TV in ‘Uncharted Territory’ as Networks Navigate Ad Sales Fallout of Sports Cancellations

March Madness, NBA and MLB losses leave networks scrambling

an empty stadium
The decision by every major U.S. sports league to cancel games potentially affects billions in TV ad revenue. Getty Images
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Key insights:

In the space of one day, every major sports league in the U.S. suspended operations for at least the next several weeks in response to the growing spread of the novel coronavirus.

The rapid cancellations, which began Wednesday night and stretched into Thursday, have left networks and marketers reeling, scrambling to determine what happens to their sports-related TV ad buys. “We’re in uncharted territory,” one TV ad sales exec told Adweek.

The National Basketball Association suspended play until further notice Wednesday, and the other leagues followed suit on Thursday: The National Hockey League and Major League Soccer also paused their seasons indefinitely, while Major League Baseball canceled spring training games and said it would delay the start of the season by at least two weeks. The NCAA also canceled its spring championships, most notably the men’s and women’s basketball March Madness tournaments. On Friday morning, The Masters, golf’s first major tournament of the year, was postponed.

Networks are working to pull together alternative programming to fill the unexpected gaps in their schedules. This morning, CBS said it will fill its March Madness primetime programming gaps with repeats of its primetime shows through the end of the month.

Meanwhile, TV ad sales groups and marketers find themselves in similar positions: huddling with their respective teams to evaluate their options and determine next steps as they navigate the fallout of these sudden sports cancellations, which potentially affect billions in TV ad revenue.

March Madness generated $910 million in national ad revenue last year for CBS and WarnerMedia, according to Kantar.

NBA games generated $248.9 million in ad revenue during the first two months of the season, from Oct. 22 to Dec. 31. Last year, the NBA brought in an estimated $598.7 million in ad revenue during the regular season, while the playoffs generated $972.5 million, per Kantar.

Independent research firm MoffettNathanson estimates that if the rest of the 2019-2020 basketball season is canceled, Disney’s ESPN could lose $481 million in NBA ad revenue, while WarnerMedia could lose $210 million.

Networks and their clients are in the process of determining what will become of the ad buys that had been locked in for these various sporting events. Some could be shifted into other programming, either replacement shows or elsewhere on the respective network, though as MoffettNathanson’s Michael Nathanson said in a research note, “Due to the importance of high-profile sports to these ad buyers, we have a hard time seeing why and where these dollars would be redeployed.”

Other sports ad buys could shift to later games if and when those leagues resume activity, as many hope to do in the coming weeks. In other cases, marketers could decide to recoup their ad spend.

Because everyone is still figuring out next steps, those conversations between networks and marketers have not yet begun in earnest, but are expected to start today.

For many marketers, the situation isn’t as easy as simply deciding where to reallocate their ad spend. Brands with campaigns specifically tied to March Madness and other canceled sporting events, or products that might be delayed due to the coronavirus (including movies like Mulan and No Time to Die, which have been postponed), will have to regroup.

“They also are doing triage, and they don’t know what they’re going to do,” said one TV ad sales executive.

Some campaigns will need to be “completely altered,” such as Hershey’s recent decision to pull an ad featuring people handing out candy bars to strangers, often accompanied by hugs and handshakes, said Brian Wieser, global president of business intelligence at GroupM. “There’s some marketers whose campaigns are evergreen, but I think that many marketers are going through this process at this moment to figure out what their messaging should look like and their business focus should be.”

For the last several weeks, marketers had been more focused on the fate of the Summer Olympics in Tokyo, not on the possibility of domestic sporting events being shuttered. “I don’t think that many American marketers would have been prepared for the speed with which professional sports were canceled,” Wieser said.

Given the other ripple effects of the coronavirus pandemic, including the plummeting stock market, “there’s a lot of reason for marketers to be thinking more broadly and losing some sport GRPs may not be the primary concern for many,” Wieser said. “First concern is making sure that your people, your employees, are safe, and making sure that you’re then able to operate to the best of your ability under whatever the circumstances would be.”

Statements of support

For now, media companies are issuing statements of support and vowing to work with their partners to determine alternatives.

“This is an unprecedented situation,” said Disney in a statement. “We have great relationships with our league partners and are confident we can address all issues constructively going forward. Our immediate focus is on everyone’s safety and well-being.”

“The health and safety of our employees are our top priority. These are uncharted waters,” said an NBC Sports spokesperson. “We intend to work collaboratively with our advertising partners to deliver on their original needs with the least disruption possible.”

Turner Sports and CBS Sports, issued a joint statement, saying, “We are fully supportive of the NCAA’s decision to cancel this year’s NCAA Division I Men’s Basketball Championship. We’ll continue to work closely with them and all of our partners as we prioritize the health and well-being of everyone involved.”

As for the cancellation of NBA games, Turner Sports said, “We have a long-standing relationship with the NBA, and we’re supportive of the actions being taken to help protect the health and well-being of everyone involved.  We’ll partner closely with league officials to evaluate and determine next steps at the appropriate time.”

Fox Sports said in a statement, “Fox Sports’ priority, first and foremost, is the health and safety of everyone. We fully support our league partners and are actively working with them to navigate this evolving and unprecedented situation.”

@jasonlynch Jason Lynch is TV Editor at Adweek, overseeing trends, technology, personalities and programming across broadcast, cable and streaming video.