SBJ/May 9 - 15, 2005/Media

Finals selling well with 11.0 ratings guarantee

ABC Sports has already sold about 90 percent of its available NBA Finals advertising units, but the network has made an aggressive 11.0 ratings guarantee and held back a large amount of inventory to hedge against a possible ratings shortfall.

The higher guarantee than last year (when it was a 9.5) has helped pricing for a 30-second unit in the Finals inch over the $350,000 mark, which it had slipped below last year. In ABC’s first year broadcasting the NBA Finals, ads sold for $415,000 or more.

A source said the network has fewer than 20 units left for the first five games of the Finals, and has enough deals near completion that it could be near sellout levels in the next two weeks.

A top media buyer said the high sellout levels are in some ways a function of ABC holding back inventory and offering the high guarantee.

Ratings guarantees are generally based on the previous year’s ratings, or sometimes a three-year average. Lifted by the always highly rated Lakers, the NBA Finals registered an 11.5 last year, up from a woeful 6.5 the year before. The three-year average is a 9.4.

Detroit-L.A. averaged an 11.5 rating last year, but the popular Lakers won’t return this year.
With the Lakers not in the playoffs this season, even NBA Commissioner David Stern has said he expects Finals ratings to be lower this time around.

Therefore, the 11.0 guarantee appears somewhat unrealistic, and is largely an intentional play to generate the highest per-unit price possible. This is not unusual for networks, particularly for a championship series. ABC likely anticipates that the guarantee will not be met and that “make-goods” will be supplied to advertisers right away to cover the shortfall.

In one sense, it’s bad news for a network when a program does better than its ratings guarantee, because it means ads were underpriced. Only by placing a high guarantee on a series can a network generate the maximum dollar amount. The downside is that if ratings fall well short of the guarantee, the network has to scramble for make-goods in other programming.

Two years ago, NBA Finals advertisers ended up with units in “Monday Night Football” to make up for the shortfall. This year, ABC is trying to hold back enough inventory within the Finals to avoid that scenario.

TWC NOT LOSING NEW YORK SUBS: Time Warner Cable says it’s not losing a large number of subscribers because of not carrying Cablevision’s MSG Network and Fox Sports New York for the last month and a half. If anything, it’s been the opposite.

“In fact we’re growing subscriber count,” said Fred Dressler, executive vice president of programming at Time Warner Cable.

But it’s a “be careful what you wish for” situation for Time Warner, because next year the roles will reversed.

Time Warner and Cablevision are the two largest New York-area cable operators, and as of next year both will own stakes in regional sports networks.

The New York Mets are on MSG and FSNY, but next year the team will launch its own regional sports network in a joint venture with Comcast Corp. and none other than Time Warner.

That means in less than a year, it’s Time Warner that will be seeking distribution from Cablevision.

If the Mets don’t seem to have the ability to send fans scurrying for satellite dishes to see their games, then Cablevision will have plenty of leverage next year in negotiations with the new network.

In fact, that may have been Cablevision’s strategy all along.

There have been no new negotiations in well over a month between Cablevision and Time Warner regarding MSG and FSNY, and neither side seems to be getting antsy. New York Attorney General Eliot Spitzer tried to broker a deal between the two last fall but has not gotten involved this time around and reportedly has not been asked to by either side.

If Time Warner and Cablevision do work out a deal regarding MSG and FSNY, most expect the Mets network to be addressed in the same agreement. But right now there is no progress on either front.

Andy Bernstein can be reached at abernstein@sportsbusinessjournal.com.

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