NFL ad sales ‘soft’ with single-digit percent increases predicted

The NFL ad sales market is as soft as it’s been in years, according to several ad buyers. That doesn’t mean that they expect to find a bargain, though.

When ad buyers say that the market is soft, they actually mean that they expect to pay single-digit percent increases this season, a rate that would be considered robust in the rest of the television industry. Compared with the double-digit increases advertisers have been paying in previous years for NFL inventory, single digits seems like a deal.

For the record, network ad sales executives say they have not set official prices yet for the fall season, and ad buyers

typically like to portray the ad market as soft in order to gain negotiating leverage. But most executives in the business are preparing for NFL ad sales to be priced at a mid-single-digit increase from last season.

At a time when advertisers are fleeing most entertainment programs in droves (various reports predict as much as a 10 percent drop in television’s upfront ad-selling season), the NFL lumbers on as the most sought-after programming on television. It seems like sports — the NFL, in particular — is the only genre generating ad sales increases on TV these days.

“I want to be careful about describing it as soft because it’s all relative,” said Adam Schwartz, director of national broadcast, sports media, for Horizon Media. “Compared to some of the things that we’re seeing in the general marketplace, the NFL is a whole different ballgame. This was the first time that we saw modest increases in the NFL, as opposed to some of the exorbitant ones that we’ve seen in years past.”

The NFL’s popularity among ad buyers offers further evidence that the NFL shield is made of Teflon. The league’s Ray Rice and Adrian Peterson problems are having no effect on the business this year. Concussion lawsuits, Roger Goodell’s approval ratings, Deflategate — seemingly no bad-news story can scare TV advertisers away from NFL games.

It’s easy to see why. NFL games provide the biggest and most consistent audiences on television. Entertainment viewers are migrating away from television to companies like Hulu and Netflix, but the NFL’s audiences are sticking with their big screens.

“In live sports, audiences generally haven’t left traditional media,” said Tom McGovern, president of Optimum Sports.

The NFL’s TV audiences were relatively flat last season — CBS, ESPN, Fox and NBC saw slight decreases in viewers. Across all the networks (including CBS’s new Thursday night package), the NFL averaged an audience of 17.6 million viewers per game, flat with 2013, and well above any other genre on television.

NBC expects to sell more than half of its “Sunday Night Football” inventory by next month. Photo by: Getty Images

NBC’s “Sunday Night Football,” which has been television’s top-rated prime-time series for several years running, has the most expensive ad sales inventory, more than $600,000 per 30-second spot, ad buyers said. That’s followed by Fox’s Sunday afternoon schedule and CBS’s “Thursday Night Football,” which comes in around $500,000 to $550,000.

NBC expects to sell more than 50 percent of its “Sunday Night Football” inventory by next month and have 85 percent to 90 percent of it sold by the middle to end of the summer, said Seth Winter, NBC Sports Group’s executive vice president of sales and marketing.

“We are walking into the season with a pretty healthy level of commitment already,” Winter said. “We’re very much engaged now with a lot of our sponsors around renewals.”

Ad buyers say the biggest reason for the relative softness in the NFL marketplace is the addition of CBS’s “Thursday Night Football,” which averaged 16.7 million viewers in 2014 despite several blowouts. CBS’s viewer average catapulted “Thursday Night Football” into the NFL’s second prime-time slot, behind “Sunday Night Football” and ahead of “Monday Night Football.”

It’s not just “Thursday Night Football.” The NFL launched an over-the-top service called NFL Now last year that has attracted advertiser interest. Sports channels like ESPN, Fox Sports 1 and NBC Sports Network produce tons of NFL-themed shoulder programming.

Even YouTube is getting into the act, asking marketers to commit at least $10.5 million for 15-second pre-roll ads to

The NFL Now over-the-top service is among the programming giving ad buyers more choices.

run with NFL content during the season, according to a report in The Wall Street Journal last month. In January, the NFL reached an agreement with Google to launch a league-branded channel on the site.

