2023 National TV Ad Spending Projected To Sink 4.4%

National TV advertising revenues will sink 4.4% this year -- a steeper drop than forecast in a previous projection, says S&P Global Ratings.

It estimates broadcast TV will sink 5.2% with cable TV networks losing 4%.

Broadcast TV’s bigger decline comes from the lack of Olympics programming this year compared to 2022 Olympics advertising results, which pulled in $1.1 billion.

The softer scatter market is a bigger factor.

“Our 2023 forecast assumes that the scatter market, in which advertising is sold on a real-time basis, remains choppy until the start of the 2023/2024 TV season because there isn't any key sports or other must-watch programming to draw in viewers until the start of the NFL season,” writes Naveen Sarma, credit analyst at S&P Global Ratings.



At the same time, for cable TV networks, the lack of added sports programming will contribute to accelerated viewership declines.

“Cable's weakness will result from rapidly declining audience ratings, which is putting downward pressure on inventory prices,” says Sarma. He believes “cable networks have limited ability to reverse this trend” due to the lack of sports programming available to those networks.

Local TV core advertising will fare a bit better than national TV ad revenues.

“We raised our 2023 core advertising forecast by 200 bp to a 3% decline. While we expect local TV advertising will decline during a recession, we expect the industry will benefit from easier year-over-year comparisons as the year progresses due to a meaningful crowd-out from political advertising in the second half of 2022.”

Sarma says some local TV broadcast groups “underperformed their political advertising expectations in 2022,” when budgets were shifted due to “more mobile PAC money” -- even as the overall TV stations marketplace experienced a record year in midterm political election spending.

Better results, says S&P Global, come from the expectation that local TV will see growing benefit from the resurgence in automotive advertising as car inventory continues to build. prior to the pandemic, the automotive category contributed 20%-25% of advertising revenue to local TV stations.

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