Disney To Outperform TV Marketplace, Given Sports Content
- by Wayne Friedman , April 19, 2021
Although cord-cutting remains a growing problem, Walt Disney should fare well when it comes to advertising revenues in future years, one analyst says, even as other legacy TV networks will find growth hard to come by.
“We forecast overall TV industry advertising revenue will remain flattish, reflecting a continued dynamic …
Ad revenues do not necessarily correlate with profitability---especially when it comes to sports which, often, are loss leaders for those networks that present them. I doubt that the broadcast networks make a profit by carrying team sports, however their stations find such fare to be very attractive in terms of high CPMs charged to local and regional advertisers at virtually no cost for station break spots. As for ESPN, it would be interesting to see an honest breakdown of costs and revenues earned by the channel's team sports presentations as opposed to the numerous lower rated talking head shows the channel airs. I suspect that the latter are far more profitable than the former. Sports is, however, a key element in the evolving business plans of the TV networks. They currently support high retransmission payments from the cable systems and satellite distributors---which account for virtually all of the networks' profits. And they are a major hook---or will be---for capturing subscribers for their new SVOD/AVOD offerings which are intended to be yet another profit center.