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Sports Losing Momentum

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Once thought to be the sole recession-proof property on television, big-ticket sports are showing signs of vulnerability in the fourth quarter. Ad sales are down as much as 15 percent, according to a number of media buyers and network execs.

Brisk sales in the upfront and long-term sponsorship packages have cushioned the blow, but the scatter market is all but paralytic, as many key categories are slumping.

Predictably, spending from financial services and domestic auto have slowed, although drop-off in the latter has been offset by foreign auto. Hyundai has been particularly active, buying time in nearly all available sports, including TNT’s Thursday night National Basketball Assn. showcase and across ESPN’s college- and pro-football properties.

While the banking and credit card money is dwindling, insurance is pulling its weight. Geico has been all but ubiquitous in the quarter, thanks to upfront deals and a healthy investment in scatter time. Nationwide and Progressive are also spending, according to network sales execs.

Still, it is clearly not a seller’s market, and even iron-clad franchises like the National Football League are coming at a discount.

National Sunday afternoon NFL games are down slightly from the average price of $400,000 per 30-second spot, but the long-term looks a bit more troubling. Fox has one or two units left in its Thanksgiving Day game between the Dallas Cowboys and the Seattle Seahawks, but CBS is said to be having a hard time unloading time in its Turkey Day match-up. This may be a function of a profound mismatch it has in the (at press time) 0-9 Detroit Lions and the 9-0 Tennessee Titans.

The economy is getting its licks in with the NFL’s most high-profile game as well. NBC said that it still has about eight Super Bowl spots on its hands, an amount unchanged since September. Much of the availability can be chalked up to a pullback from previous Super Bowl advertisers, like General Motors, Garmin and Salesgenie.com.

The nation’s fourth-largest advertiser, GM spent an estimated $5.4 million on one 60-second spot in last year’s game. Returning sponsors include: Anheuser-Busch, Hyundai, Coca-Cola and PepsiCo. While NBC awaits word from FedEx, it has signed a new Super Bowl sponsor in dog-food brand Pedigree.

The NBA has been fairly steady thus far in the 2008-09 season. TNT and ESPN both enjoy the security of two-to-three-year deals with clients like T-Mobile and Nationwide, and neither are hugely dependent on auto. “Our existing deals with sponsors allow us to weather the storm,” said Turner Sports president David Levy.

As the steward of the NBA’s digital properties, TNT also has far more latitude to develop multiplatform executions for its clients, which ups the value proposition considerably. “There’s no question that you have to give people as many ways to see your brand as possible, especially in a difficult market,” said consultant Lee Berke of LHB Sports, Entertainment & Media. “With that multiplatform approach, you have a far more attractive proposition to bring to the table.”

Also providing a boost are fast food, men’s grooming and beer. “We are encouraged to see these categories continue to invest in ESPN,” said Ed Erhardt, president of ESPN customer marketing and sales. “We are seeing a flight to quality in the quarter, and we’re doing more with fewer brands.”

Undoubtedly, the sports franchise most at risk is Nascar, which was made evident on
Nov. 9 when ABC pushed its coverage of the penultimate race in the Chase for the Sprint Cup over to ESPN2 with 34 laps remaining.

ABC may have raised the hackles of Nascar’s governing body. “It’s a kick in the pants to the sponsors,” said Larry Novenstern, evp/director, national electronic media at Optimedia. “When it comes time to do renewals, if you’re ABC you’d better hope that [Nascar CEO] Brian France has a short memory.”