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TV Networks, Advertisers Ready For Upfront Scrimmage Over NFL Games

The kickoff to the National Football League’s 2014-2015 season is weeks away, but already two heady competitors are taking to the field for what looks to be an intense match.

Advertisers and TV networks have differing opinions over the value of NFL games, according to people on both sides of the negotiations. People familiar with the TV networks’ process in the “upfront,” when they try to sell the bulk of their ad inventory for the coming season, suggest interest is robust. Yet buyers caution a reduction in overall volume committed by marketers for next season along with an increase in the amount of football on broadcast-TV in the form of eight Thursday-night games on CBS might create headwind in the sales process.

“Supply is certainly outpacing demand,” said one media-buying executive. The talks are in very early stages, executives on both sides cautioned, and likely won’t ramp up until after the networks have completed the bulk of sales for their primetime entertainment schedules.

This executive said buyers would press for TV networks to accept a narrower rate of increase in the cost of reaching 1,000 viewers, a measure that is known as a CPM and is an integral part of these annual discussions between advertisers and TV outlets. In recent years, this buyer said, networks typically sought a 7% increase in CPMs for football. In 2014, the buyer estimated, advertisers might press for a rate that is below what TV networks are getting for their primetime entertainment offerings – something TV executives will likely refuse, given football’s popularity among viewers.

Adding some heft to the pressure from buyers, who have an interest in pushing for the best ad rates for their clients, is speculation in the market that two big auto players are trimming their NFL ad budgets. Buyers said rumors have cropped up that both General Motors and Toyota are pulling back on their NFL spend for this season. A General Motors spokeswoman said the company regularly declined to comment on its upfront strategies. A spokeswoman for Toyota Motor did not return a call seeking comment.

Automakers spent a little more than $253 million on primetime football in 2013, according to Kantar, a tracker of ad spending, compared with $247.8 million in 2012.

One auto sponsor said it would maintain its level of spending behind TV’s NFL coverage. Nissan North America is “pretty much on par for our spend in 2014 for NFL as we spent for 2013,” said Josh Clifton, a spokesman for the automaker, in a statement provided via email.

TV networks see no hiccups in football sales. CBS is seeing “robust” interest in its NFL inventory, according to a person familiar with the situation, and is drawing notice from auto advertisers as well as marketers who normally seek out scripted fare on Thursday nights. NBC said it only has “a handful of auto units available” for its football broadcasts.

Despite high prices for the rights to broadcast the games, NFL contests are some of the most coveted pieces of content in the modern era of broadcast television. The games generate some of TV’s highest ratings, and the fact that most viewers watch them live mean the ad messages that accompany the matches can’t be as easily ignored as they are when a viewer watches, say, a favorite drama captured on a DVR.

As such, the games also bring in TV’s highest ad prices: Last season, a 30-second spot on NBC’s “Sunday Night Football” cost an average of $628,000, according to a Variety survey of primetime ad costs. TV’s next most costly program was ESPN’s “Monday Night Football,” where the average 30-second commercial cost $408,000. The cost of a 30-second spot in Fox’s Sunday-afternoon broadcasts last season was said to reach into the $600,000 range.

Advertisers spent about $1.08 billion on primetime football alone in 2013, according to Kantar, up approximately 2% from the $1.06 billion they spent in 2012. NBC, ESPN and the NFL Network aired NFL contests in primetime last season. CBS’ decision to join the fray in 2014 has been a central part of its sales pitch for the fall. Fox and CBS also show games on Sunday afternoons and early evenings.

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