Nets Score Big On NFL Despite Anthem Worries

Despite the continuing controversy stirred by player protests during the national anthem and a ratings shortfall last season, CBS, NBC, Fox and ESPN have sold about $2.1 billion in upfront advertising for their NFL broadcasts this season that gets underway tomorrow night on NBC, according to buyers and sellers.

The advanced sales, down from $2.2 billion last year, account for about 80%-85% of the total sales. The networks hold back some inventory for makegoods if ratings are bad and for sale at a premium if ratings are good.

Although viewership of NFL game telecasts was cumulatively down by almost 10% last year, almost all advertisers are returning from last season and paying more.

In short, NFL live game telecasts continue to be the hottest programming on television.

“If clients are looking for mass, immediate reach, the NFL is the best way to attain that,” says Neil Vendetti, president of investment at media buying agency Zenith USA.

Adam Schwartz, director of national broadcast, sports media, at Horizon Media, agrees, saying, “On a week-to-week basis, there is nothing as consistent as the NFL for advertisers. Nothing else on TV compares to it.”

As for the issues that continue to linger involving NFL player protests during the anthem, including the networks’ refusal to commit to televising the anthem, both agency and network executives are unanimous that they have not negatively impacted ad sales.

“Our clients are in there because they feel their ads drive their business and nothing has changed that thinking,” Vendetti says. If anthem issues reach a point where they feel their association with the NFL is hurting their business, they will reconsider. “But we haven’t reached that point yet; I don’t see the NFL as a damaged property.”

Dan Lovinger, EVP of ad sales, NBC Sports Group, adds: “All of our advertisers evaluate the NFL telecasts in a variety of ways. But not one advertiser has said they plan to pull out because of the national anthem situation.”

Not only that, advertisers have paid cost-per-thousand increases for advertising for the coming season, despite each of the four TV partners having regular season ratings declines last year. Cumulatively, the network partners’ live game viewership was down 9.7% last season.

Buyers say the networks cumulatively received between 4% and 6% cost-per-thousand price increases, with some networks getting more than that, depending on packages, matchups and night of the week.

Despite losing about 10% of its Sunday Night Football viewership last season, NBC still drew 18.2 million viewers per telecast, making it once again by far the most-watched programming on television. And its 6.1 18-49 demo rating led all TV programming for the 10th consecutive season.

NBC no longer has Thursday Night Football, which it shared with CBS last season and which was taken over by Fox for the next five seasons. So NBC has had less ad inventory to sell for this season.

Still, Lovinger says the network beat its sales projections for Sunday night.

“We had less product to sell, less inventory, so we were careful about how we sold that advertising,” Lovinger says. “We tried not to turn any of our returning advertisers away before we sold to any new advertisers. But we did bring a handful of new advertisers in. And because of tighter inventory levels we were able to charge more.”

Fox, which paid the NFL some $3.3 billion for a five-year deal to televise the 11-game Thursday Night Football schedule, has had a huge amount of additional ad inventory to sell, but has also reached its sales projections.

“We now control north of 40% of all the NFL ratings points, so it was a great challenge for us to sell all this additional inventory,” says Mark Evans, SVP of ad sales at Fox Sports Group.

Fox was able to charge premium pricing for its Thursday night telecasts for several reasons, and ad buyers say they had little choice but to pay it.

“Fox put a premium on Thursday night ad pricing and they wouldn’t budge,” one buyer acknowledged. “They had a ‘take it or leave it’ attitude, and most advertisers took it.”

Thursday night is a key night for ad categories like retail, movie studios and automotive, who all want to reach customers going into weekends. They also happen to be three categories that traditionally spend large amounts of dollars in NFL telecasts.

What helped Fox sell lots of additional ad inventory, Evans acknowledges, is that last season NBC and CBS shared the Thursday night package and were selling ads against each other. Buyers were able to play one against the other to keep prices at more of a minimum.

This year, Fox is the only game in town and could take a harder line.

Fox’s new Thursday Night Football package also opened up the opportunity for new sponsorships.

“Our Sunday football pre-game, halftime and OT sponsors have been the same for years — Ford, Visa and Lowe’s,” Evans says. “The new Thursday package has allowed us to sell new sponsorships. Verizon is the pre-game sponsor and Toyota will sponsor the halftime show.”

Verizon, according to iSpot.tv data, was the NFL’s largest ad spender last season, allocating $145.8 million to NFL game telecasts, across all the network rights holders. Toyota was the third largest NFL ad spender, spending $88.5 million.

