John Ourand and Tripp Mickle of Portfolio.com have written a telling piece on the state of the television sports advertising marketplace, indicating that sales are down and significant amounts of inventory remain for high-profile events such as the Olympics and Superbowl:
Wall Street may be showing signs of life with an unsteady bull market, but such indicators are not as positive for the television sports marketplace, where the advertising market is moving at a glacial pace for two of the biggest ticket items of 2010— Super Bowl XLIV and the Winter Olympics.
Though the events are less than six months away, their network rights holders both have considerable inventory left to sell, and ad buyers seem content to wait until much closer to the events to make their buys. While NBC is said to be holding the line on its pricing for the Olympics, ad buyers described CBS as more flexible, with the average cost of an A-position 30-second spot during the Super Bowl dropping from the $3 million that NBC pulled last year.
The challenges facing two of sports’ biggest media properties underscore the toll the recession is having on the sports marketplace and undercut the widely held belief that sports are a recession-proof business.
Both CBS and NBC budgeted steady ad sales revenue to help meet cost projections for the first quarter, and most insiders say a slow market for these big events serves as an indicator for other television sports programming down the food chain
Payout Perspective:
This news comes hot on the heels of the recently detailed slumping advertising sales of primetime television; numbers which may fall by as much as 20% in 2009.
What does it all mean for MMA? A possible reduction in advertising revenues.
Despite MMA’s strong demographic pull, the fact that NBC and CBS are having difficulty selling significant quantities of their Olympic advertising inventory – and that even the NFL’s regular season advertising sales are moving sluggishly – suggests that the sports marketplace as a whole, even including future UFC ad sales on Spike, might also be adversely impacted.
Bud Light is planning to pump additional money into a re-brand of sorts, but it would appear as though advertising budgets for 2010 – reflecting the significant downturn in 2009 – may dwindle the number of willing participants for all sporting contests. The resulting reduction in demand is going to force down the price on some of these inventories and that’s precisely what advertisers are waiting for.
However, it’s not really a question of if the slots will be bought – they will – it’s just no longer an up-front market as in previous years.
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