NEW YORK — Under more pressure than ever to increase NFL ad prices by 20%, the networks are trying a variety of new sales tactics, but media buyers believe they’ll be able hold price hikes to single digits.
ABC/ESPN, CBS and NBC have been loudly pitching their NFL inventory, but the marketplace has been very quiet. Since CBS bagged Honda/Acura as its first advertiser, (Daily Variety, April 20), no other deals have been consummated.
“It’s pretty slow going,” said a media buyer who buys the NFL. “The networks have a 1,000-pound elephant they trying to get moving.”
Ready to roll
ABC sales execs made presentations to the Detroit car companies early in the week of April 27, said sources close to the network. Automotive and beer advertisers are the first categories to buy the NFL. Marketplace sources said they expected deals to start popping this week.
Because the networks’ new pro football contracts are so expensive – a total of $18 billion for the right to carry the NFL for eight years — the only way they can come within punting distance of breaking even on the deals is to jack up ad rates 20%-30% over last year.
Priming the pump
However, CBS, which has the NFL back this year after a four-year absence, did its deal with Honda/Acura at less than a 10% cost-per-thousand (CPM) increase on what the car brands paid last year for the NFL, according to marketplace sources.
“CBS is out there being very aggressive,” said Chuck Bachrach, executive VP for Rubin Postaer & Associates. “CBS bent over as far as they could to make the deals work.”
Buyers said that one signal the networks are nervous they’ll be stuck with unsold, high-priced NFL inventory is that the webs will likely try to package pro football with primetime upfront inventory. While networks have tried in the past to package big ticket sports inventory with primetime upfront avails — NBC attempted to package the World Series with the upfront last year –buyers expect an even more strenuous push this season, especially from ABC.
By packaging expensive “Monday Night Football” with less expensive primetime inventory, the overall unit price and overall CPM increase come out lower than if the advertiser bought “MNF” by itself.
Buyers said they expected Fox and CBS to also package their NFL games with the primetime upfront.
“It’s a way to reduce CPMs for cost-conscious advertisers,” said one buyer.
Another way ABC is trying to maximize ad dollars is to package “Monday Night Football” not only with ESPN’s Sunday night game, but also with all the other related football vehicles the company can muster, such as ESPN2, Classic Sports Network, ESPN’s new consumer magazine and the Web site ESPN SportsZone. In past years, ESPN and ABC sold their NFL inventory separately from each other.
“Most of us just want to buy the NFL games, so they’re smart to try to package all that other stuff in,” said Bachrach.
Buyers had mixed opinions of the ABC/ESPN package deals. A few buyers said it would work for their clients, but others said they preferred to buy the networks separately.
“They’re trying to sell them together, but I don’t think that many advertisers will go for it,” said a major sports buyer.
Several buyers said they wanted to buy just ESPN because the network can throw in a good deal of special sponsorship enhancements in the network’s pre- and post-game NFL programming. “ESPN has an arrogance that is above and beyond their delivery, and its making its difficult for the mother company to do business,” said Bachrach.
Beyond the networks’ new packaging tactics, buyers said the two biggest factors that will hold down price increases are the three additional 30-second units the NFL has inserted in each game and the elimination of in-game enhancements.
The additional three spots means that the networks have 5% more inventory to sell. Advertising is a supply and demand game, so an increase in supply will keep CPMs lower.
Through last season, advertisers had numerous opportunities to sponsor the play of the game or a time out. The advertisers have gotten very used to these value-added enhancements and are livid the NFL took them away.
“The biggest thing the networks have to overcome is that there are no more in-game enhancements,” said Bill Croasdale, president of broadcast for Western Intl. Media. “They used to say that the price is going up, but we’ll also give you sponsorship of the pass of the game. What can the networks offer you now?”
The lack of enhancements, however, will serve to inflate the sponsorship of the halftime period, such as the Lexus Halftime Report on “MNF.”
Prior to CBS cutting its deal with Honda/Acura, Toyota did a deal with Fox; Anheuser-Busch renewed its deal with ABC; and Busch also paid a reported price of $2 million per spot for exclusive beer sponsorship in Fox’s Super Bowl.