Sources: Fox Losing Money On World Cup, Providing Make-Goods
Fox is "expected to lose money" on the '18 FIFA World Cup, as the network "hasn’t been able to deliver the audiences it guaranteed in ad deals, forcing it to provide additional ad time -- 'make goods' -- as compensation to some advertisers," according to sources cited by Flint & Vranica of the WALL STREET JOURNAL. Sources noted that when the USMNT "failed to qualify, Fox cut its production budget significantly and adjusted its ratings estimates for advertisers." Meanwhile, sources said that Telemundo also "won’t show a profit" for its first World Cup. But Telemundo execs said that its ratings are "new highs for the network." Telemundo Deportes President Ray Warren: “The World Cup is Broadway, it gets you noticed." Sources said that both Fox and Telemundo are "roughly 7% to 10% below the ratings they projected for advertisers." But SoFi CMO Joanne Bradford, whose company has advertised during the World Cup, said that she knew the tournament was a "'ratings risk' but is pleased with how the online lender’s ads have performed." Flint & Vranica write the lower ratings for the event suggest that the growth in soccer’s popularity in the U.S. in recent years "doesn’t translate to TV viewing unless the national team is involved." The lower viewership is also a reminder that "big-ticket sports media deals, seen as among the safer bets in a pay-TV industry buffeted by viewership fragmentation and cord-cutting, can carry risks" (WSJ.com, 7/11).
LAST CALL: ADWEEK's Jason Lynch noted while ratings are down, the World Cup is "on track to be an ad revenue success" for Fox. The net "expects to top ESPN and ABC's U.S. TV ad spend" for the '14 World Cup in Brazil, which was estimated at $187M. There are just two ad spots left for Sunday's final, with spots "going for as much as $700,000." Fox said that this is the "highest unit cost for a soccer game in U.S. history." The semifinals "sold out," and Fox is "looking to sell the last two units for the final without a ratings guarantee." Fox Sports Senior VP/Ad Sales Mike Petruzzi said, "We're trying to hold out for the highest offers possible once the matchups are set on Wednesday," especially if England and France make the final (ADWEEK.com, 7/10).
LOOK TO THE FUTURE: AWFUL ANNOUNCING's Jay Rigdon writes Fox' "long-term gambit is probably going to pay off, thanks to FIFA offering them the 2026 World Cup for very little, possibly in exchange for Fox not suing over the 2022 Qatar tournament being moved to the winter." That World Cup is going to be contested in North America and mostly in the U.S., "meaning it’s a very valuable property, and even after Fox pays FIFA a bit extra, it’s probably going to be a very big win for them" (AWFULANNOUNCING.com, 7/11).