The NFL just got some very bad news from some key partners which is to be expected when politics are forced into sports.
The NFL’s ratings continue to plummet and with no bottom in sight networks are doing the unthinkable – giving price discounts to advertisers.
The NFL usually delivers ratings gold and networks can command huge fees from advertisers and the NFL can in turn demand huge fees from the networks for showing the games.
But that symbiotic and very profitable relationship may be over soon. “Even as surefire as the NFL has been—and the last couple years, NFL ratings stood up much better than network prime-time ratings—we are now in a situation where the NFL is declining,” said Gibbs Hajun, investment lead at WPP PLC ad-buying firm Mindshare.
“We’ve worked with every one of our partners individually to find what works best for them,” an NBC Sports spokesman said.
“We will have delivery solutions for all of our NFL advertisers this season,” he added.
TV networks are feeling the strains of disappointing NFL ratings, as they are forced to restructure deals with advertisers to make up for the smaller audience, and their opportunity to make money off remaining games during the lucrative holiday season narrows.
NBC made the unusual move of lowering the price it charged advertisers that already had committed to run in a Baltimore Ravens vs. Pittsburgh Steelers game planned for Thanksgiving night after a Covid-19 outbreak on the Ravens forced the game’s postponement to the following Wednesday.
Some networks also have considered letting advertisers pay less for commercials during NFL games and other programming than they originally pledged.
Meanwhile, a large amount of the remaining commercial time available in games is being given to marketers as compensation for the underperformance so far, leaving little ad time that can be sold in the final quarter of the season.
Such so-called make-good commercials are given if a network underdelivers on the audience it promised an advertiser.
NFL games provide TV’s most in-demand and expensive ad inventory, because they regularly gather the largest live audiences at a time of increasing audience fragmentation.
But this year, NFL ratings have taken a hit as pandemic-related postponements have pushed some games to less desirable times and the coronavirus has sidelined some star players.
Unexpected competition from other sports leagues whose seasons were delayed from earlier in the year also has taken a toll on ratings.
Last NFL season, not including the playoffs, networks that broadcast the games generated $3.6 billion in TV ad revenue, according to Kantar.