Advertising Industry Braces for an NFL Season Unlike Any Other (if It Happens)

The sports marketplace, which had been dormant since leagues shut down in March due to Covid-19, finally roared back to life over the past few weeks, as the NBA, MLB and NHL resumed play. But just as marketers were beginning to celebrate sports’ successful return, there was more upheaval last week, when two of the Power Five conferences—the Big Ten and Pac-12—elected to postpone their college football seasons until 2021. The other conferences are still moving forward for now, but the uncertainty leaves nearly $1.7 billion in TV ad revenue hanging in the balance and intensifies concerns about whether fall’s even bigger football cash cow—the NFL—will be able to successfully pull off its season. While marketers and TV execs had become increasingly pessimistic in recent weeks about the likelihood of college football this fall, by all accounts, they anticipate the NFL season to kick off as planned on Sept. 10 and are scrambling to shift even more ad dollars to the league. So far, the NFL has avoided major Covid-19 outbreaks like MLB has had to weather. But, more importantly, the league built flexibility into this season’s schedule that would allow it to move the whole season back several weeks or scrap some of the earlier weeks and start later into the season if needed. Plus, there are simply too many dollars and eyeballs at stake to lose the NFL season, and the potential fallout of a fall without the NFL is too scary for many to contemplate. “Football commands such a huge share of the collective advertising wallet that it's hard to imagine what happens and where it all goes if that doesn't occur,” said Jeff Gagne, svp of strategic investments at Havas Media. Even if the NFL season does proceed as planned—from next month’s kickoff through to Super Bowl LV on Feb. 7, 2021—it will look nothing like any that came before it, given that most teams will play without fans in the stands. Still, the possibility of a Covid-19 surge that could shut down games at any moment requires those involved with the NFL, from brands to networks, to prepare for all possible contingencies—including the possibility of no football. “I think they're as prepared as they can be,” said Jeremy Carey, managing director of Optimum Sports, Omnicom’s sports media and marketing division. “But with so many unknowns still right now, all we can do is plan for the best—and have contingencies for the worst.” Adweek spoke with leaders in three key areas of the industry—TV advertising, brands and agencies—about how they are approaching this unprecedented NFL season as the pandemic rages on. TV ad sales: more than $4 billion at stake When it comes to TV ad revenue from professional sports, there’s the NFL, and then there’s every other league. Last season, the NFL generated an estimated $4.6 billion in national TV ad revenue, according to Kantar Media: $3.3 billion in the regular season and an additional $1.3 billion in the playoffs and Super Bowl. That’s more than double the national TV ad revenue last season from the NBA, MLB and NHL combined ($2 billion). Several media companies whose bottom lines have been decimated during the pandemic, in large part because of the lack of live sports, are counting on the NFL to help them rebound. ViacomCBS recently reported a 27% decline in Q2 advertising revenue due to the pandemic, but president and CEO Bob Bakish told investors, “We believe Q2 is the bottom, and we expect to see continued sequential improvement in the rate of change in Q3 and again in Q4.” However, that recovery can only occur if CBS can air its NFL package this fall—and the Super Bowl in February. As further proof of marketers’ faith in the NFL season proceeding as planned, the already robust NFL marketplace heated up last week on the heels of the college football postponements. “Discussions have picked up. We’re definitely seeing a cause and effect, and it’s adding fuel to the NFL fire,” said an NBC Sports spokesperson. ViacomCBS is also seeing a significant amount of NFL inventory working in the marketplace. A Fox Sports source said clients already in talks about NFL inventory have sped up their negotiations to finalize deals ahead of the expected influx of college football advertisers seeking a new home. College football marketers are also encouraged by an NBC Sports report that the NFL would “likely” move some games from Sunday to Saturday if college football does not proceed this fall. “NFL is an obvious place to shift to, especially if NFL expands to some Saturday games, creating new inventory. But we are thinking beyond the obvious as well to use our targeting data to locate where else the college football fan is consuming premium video and identifying ways to reach them,” said David Campanelli, co-chief investment officer, Horizon Media. The Super Bowl marketplace, meanwhile, isn’t proceeding at the same rapid pace as last year, when Fox Sports sold out Super Bowl LIV 10 weeks early, the earliest finish in nine years. “Conversations are happening,” said Optimum Sports’ Carey, but deals are slower to close amid continued uncertainty. Still, “there’s going to be demand for that.” As TV linear ratings continue to plummet and production shutdowns throttle the entertainment content pipeline—most of the biggest broadcast series aren’t scheduled to return until early 2021—marketers will have few reliable gross rating point options on TV this fall without the NFL. “A lot