Other big spenders, all of whom will be back this season are Geico, which spent $115.2 million last season on the NFL, according to iSpot.tv; Apple iPhone ($80.8 million); Samsung Mobile ($75.9 million); Southwest Airlines ($75.9 million); Ford ($70.4 million); Walmart ($70.2 million); Chevrolet ($67.6 million); and Bud Light ($65 million).

Evans says heading into the season, Fox has sold between 85% and 90% of both its Sunday Night Football and Thursday Night Football inventory.

“Our priority was to push Thursday night because we had all this new inventory to sell, but we have met our revenue targets for both,” Evans says.

John Bogusz, EVP of sports sales and marketing at CBS, says his network has been getting “mid-single digit” CPM increases for its ads and it is at a sellout level comparable to last season at this point.

ESPN, according to media buyers, was more aggressive in its sales approach this season, choosing to offer ad discounts for packages across its platform for advertisers who bought into Monday Night Football at higher prices.

Wendall Scott, SVP of multimedia sales at ESPN, did not discuss specific pricing, but says the network did sell more MNF ad units and has taken in more ad volume this year heading into the season.

“Our goal was to sell more MNF units and we did,” he says, adding that “we also sold more around the game sales,” including ads in fantasy football programming and other NFL shoulder programming.

Scott says the network is particularly excited about its new MNF broadcast booth team that includes veteran play-by-play announcer Joe Tessitore and future Hall of Famer and former Dallas Cowboys tight end Jason Witten. They are also being joined by former NFL defensive lineman Booger McFarland.

While ESPN averaged the lowest NFL game audience last season with 10.7 million viewers per game, that total still was large enough to win all 15 Monday nights on cable in total viewers and key male demos. Those NFL telecasts also outdrew most broadcast network entertainment programming throughout the week.

Some media buyers say during NFL negotiations they pushed for and got concessions from the networks regarding the lowering of ratings estimates.

Traditionally during upfront buying, both for entertainment and sports programming, the networks inflate ratings estimates which means buyers have to pay more initially for ads.

If those estimates are not realized, then the networks have to give audience deficiency or ad makegoods to advertisers. But the networks already have that money in the bank.

Some buyers say they agreed to higher cost-per-thousand pricing levels with those networks because they reduced their ratings estimates for the game telecasts.

Says one network sales exec: “We always try to sell based on the highest ratings estimates possible so we can take in more upfront dollars, while the buyers push for lower estimates so they have to allocate less. It’s part of negotiations.”

If the networks do reach their ratings estimates, they will be able to sell the ad inventory they held back because of potential makegoods. And that could be a windfall for the networks, because that usually happens later in the season, when matchups become more important and the demand for advertising could be higher.

So both the buyers and sells could benefit.

Another reason why advertising for NFL games continues to be strong, despite declining ratings, is that more marketers see value in trying to reach women watching football.

“More clients are considering the NFL to reach women,” says one agency buyer, “because the NFL reaches more women than most regular primetime entertainment shows.”

NBC’s Lovinger agrees: “We’re seeing a lot of advertisers who are now seeing the value to reach women through the NFL telecasts. We have had hundreds of conversations with advertisers over the past few years, particularly as female demos wane in entertainment programming. Women are still watching the NFL and we’re seeing more advertisers interested in reaching them.”

Network execs say automotive advertisers, among the biggest spenders in NFL telecasts, continued to increase ad spending for the coming season, as did retailers, insurance and financial companies.

And another category where spending increases are being seen are digital streaming services like YouTube TV and Amazon TV.

The networks also have obtained the rights from the NFL to stream their linear game telecasts via mobile phones this season, so that is another area where ads will appear.

Viewers will also see more split-screen advertising this season as each of the networks will run a certain amount of commercials on one half of the screen, while keeping the live coverage on the other.

A lot of that will happen when there is a challenge to a referee’s call that might take a few minutes to resolve. Instead of taking a complete break to run commercial in a pod, the networks will run one or two commercials on the split screen.

Pricing for the split screen commercials will be the same as traditional spots.

Agency buyers are positive about them.

“No one wants to see 100% of their ads during a telecast run split-screen, but one ad out of four is acceptable,” one buyer says.

While the ads in a split screen are smaller in size, because the live game telecast is filling the other half of the screen, more viewers will tend to stay in the room rather than leaving during the commercial break.

The NFL season opener on NBC has the Atlanta Falcons visiting the Super Bowl Champion Philadelphia Eagles. Last year’s Thursday night season opener on NBC between the New York Giants and Dallas Cowboys drew 24.3 million viewers, up 6% over the previous year, with a whopping 9.1 18-49 demo rating.