September Broadcast Ad Sales Dropped 13% Due to FanDuel and DraftKings’ Rapid Decline

Average price of prime-time spot fell 7.6%

The demise of last fall's two biggest fantasy football players turned into an ugly reality for broadcasters' bottom lines in September.

According to new data from Standard Media Index, broadcast television spend fell 13.2 percent in September versus the previous September, when revenue swelled because of the freewheeling spending of dueling fantasy football companies DraftKings and FanDuel. Those companies—which rose quickly last year and fell even quicker—spent nearly $100 million less last month across broadcast and cable than they did the previous September.

Last September alone, DraftKings spent $65 million on U.S. advertising while FanDuel spent $53 million, according to analysis from MoffettNathanson. They accounted for 3 percent of all advertising revenue across 14 broadcast and cable networks for the month.

In SMI's findings, which tracks 70 percent of national ad spending from global and independent agencies, prime-time revenue fell 16 percent year over year, while the average unit cost in prime time (excluding sports) for the four major broadcast networks was $86,000, a 7.6 percent decrease from $93,300 a year earlier. Upfront spend for the month was down 25 percent—SMI said many advertisers held back their upfront spends for the month after committing so many ad dollars to the Rio Olympics—while scatter for the month was up 32 percent.

By night, NBC took home the most broadcast revenue on Monday and Tuesday in September, fueled by The Voice and fall's biggest freshman hit, This Is Us. Wednesday was split between ABC, with its comedy block and Designated Survivor, and Fox, where Empire continues to be its most lucrative show. CBS was on top Thursday with Thursday Night Football, while NBC is the Sunday night revenue champ because Sunday Night Football. Without sports, ABC would win on both Thursday—thanks, Grey's Anatomy—and Sunday, where SMI said it has double the ad revenue of CBS and quadruple that of Fox.

On the cable side, ESPN remained on top in September, but its revenue was down 10 percent versus last year, and the price of an average 30-second spot fell 4.5 percent. The presidential election helped the three big news networks see double-digit increases in revenue and the cost of average spots. Fox News had 16 percent revenue growth, CNN jumped 25 percent and MSNBC surged 28 percent.

SMI found that the average 30-second spot for all networks showing NFL games in September was $509,193, which is a 8 percent increase from last September. While Fox and CBS had an 11 percent increase in cost for an NFL spot, Thursday Night Football was flat for CBS and ESPN fell by 4 percent. UPDATE: This story originally noted that ESPN had a double-digit loss, but AMI had initially miscaculated its ESPN data, and the NFL figures (which include the average cost of a spot for all networks showing NFL games) have been corrected and updated.

The automotive category purchased the largest quantity of ads across all NFL games in September, followed by telecommunications, insurance and consumer electronics.

"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. On the flip side, primetime and late night programming doesn't provide the same pull. Poor ratings are directly linked to falls in revenue and average unit cost declines," said SMI CEO James Fennessy in a statement.

"While some of September's falls can be attributed to a post Olympics hangover, evidence shows the biggest contributor to broadcast's significant fall was driven by the fantasy leagues spend almost completely drying up under the numerous legal actions they face. Cable's gains are directly related to the terrific results delivered by the news networks, which we fully expect to continue through the November election cycle."

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