Clearly, having more inventory in the NFL ad sales market has given ad buyers more choice on where to invest their money.

“It’s good for advertisers because there’s a lot more out there,” said Schwartz, who lists Geico, Capital One, Burger King, Corona and Buffalo Wild Wings among his clients. “I keep wondering if the NFL is ever going to get to that tipping point. I don’t think we’re there yet, but we’re definitely getting closer.”

Ad buyers say that too many gross ratings points for NFL programming have flooded the market, but network ad sales executives dismiss that complaint as a red herring designed to give ad buyers added negotiating leverage.

NBC says “Sunday Night Football” was virtually sold out last year, and Fox Sports said it wrote more business against the NFL last season than in any other year previously.

“The buy-side of the marketplace tried to use it as a lever to have us compromise the value that we have in ‘Sunday Night Football,’” Winter said. “Everyone said that there are all these extra ratings points, and they were trying to use it as a negotiating mechanism in our conversations.”

Fox Sports’ executive vice president of ad sales, Neil Mulcahy, agrees.

“Every year, our NFL grows at a pretty good pace,” Mulcahy said. “While there might be a little bit more Thursday night, it’s not hurting the NFL market. More advertisers are joining the NFL.”

Still, ad buyers describe an environment where they could buy time in regular-season NFL games across the board last season — a situation that would have been unthinkable a few years ago.

ESPN typically is the first network to sell out its NFL games because its cable and satellite affiliates get some of its inventory to sell.

“We look at the NFL across multiple screens,” said Ed Erhardt, ESPN’s president of global customer marketing and sales.

While the NFL is pacing along, the glut of regular-season inventory is hitting the regular seasons of other sports properties, like college football, college basketball, the NBA and NHL, several ad buyers and ad sellers say.

The amount of regular-season ad sales inventory in these sports is keeping key sports advertisers from committing early, opting to wait and buy closer to the event. In years past, the upfront selling season generally has been more of an entertainment play than a sports one. This year is no different.

“If you have the SEC, that’s one thing. But if you have other lesser conferences, there is no urgency to that,” Winter said. “With college basketball and college football, there’s probably an overabundance of that content. The lesser valued parts of that content will receive less attention, worse pricing, less consideration than ‘tier 1’ content within those properties.”

The glut of regular-season games has pushed Turner Sports to develop its pitch around its postseason games.
Fifty-five percent of the sports on Turner channels is postseason — NBA, MLB and NCAA tournament, said Jon Diament, Turner’s executive vice president of ad sales and marketing.

“There’s so much supply out there for the sports market and the entertainment market,” Diament said. “There’s some economic pressures on supply and demand.”

It’s the big events that are drawing the most interest, like the Super Bowl, which CBS is selling for a record high rate of $5 million per 30-second spot. Each network boasts of marquee events that they can use to draw advertisers into the fold. Those big events are doing better than ever. The NCAA tournament, for instance, saw a double-digit revenue increase this season, according to John Bogusz, CBS Sports’ executive vice president of sales and marketing.

“The sports marketplace has been holding up very well,” he said.

Both sides of the ad sales equation describe the sports market as much healthier than the ad sales market for entertainment and news.

“Overall, the sports marketplace is probably healthier than the general market,” Schwartz said. “Big events overall are still commanding considerable advertising interest. The ratings are showing it. Sports as a whole is definitely a strength within the overall marketplace.”

Across the board, executives describe the auto and movie studio categories as particularly robust, as are some quick-service restaurants.

“Live programming, especially sports, is the one property that resonates most with advertisers,” Winter said. “It’s the most predictable. It has the highest quality audience against any number of criteria. There are pockets within the marketplace that are better than others. But overall, it’s very, very healthy.”

It’s not just television where sports ad sales is doing well, Erhardt said. Almost all TV ad sales deals these days carry a digital component.

“Technology has been disruptive in most of the market, but it’s made sports better,” Erhardt said. “Sports in terms of ratings, usership and impressions is growing significantly faster than the rest of the marketplace.”