Marketers Invest $2.5 Billion in NFL Telecasts

With the start of the National Football League season just a week away, the league’s four major TV networks partners have already cumulatively sold north of $2.5 billion of commercial time, according to sources familiar with the negotiations.

So strong are NFL football telecasts in the minds of marketers, that each one of the networks has sold more inventory than last season, at higher prices, and that’s despite advertisers having spent some $1.2 billion on NBCUniversal’s 17 days of Summer Olympics coverage this month.

Sports ad sales executives at CBS, Fox, ESPN and NBC interviewed by B&C all agree that Olympic ad spending had no negative impact on NFL ad sales. Olympic advertisers who also advertise in the NFL, these execs say, simply diverted money from non-sports entertainment programming to keep their level of NFL spending equal to or greater than last season.

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Making the networks’ NFL ad sales take so far even more impressive is that they had to overcome a cumulative loss of about $150 million in ad spending by daily fantasy sport companies DraftKings and FanDuel, which poured money into each of the networks the first two months of the NFL season last year. Neither has committed any ad dollars for this season so far, but the networks say negotiations are taking place and scatter ad packages from both could be worked out once the season starts.

“NFL ad sales have been blockbuster again this season,” says Neil Mulcahy, executive VP of Fox Sports ad sales. “Even without DraftKing and FanDuel ad dollars we’ve blown past last year’s ad dollar totals heading into the season.”

Eric Johnson, executive VP of global multimedia sales for ESPN customer marketing and sales group, says, “Demand for NFL advertising is as strong as I’ve ever seen it.”

Seth Winter, executive VP, sales and marketing for NBC Sports Group, says, “NFL ad sales continue to be extraordinarily healthy. With the ongoing deterioration of ratings points in the entertainment TV space, the NFL continues to withstand the migration of viewers to other platforms away from television.”

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And one sports media buyer, who did not want to speak for attribution since his positive comments could hamper his negotiating position, says, “The NFL is the best television property out there. It’s a better bet than any entertainment show in primetime.”

In recent years, the league has faced issues that some pundits predicted could dent its TV appeal, including off-field crimes by athletes and the still-roiling debate over concussions. But any decline has never materialized. The surge in interest this season, execs and buyers say, is due to a couple of specific marketplace factors. First, pharmaceutical companies, not traditional heavy NFL advertisers, are buying ads across all the networks. Also, and the nation’s largest retailer, Walmart, is significantly boosting its NFL ad investment.

Every one of the four TV networks carrying games says new pharmaceutical advertisers have bought ad time in their NFL telecasts. NBC’s Winter says one reason is that there are lots of new prescription drugs on the market and the companies need to promote them. But rather than primarily doing it in nightly news telecasts and reaching only an older demographic, they are choosing to market to a broader based audience.

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“When you want to get word out about a new product, there is no better way to reach more than 20 million people than through an NFL telecast,” Winter says. “The pharmaceutical companies are recognizing that.”

While automotive will again be a backbone category for NFL advertising on all the networks, other categories where companies have bulked up their NFL ad buys include telecom/wireless, insurance and financial, QSRs and retail, particularly with two more primetime games on Thursday night and a new package splitting five games each between CBS and NBC.

Walmart has advertised in NFL telecasts before but has increased spending for the coming season significantly and purchased some sponsorships. The retailer will be sponsoring the NFL Kickoff pregame show on Fox from 11 a.m. to noon, and sources say they will also have a heavy presence in CBS’ Thursday night telecast.

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While CBS televised eight Thursday Night Football games last season that were simulcast on NFL Network, this season CBS will televise five and NBC will televise five, with the NFL adding two more games to the broadcast package and bringing NBC on board. This week, CBS Sports chief Sean McManus told reporters that the tri-cast on Thursdays would not hurt CBS ratings.

While the networks wouldn’t discuss unit pricing for NFL ads, except for NBC’s Winter saying his network charged $560,000 for a Thursday night unit, media buyers, speaking on condition of anonymity, were more forthright as to what they paid.

Winter acknowledges that NBC took a hard line on the $560,000 per unit price and wouldn’t budge. “NBC wouldn’t budge,” a sports buyer agreed.

Buyers say they paid about $450,000 for Thursday night units with CBS with one buyer explaining, “NBC was able to get more for their units because they have games during the back end of the season in weeks 13 through 16 during the holiday shopping season when a lot of different advertisers, particularly retailers, are looking to reach a mass audience on Thursday night before the weekend.” CBS averaged 13 million viewers for its first half of the season telecasts last year.

NBC, according to buyers, averaged about $675,000 for a unit on Sunday Night Football. NBC averaged 22.5 million viewers for its SNF primetime telecasts last season, up 6% from 2014 and the best ever average for SNF on NBC.

For the Sunday afternoon games, buyers say CBS averaged about $600,000 for the 4:25 p.m. national games, while Fox averaged $700,000. For the 1 p.m. regional games, CBS and Fox sold units between $350,000 and $500,000.

As for price increases compared to last season, the networks got hikes of between 7%-9%, according to buyers, although Winter put the NBC price hikes at “low double-digits.”
Buyers say ESPN got a lot of interest because this season, rather than selling and inserting different ads into its simulcast WatchESPN streams of NFL games, it is running the same ads online as on the TV telecasts. (On-air promotions have also been amped-up, urging linear viewers to "stream" and "binge" football via the authenticated TV Everywhere WatchESPN app.) That doesn’t change the way the cumulative audience is measured, but it does change how the ads are sold or priced.

Buyers said they like the system of buying one set of ads to appear on both and paying for them together rather than having to buy TV ads and digital ads separately and at different pricing. This season the WatchESPN audience is built into the TV rate.

ESPN’s Johnson says marketers also like the new system because the OTT audience on the app is young, highly educated, multicultural and has a high median income.

Just about all of the sponsors of pre-game, halftime and post-game shows are back for each of the networks. Johnson says every marketer who had a major sponsorship position in the MNF telecasts and surrounding programming are back. For Fox, Ford returns as the sponsor of its NFL on Fox show from noon to 1 p.m. Visa returns as halftime sponsor and Lowe’s is back as sponsor of the post-game The OT show.

Not only have NFL ad sales been strong but so have college football ad sales for the four networks. CBS televises SEC games and John Bogusz, executive VP of sports ad sales at CBS, says with Alabama predicted to again be in the national championship hunt, the CBS college football ad inventory is “extremely well sold.” Winter says NBC’s Notre Dame football telecasts are also solidly sold and ESPN’s Johnson described his network’s college football ad sales as “strong.”

Regarding Super Bowl sales at Fox, Mulcahy doesn’t say much except that “sales are pacing well and conversations are heating up.” He adds that he expects selling for the Super Bowl to “pick up in earnest in September.”

As for fourth quarter sports sales overall at Fox, Mulcahy says, “NFL, college football and the World Series is combining to make this our best fourth quarter ad sales ever.”

Mulcahy says there has been extra interest in World Series ad units, as well as the National League Championship Series, which Fox televises this season. “We had a strong upfront for World Series and playoff ad sales this year,” he adds. “Now we have the Cubs, who have a big national following and for the World Series, the Red Sox and Yankees are still in the playoff race. Those are major market teams with big fan bases.”