fox’s lack of experience covering golf and concluded that it shouldn’t be considered a stumbling block.

“They have a very proven track record being able to launch in new sports and do it in a very strong and powerful way,” Hirshland said. “They did it in football, they did it in baseball so we have a very high comfort level that they will be able to produce world-class production.”

Neal Pilson, president of Pilson Communications, said the USGA is joining an established network with extensive sports experience, albeit none in golf.

“Fox is a reputable TV network,” said Pilson, who as a former CBS Sports president negotiated the Masters TV deal for 20 years. “The USGA is joining a list of major sports properties working with Fox. They are in the business of growing a cable channel. They want to get maximum sub rates. They’d like to get $1 a sub. They want to get maximum penetration. They want to get in 100 million homes. The way to do that is to gather up some of the major sports properties available.”

Hirshland said the association would collaborate with Fox in selecting the broadcasters to cover its events.

“In fact, Fox invited that. We didn’t have to force that,” Hirshland said. “Quite frankly, I hope they push us a little bit. That’s one of the goals for us. We want to welcome the fresh perspective.”

Over the weekend, negotiations crept on. Discussions with Fox resumed in person again Saturday. Afterward, Hirshland and her team chewed over their proposal further. They were attracted to Fox’s promotional and cross-promotional plan as well as a commitment to technological innovations. In addition to a minimum of 70 cumulative hours of live event coverage of the three Opens – men’s, women’s and senior – Fox agreed to broadcast a minimum of 76 hours of live coverage across its sports platforms, including Fox Sports 1, of the USGA’s amateur championships and international team competitions.

“The ability for us to showcase amateur golf was really compelling,” Hirshland said.

While no one questions that the USGA will receive a bump in coverage compared to the previous deal, a USGA official didn’t deny that the package pitched by NBC-Golf Channel included as much, if not more hours of live coverage.

On Sunday, the USGA met with NBC and spoke with ESPN via phone, and spent much of Sunday sorting through options until the meeting broke up late in the day. So much progress had been gained on all fronts that it hardly seemed necessary to muddy the waters with a lengthy negotiation. Hirshland told the three interested parties that it was time to lay their cards on the table. Best offers were due by the close of business Monday, Aug. 5. The USGA also made it clear that it intended to avoid such strong-arm tactics as counter offers. It was time to bid with confidence.

The USGA rifled through the offers internally one more time Tuesday.

“It was not apparent that Fox was an automatic winner by any stretch,” Hirshland said. “We had three compelling offers on the table. At the end of the day, when all was said and done, from both a qualitative and quantitative perspective, Fox was the leader in the clubhouse.”

That reportedly includes the most lucrative financial terms. Hirshland continued: “The economics are important, but we had a strong economic commitment from more than Fox. That in and of itself was not the determining factor.”

On the morning of Aug. 7, the USGA convened a meeting of its board of directors, where Fox was crowned the winner.

There were more than $1.2 billion reasons to choose Fox, according to Nager. He noted that although the game is growing in some parts of the world, it has been stagnant at home for more than a decade, and called the Fox partnership part of the USGA’s effort to take fresh approaches.

“It is perception if not reality that the game is not accessible and welcoming,” Nager said. “We are focused on addressing the challenges affecting the game and see Fox as introducing golf to new audiences and bringing fresh thinking in how to present the game to people who are active in other sports.”

Nager said the winners and losers learned their fates later that day, which precipitated a public announcement on the eve of the PGA Championship. A news release disseminated at 6:34 p.m. Aug. 7 stunned the golf and media industry.

“Unfortunately, sometimes news must be made public when it occurs and, indeed, situations frequently exist where news cannot realistically be kept out of the public domain,” said Joe Goode, the USGA’s managing director of communications. “The timing of our announcement was consistent with good organizational practice, a commitment to transparency, and involved a national governance organization and several large media companies whose stocks are traded publicly and applicable to disclosure laws and requirements. The USGA and Fox promptly made public our agreement, just as we made other applicable news throughout the day public. It would not have been proper, nor realistic, to withhold this news from the public in these circumstances.”

Those with long memories may recall that the USGA’s fortunes improved when it abandoned longtime partner ABC and signed a lucrative deal to broadcast USGA championships on NBC Sports in 1994.

“That (deal) was profound and proved to be terrific for the organization,” Hirshland said.

Time will tell if history repeats itself.