Commentary
Even With Viewer Declines, Nets Pay Big Bucks For Sports
- by Wayne Friedman , Staff Writer, November 3, 2017
The Houston Astros' defeat over the Los Angeles Dodgers after seven games that were mostly close and competitive came with high World Series viewing numbers.
There was also history here: Houston has never won a World Series in its 55-year history.
While achieving great results — a Game Seven average 28.2 million viewers on Fox — it could not beat results of the year before. That’s when the Chicago Cubs came from a three-games-to-one deficit to beat the Cleveland Indians. More importantly, the Cubs had not won a World Series in over a century — a bigger storied franchise.
And just like last year, Fox dominated TV viewing with the World Series for the better part of a week. How could you turn away from that?
Even with declines across many TV programming areas — including the NFL, which has seen some viewing falloff this year — TV networks are still paying high-priced billion-dollar renewals of big sports franchises.
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In 2022, the NFL will be renewing all its packages with TV networks. For many, digital media platforms will be even more important to the league, especially for “Thursday Night Football” — CBS shares it with NBC — and “Sunday Night Football,” which runs on NBC.
During a recent earnings call, chairman/CEO of CBS Corp. Les Moonves said CBS will be in the hunt again. “Digital rights will be an important part of it. We expect larger players to be involved. Who knows? We may get all the digital rights ourselves.”
Is that how TV networks look to monetize their ever-higher NFL license fees?
TV networks — despite ratings declines — have found ways to raise ad revenues (and retransmission fees) to support their ever-higher sports programming appetite.
But one network might blink.
One columnist believes that ESPN may need to drop out of the big NFL programming race as a result of a tougher financial situation. The cabler has had issues over subscriber losses as well as overall revenue declines.
ESPN’s eight-year, $15.2 billion deal for “Monday Night Football” ends in 2021. ESPN still averages around 11 million viewers a week for the series, easily the top-rated programming series on cable — and a big competitive performer for all of TV.
Bottom line: How would ESPN replace those 11 million viewers — and the advertising dollars it brings in?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
It seems only fair. Advertisers pay higher prices to reach fewer targets.
Wayne, all bubbles must eventually burst, and it will happen with the sports rights bubble. It's only question of which league will suffer first. But they all in the end will. If the NFL continues on its downwards rating track, that, along with health issues and player protests, will ultimately mean lower fees. Whether it happens in 2022 or later is tough to predict, but it will happen.
Wayne, as I'm sure you realize, sports is not only about the ratings or, for that matter, the demos, it's mostly about the image ---which is why for the foreseeable future the TV networks will continue paying the big bucks and so will the advertisers. That may eventually change as the players and team owners get greedier and greedier, but that "sea change" is a ways off.
Total agreement with Ed except for his timing. That "sea change" is a ways, ways, ways off. Just because ratings drop in broadcast media doesn't automatically signal a drop in ad rates. Average Quarter Hours in most demos are all down over radio in the last 20 years but new media as in digital and social will make up for those losses. Even then radio is more involved in promotions for brands, product integration and event marketing to support ad buys.
Television is in the same boat. Sports leagues and networks will find alternative ways to monetize their brands even as ratings slip. The NFL and the NBA as Ed states provide an image for those partner networks 24/7/365. And networks will take advantage of those partnerships. One example is creating new content. TNT's 'Players Only' basketball broadcasts is a prime example of networks coming up with new and unique ways to monetize their broadcasts and it's great television for basketball junkies like me.
Anyone that thinks Roger Goodell or Adam Silver are going to lower the value of their leagues is kidding themselves. That's not going to happen. Creatively they will find ways to increase the value of their brands and advertisers will continue to pay more.