of those rating points that people used to spend against for entertainment—the dollars will need to find a home. And when you look at the analysis, there's over 300 rating points across the four broadcast networks that were there last year that won't be there this year,” Dan Lovinger, evp of advertising sales at NBC Sports Group, told Adweek last month. The NBA, whose playoffs have been rescheduled for October following the league’s delay, is another possibility for marketers. ESPN and TNT share the NBA package, but Jon Diament, Turner Sports evp and chief revenue officer, warned Adweek last month that he won’t have much basketball inventory available if NFL or college football games are canceled or postponed. “We can’t accommodate all of that,” he said. While marketers are confident the NFL will proceed this season, they are less certain about what the fanless experience could mean for brand partners. “There’s the NFL that we knew, and there’s the NFL that we’re about to be reintroduced to,” said Havas Media’s Gagne. “It's a scary opportunity, but it's also a really exciting opportunity for both the league and brands that want to find new, unique ways to associate with whatever the new vision of a fanless, teched-out game might look like.” Brands and the NFL: 'Full steam ahead' but 'day to day' The NFL declined to comment on the record, but a source with the league familiar with discussions between the NFL and its brand partners said they are "full steam ahead," and that the league hasn’t discussed contingency plans, cancelations or delays with its partners. “Many of our partners have relationships with other leagues. They’ve been through that before," the source said. "If that does happen and we have to make adjustments, we’ll have those conversations.” But while Dallas Cowboys owner Jerry Jones has said he expects his team to play in front of fans at AT&T Stadium this season, brands working alongside the NFL don’t share quite that level of optimism. AB InBev, AT&T, Ford, Lowe's and State Farm spent a combined $612 million on TV ads during NFL games last season, according to MediaRadar. AT&T told Adweek there are “too many unknowns with football,” and Lowe's, this year's presenting sponsor of the NFL draft, said it was “premature” to talk about its NFL plans. “We’re in close talks with partners like the NFL," said Matt VanDyke, director of U.S. marketing at Ford. “It’s really day to day.” Anheuser-Busch has been in "constant communication" with the league, according to vp of sponsorships Nick Kelly. "We’ve already established a plan to activate our sponsorships with today’s challenges in mind," he said. Meanwhile, State Farm said in a statement that it is “monitoring” the situation in college football and the NFL. The insurance brand, a major presence during NBA broadcasts, has already white-knuckled one shutdown and subsequent restart. “Like we did in the spring when Covid-19 first impacted live sports, we will adapt and continue to find ways to connect with our customers,” the company said. But, with millions on the line, not all brands are likely to take that approach. “In the last five months, we’ve been writing contingency plans for any and every sport, including the NFL,” said Arnold Wright, evp of marketing at sports marketing firm Octagon, adding, “Brands have had to be flexible in terms of what their advertising and promotional plans are just to make sure we’re adapting to a very dynamic situation.” Agencies prepared to pivot Eddie Austin, svp of Kia media planning at Innocean, said there is tremendous anxiety as agencies work out the best way to reallocate budget if the NFL season does not go ahead as planned. For its part, Innocean has experience with the restart of golf—the agency counts TaylorMade as a client—which could be a bellwether for football. “There was a divestment in the marketplace,” Austin said. “Then [with the restart], there was a rush back to the market and huge increases that benefitted the media companies. And they took advantage of it. It’s a seller’s market.” Paige Osborne, video activation director at Noble People, estimates that 40% of the agency's planned client budget for NFL buys will likely move to cable and streaming, and possible OOH in key markets that have reopened. "The NFL is more than just America's sport," she said. "It's a multibillion-dollar business and outside of the Olympics is arguably the most premium and valued property for ad awareness that drives massive revenue for publishers, stadiums and advertisers." Being able to shift plans is key, but how agencies approach the output for a brand is still a work in progress. For example, Buffalo Wild Wings, which advertises in NFL programming and largely built its business as a place for fans to gather and enjoy sports, was forced to close its restaurants when the pandemic hit. “Sports is at the heart of [Buffalo Wild Wings'] voice,” said Jordan Muse, svp and group account director at The Martin Agency, which became Buffalo Wild Wings' digital agency of record in 2019. “But we had to be prepared to speak to the product and less about the experience in the restaurant.” On the upside, as live sports have returned, the brand and agency have been able to build off of Buffalo Wild Wings’ equity, quickly pivoting the messaging and output. “We’ve done six months of work in four weeks,” said Muse. “We were able to build the messaging up quickly, and we’re thinking of more ways that we can bring the brand’s experience home.”