Redistribution of dollars would lead to adjustments, confusion

TV’s annual upfront advertising market, which is already poised to grab hefty increases for broadcasters and cable networks, may have a bigger wild card thrown into the mix: more NFL advertising dollars looking for a home.

Some $2.5 billion gets spent annually on NFL TV spots on Fox, CBS, NBC and ESPN in the third and fourth quarters — a key time for male-targeted advertising as well as other TV marketers buying other national TV dayparts, like primetime.

If the season gets cancelled or even significantly truncated due to the threatened lockout, the bigger question is what happens to intended NFL TV advertising dollars?

Some will seek alternatives, others will sit on the sidelines. But there’ll be confusion overall.

If the season does get a late start, as expected, there will be adjustments. Lyle Schwartz, of media investment management company Group M, predicts that instead of an early September start, the new season could kick off around the first week in October. Making up the time — and to keep the whole season intact — the Super Bowl could be delayed one week. Additionally, all individual team bye-weeks in the regular season would be eliminated.

“You’ll have some shifting of NFL GRPs (gross rating points) into the first quarter from the fourth,” says Schwartz, who adds that the overall change will amount to a few percentage points.

What industry analysts don’t expect is a full-scale cancellation of the season. Still, some marketers may already be hedging — and making deals now.

“We reach a lot of those viewers,” said Jeff Lucas, head of advertising sales for music and entertainment groups for MTV Networks, recently at MediaPost’s Outfront event in New York City. Lucas said some NFL advertisers are already buying more inventory on MTV Networks in the third quarter — which includes the first month of the regular season.

Some estimates are that $80 million of the $2.5 billion in NFL advertising dollars are spent in August — where most preseason games run. But in September this number ramps up to some $440 million. All this is compounded by an already strong TV marketplace — which looks to peg TV marketers to double-digit price hikes during an upfront market that is estimated to give around $9 billion to the four broadcast nets for their primetime programming and a collective $9 billion for all cable nets for all dayparts.

Timing is a issue: With the upfront market set to start in late May/early June, media agency execs say the likelihood is that many marketers will make deals on the assumption that the league will go ahead. But if the lockout continues, then there are other issues.

“For Fox, CBS, ESPN and NBC, they’ll have to decide when to give the money back,” says Kris Magel, executive VP and director of national broadcast for Initiative.

It isn’t just a TV marketers problem. It’s not all good news for TV networks — especially if stuff changes in midstream.

“There are huge sell-out implications,” says Donna Speciale, prexy at MediaVest USA. “Do I go to 80% (sell-out of inventory)? Do I go to 60%? How do I hedge my bet? And then what happens if the strike doesn’t happen? Then I have sold too much. It affects everybody.”

Though college football, late-season baseball and some male-skewing cable networks may be viewed as replacement programming for the NFL, one advertising exec boils it down like this: “You have to be realistic, not all money is going to get spent.”

Group M’s Schwartz says there are other issues to consider. “How much media do marketers already have in those dayparts?”

Finally, the NFL comes with an extra value — a big premium — because of its high TV ratings perch.

Other than “American Idol,” nothing delivers week in and week out like the National Football League.

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