Sluggish ad sales for big sports events

Marketplace Staff Sep 1, 2009
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Sluggish ad sales for big sports events

Marketplace Staff Sep 1, 2009
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TEXT OF INTERVIEW

Kai Ryssdal: The world’s biggest advertiser pulled out its checkbook again today. Just a couple of weeks after announcing a big deal with the National Football League, Procter & Gamble said this morning it’s going to become an official sponsor of U.S. athletes at the 2010 and 2012 Olympic Games. Great news for the U.S. Olympic Committee. And possibly for the networks that carry the games, and other high-profile sporting events too. John Ourand covers media for the Sports Business Journal. John, good to have you with us.

JOHN OURAND: Thank you, Kai.

Ryssdal: Obviously Procter & Gamble, as I mentioned, is shelling out a lot of money to support the Olympics. The networks though are shelling out a whole bunch more. How are they doing in terms of recouping some of that ad sales?

OURAND: For the Olympics, the networks aren’t doing that well. NBC holds the Olympics, this Procter and Gamble deal is really huge news for them. One of the problems that NBC is having is that the International Olympic Committee and the U.S. Olympic Committee don’t have a lot of corporate sponsors that are also taking a lot of media buys. And that’s what really drives the ad market on TV. In fact, there are Olympic sponsors like Allstate and Acer. They’re official Olympic sponsors, but they’re not planning big media buys and that is a huge source of frustration for NBC.

Ryssdal: On to the other major sporting event of the next six to eight months that are going to be on television, the Super Bowl. How are ad sales doing there?

OURAND: The Super Bowl is doing a little bit better than the winter Olympics. It’s doing much worse than the past couple of years, but the economy is also doing much worse than the last couple of years. Right now they look to be between 60 and 65 percent sold. That’s what Mediaweek said. When Fox had the Super Bowl, a lot of ad buyers held back late, and they wanted to get deals at the end. Well, Fox sold out early, so whoever waited, they really got burnt. So last year with NBC, everybody got in there early. And people who held back and waited, they actually got deals. So this year, everybody is holding back and waiting.

Ryssdal: Was anybody expecting this sluggish of a market?

OURAND: I think so. Most of the ad buyers I was talking to were waiting to see the upfront season end. And that’s when the broadcasters sell their primetime entertainment programs. And they wanted to see how much the rates were falling on those upfront ad deals. And the rates were coming down anywhere between 2 and 8 percent, and so that gives them a good basis to go and really negotiate for these high-cost NFL ad sales.

Ryssdal: You say the ad buyers are waiting and holding back their purchases to see how things go. Is there any chance that the networks would drop their prices and maybe entice some of these buyers into the market?

OURAND: Well, what we’re hearing is that CBS is being extremely flexible in terms of the Super Bowl and the NFL. Not only pricing, but also they have a whole big pre-game show to sell, and they have a lot of other slots. And they’re also trying to sell in primetime. So it’s more than just one buy, and they’re being really flexible in terms of that. NBC, which paid a ton of money for the winter Olympics, is being much less flexible and really trying to stick to that number, which is another reason the ads sales for the winter Olympics is going as slowly as it is.

Ryssdal: What if it just doesn’t pan out for the networks in terms of sales. What happens if they don’t get the ad buys and the revenue that they’re hoping for?

OURAND: Nobody expects that to happen. The Super Bowl and the NFL season, everybody expects that to come around. The winter Olympics, that’s the big concern. But for the consumer watching on TV, these are always going to be sports that are going to be on TV.

Ryssdal: John Ourand. He is a media writer for the SportsBusiness Journal. John, thanks a lot.

OURAND: Thank you, Kai.

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