NFL Drags Down U.S. TV Ad Revenue

NEW YORK: U.S. television advertising revenue took a hit last month, impacted by weak ratings for NFL football, coupled with having four fewer games in November, according to Standard Media Index (SMI).

SMI total market closed November 2016 with a 1-percent decrease on a year-on-year basis, driven by a decrease in the number of Football games and a tough comparison with an extremely strong November 2015. This marks the first time the market is seeing the effects of the low NFL ratings start to actually hit the bottom line with decreases in revenue, which had still been increasing in September and October 2016. November saw four fewer football games than November 2015, which immediately brings gross spend for the month down. What’s more prominent, according to SMI, is the increase in ADUs, the makegoods they’re starting to pay back to advertisers who have not been receiving guaranteed impressions thanks to low ratings.

NBC lost 17 percent in football revenue year-on-year. The network was the only one who had the same number of games in both 2016 and 2015 and saw a 10-percent increase in average unit cost for the month to $720,949. The 20 percent of inventory given as ADUs contributed to the decline—compared to just 5.2 percent in November 2015.

CBS featured one less game in November 2016 compared to November 2015, but its 26-percent loss in revenue is mostly due to an increase in ADUs—nearly 20 percent of inventory in November 2016 compared to 11 percent in November 2015. The network also had a slight decline, 1 percent, in average unit cost year-on-year.

FOX saw the largest overall decline, with a 34-percent decrease in gross spend. This is mostly due to the number of games, as the network had three more games in November 2015 than in November 2016. FOX’s average unit cost for the month rose nearly 21 percent to $642,559, with the percentage of given ADUs growing from 20 percent to 25 percent.

In November 2016, the overall TV market was down 2.4 percent year-on-year. Broadcast spend declined 10.6 percent, while cable grew 6.3 percent. If football was excluded, the national TV market is up 5.3 percent.

Overall, the four major U.S. broadcast networks saw a year-on-year decline for November 2016: CBS is down 18 percent, NBC is down 5.8 percent, FOX is down 14.5 percent and ABC is down 7.6 percent. When you exclude football from broadcast, the medium is up 0.8 percent year-on-year. NBC saw the largest year-on-year increase to its average prime-time unit cost when sports are excluded, going from $99,000 to $110,900. ABC had the highest overall at $112,899 for the daypart in November. Without Scandal, ABC’s Thursday night prime-time lineup has taken a hit, seeing a 5-percent drop on its average unit cost and 26.6-percent dip in its gross spend for the evening. FOX’s hit show Empire continues to bring in big spending, with an average unit cost of $311,000 throughout November 2016

“November was a fascinating one for the sector with a lot of moving parts. The final days of election coverage, a challenging football season and a revitalized retail sector all contributed to the market delivering a modest gain,” said James Fennessy, CEO of Standard Media Index. “Poor football ratings earlier in the season, combined with fewer games this month, finally caught up with the major broadcasters whose revenue dropped more than 10 percent in November as they were forced to give inventory back to advertisers. Without sport the major networks were slightly up as major retailers moved big money back into TV after some questionable experimentation with digital last holiday season.”