The recent decline in ratings for the NFL caught up to broadcaster ad revenues in November, according to Standard Media Index.
In all, year-over-year declines in November had revenue down 18% for CBS, 5.8% for NBC, 14.5% for Fox and 7.6% for ABC. Total NFL ad spend fell 26% across all four broadcasters. The good news, though, is that excluding football, broadcast ad revenue rose 0.8%.
SMI attributes the fallout in part due to four fewer football games last month as compared to November 2015, affecting gross spend. But the real culprit has a rise in makegoods broadcasters had to pay back after advertisers didn’t receive guaranteed impressions.
In particular, NBC was down 17% in football revenue, while still having the same amount of games and seeing a 10% rise in average ad unit cost, because 20% of its inventory was given back as makegoods. CBS also had to deal with nearly 20% of inventory in makegoods.
For all of November 2016, the overall TV market was down 2.4% annually. Broadcast spend fell sharply by 10.6% but cable grew 6.3%.
“November was a fascinating one for the sector with a lot of moving parts. The final days of election coverage, a challenging football season, and a revitalized retail sector all contributed to the market delivering a modest gain,” said James Fennessy, CEO of Standard Media Index, in a statement. “Poor football ratings earlier in the season, combined with fewer games this month, finally caught up with the major broadcasters whose revenue dropped more than 10% in November as they were forced to give inventory back to advertisers. Without sport the major networks were slightly up as major retailers moved big money back into TV after some questionable experimentation with digital last holiday season.”
The NFL’s negative impact on broadcast TV ad revenues comes just months after the league was still enjoying rising ad rates in spite of the ratings slide.
According to Standard Media Index’s numbers for September, the average 30-second spot among networks showing NFL games in September was $489,193, up 4% from the same period last year and up 10% from 2014.
“Our new cost level data clearly shows that while ratings on football have been under pressure early in the season, average unit costs continue to increase. This demonstrates that live sport and the huge audiences it attracts are an outstanding drawcard for major brands,” Fennessy said in a statement.