Completed Pass Or Dropped Ball, Sports CPMs Keep Going Up

by Wayne Friedman, Oct 1, 2012, 1:54 PM

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Many of the NFL's actions over the past several weeks may come down to one observation by TV media buyers: The cost per thousand viewers of sports TV, or CPMs, will grow.

The consensus is that the sports CPM will continue to increase and distance itself from other prime-time programming. For marketers, the positive is that sports seem to defy overall rating erosion; they’re live and, more than other programming, give advertisers big broad audiences rather than smaller, harder-to-plan-for, niche audiences.

The biggest evidence of this is the continued rise of the price to be in the Super Bowl -- now at some $4 million for a 30-second commercial.

The NFL's way of thinking? Quite possibly, its executives read the same TV analysis -- that the sky will never fall. Recently, there were record TV rights deals from ESPN, Fox, CBS, and NBC. Then came the referee contract dispute.

Ratings didn't sink for games because of bad referees. And the thinking was that the NFL owners weren't going to cave. But then the ultimate bad refereeing for the Green Bay Packers/Seattle Seahawks “Monday Night Football” game occurred.

The NFL then seemingly made a quick deal with the referees because of what might come down the road: a lower brand value.

The devaluing of a brand, especially a sports brand, doesn't happen overnight. But if the replacement refs had stayed in place, as the owners really wanted, viewers would have gotten more pissed and then moved to a phase no marketer wants to see: apathy.

Some ESPN commentators said some NFL players were at this stage already -- a shrug of shoulders. It was as if they were saying, "It doesn't matter, I still get paid." 

That still wouldn't have been a problem, except when that attitude would transfer to a bigger stage, with more marketing spin. For its own part, ESPN commentators were ripping the league for three days after the "Monday Night Football" game.

There's bad press -- and then there is bad press. When you spend as much time talking about the referees' bad calls as about the game itself, well, you have problems.

From all of this, one glaring TV result came: the ESPN "SportsCenter" broadcast following the dramatic Packers/Seahawks game gave the sports highlight/analysis show its highest-ever ratings -- an unheard of 6.5 million viewers.

So will ESPN be getting high future CPMs because of this? Yes -- but ESPN was going to see NFL ad price growth anyway.

Some are still waiting for the day when the expensive Summer or Winter Olympics on NBC will crash and burn like the rest of big-time TV entertainment programming.  Some critics say the Olympics have added way too many sports; some say too much marketing is involved.

Lower ratings? You might have to wait a bit longer, especially after observing record viewership this past summer.

As much as some leagues and sports franchises might try hard to mess up big-time sports on TV,  marketers will continue to pay a high price.

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