Big marketers have been threatening to “Just Say No” to rising sports prices. But as they say in baseball, those advertisers will have to wait till next year. That’s because prices for sports are poised to go up, not down, during the TV upfront selling season, say experts.
As the ultimate reality TV, sports is the one place where advertisers and agencies are confident that consumers will watch their commercials without skipping or time-shifting.
ESPN says 97% of its viewing occurs live vs. 57% for entertainment programming on broadcast networks. Live sports and award shows are the two TV primetime genres most likely to be watched live, says Alana Johnson, VP/Communications for Nielsen. Look for sports to sell at a “premium,” i.e, higher individual prices, during the 2015 upfront season.
“Sports is live, which advertisers like. It engages viewers. There’s a lot of comments on social media about live sporting events,” says Brad Adgate, SVP/Director of Research for Horizon Media. “These are things that advertisers place a lot of importance on.”
Outside of sports, the TV outlook is grim. Overall ad spending is falling, as more companies shift ad dollars from network TV into digital video, mobile and social. MyersBizNet predicts spending on for broadcast and cable TV will fall 9.8% and 5.2% respectively this upfront season. Those losses will be partially offset by double-digit increases in digital ad revenue.
But the bullish outlook for sports in a down market is good news for ESPN/ABC, Fox Sports, NBC Sports, CBS Sports and Turner Sports executives as they roll out their upfront presentations to Madison Avenue media buyers and ad agencies this week.
And tough luck for marketers such as Honda and Anheuser-Busch InBev that have criticized the spiraling price of sports. Or questioned what they’re getting in return for all their investment.
“Sports is still king,” says Mike Sundet, the ex-A-B marketer turned Director of Sports & Entertainment for Momentum Worldwide, which works with clients such as Coca-Cola,American Express and UPS. “Those of us in marketing talk about digital and mobile and social. But TV is still where the big money is. And sports rules TV.”
Of course, sports leagues and networks could still shoot themselves in the foot by eventually pricing themselves out of business.
More TV customers are voting with their wallets and cutting the cord on expensive, sports-heavy cable packages they don’t want or need in favor of cheaper video options. If the trend keeps up, a la carte TV could become a reality.
But the “day of reckoning” that Honda VP Tom Peyton publicly warned about a year ago when fed-up advertisers walk away? That’s a year or two away, at least.