SBJ/May 2-8, 2011/Media

Strong NFL upfront sales expected

Despite the threat of work stoppages in the NFL and NBA this fall, TV network executives are expecting a strong upfront selling season this spring — including in the NFL marketplace.

NFL partners, including Fox and ESPN, say they already have started talks with potential advertisers and expect the league’s telecasts to be well sold by early June and could match last year’s record pace.

“It’s business as usual from our perspective,” said Ed Erhardt, ESPN’s president of consumer sales and marketing. “We can’t control what will happen with labor. Advertisers have told us that they are planning to buy the NFL and NBA. We’ve already had conversations about what that should look like.”

The upfront selling season — when advertisers buy annual TV schedules — typically starts in the middle of May. Most business is written in early June and sets the tone for the rest of the year.

The NFL ad sales market, in particular, is an important one for TV networks. NFL games were the highest-rated programming on television last year, with NBC’s “Sunday Night Football” finishing as the top prime-time broadcast show during the last NFL season and ESPN’s “Monday Night Football” finishing as the top cable show. For the past two years, the NFL market has moved before the rest of the overall TV market, essentially setting the pace.

“There’s a lot of money in the NFL market during the upfront buying process,” said Jon Diament, executive vice president of Turner Sports Ad Sales, whose networks do not have NFL games to sell.

One reason network executives are convinced the upfront market will be strong is because inventory in last year’s scatter market was so tight. Advertisers that bypassed the upfront for last year’s scatter market wound up paying 30 percent to 40 percent more for spots in the scatter market, network executives said.

Ad sales are cyclical. When the scatter market is tight, the following upfront generally will be strong. Conversely, when advertisers find deals in the scatter market — as they did during the recession — the upfront market generally will be weak.

“We’re looking at business as usual,” said Neil Mulcahy, Fox Sports executive vice president of advertising sales. “We’re optimistic that things move ahead, and we have to keep moving forward.”

The NFL and NBA labor situations are causing some confusion in the marketplace, but several network sales executives said they are having no problems finding early interest in the games.

Network sales executives say they expected the NFL upfront marketplace essentially to be set by the beginning of June, meaning that there would be only limited inventory in all NFL windows, including Sunday afternoons. They say advertisers still are putting money down on the NFL because they don’t want to lose access to the programming, and are optimistic that there will be games.

Problems will occur if the NFL misses games. Because NFL ratings are so much higher than the rest of TV, it’s impossible to offer make-goods on games that are not played. Sources say the networks are prepared to refund money to advertisers for lost games, sources said.

Some advertisers have talked about hedging their bets by buying time in other fall sports, like college football, MLB’s postseason and NASCAR.

“Nobody is buying in place of the NFL. They are buying to hedge their bet on the NFL,” Erhardt said. “There’s nothing that would lead me to believe that sports would have anything but a very strong upfront.”

Network executives expect the auto category to continue to set the pace for the market. The insurance and telecommunication categories also are expected to stay strong.

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