With NHL Lockout, TV Rights-Holders Could See Hockey Ad Dollars Move to Other Networks

By John Consoli -- Broadcasting & Cable, 9/18/2012 1:39:55 PM

The fourth quarter is one of the busiest times of year for sports on television, with the Big Four professional sports leagues in action either airing regular- or postseason games. And the bulk of Q4 TV sports sales are done, except for the usual scatter buying.

Kevin Collins, senior VP and director of national broadcast for media agency Initiative-where he oversees TV sports buying for MillerCoors among other clients-took some time out to discuss the fourth-quarter TV sports advertising scene, including the impact the National Hockey League lockout could have on the networks that hold league TV rights.

The National Hockey League has locked out its players, which means the new season could be delayed, shortened, or at worst, cancelled. What impact does that have on sports advertisers?
This situation is not the same as the [2011] NFL lockout, where advertisers would lose large ratings so they were willing to hold off a little while before spending those dollars elsewhere. With the NHL, you are dealing with smaller ratings and not as many ad dollars. On top of that, there are not many nationally televised games in the fourth quarter. But there are advertisers who spend a good amount of ad dollars locally with the regional sports networks that televise hockey and they are going to lose those dollars. We can't be left holding money for our clients at the end of the fourth quarter. We need to spend it elsewhere.

Where would advertisers move their NHL money?
With hockey, they are looking to reach younger males so we would probably move it to the younger-skewing male networks on cable. I'm talking about entertainment networks, not the cable sports networks. Some of those networks are relatively cost-efficient. However, even ESPN's SportsCenter telecasts are a possible location for moved dollars. SportsCenter in many cases can draw larger audiences than some of the hockey regular-season game telecasts. The only issue would be where they have available time.

As far as you can tell, where do the NFL telecasts stand in terms of sellout?
Upfront sales for the NFL telecasts have come and gone and they sold well. Advertisers still want to be in the NFL. Not only is it DVR-proof but it is appealing to more of a mass audience that includes women. Everyone wants NFL inventory it seems. Most of the networks are sold out for the first two months of the season, but you can still get into a game here and there. The networks have held some inventory back for possible make-goods and as the games are played and the ratings start to come in, there could be some of that inventory released. But several games on NBC in particular are sold out.

What about NFL playoff ad inventory?
Most of the playoff inventory is also sold during the NFL upfront. It moves with the regular-season inventory. Each network might have 15 or 20 spots overall that they are holding back and some advertisers wait to see what the matchups will be. But postseason inventory is very expensive and has higher unit costs than the regular season because the postseason ratings are so much higher.

What are you hearing about Super Bowl inventory and avails? CBS CEO Leslie Moonves said the game is 90% sold out and the network is now getting more than $4 million per ad unit in the game.
Well, CBS keeps its information pretty tight, but they do seem to have some inventory left. The better positions, the "A" positions, may be sold out or the first half may be sold out. As availability gets tight the prices can go up. But those last few units always seem to be harder to sell.

Where does postseason baseball stand as far as those networks selling out their ad inventory?
MLB postseason inventory can also be bought when you buy regular-season inventory, at least through the first four games of the World Series. I've heard that Fox and Turner are progressing with the postseason sales but they still have some work to do before they are sold out. Sales will move faster once it becomes clearer which teams-and from which markets-are going to make it in.

NFL advertising cost advertisers high single-digit price increases this year. What ad rates are the MLB postseason telecasts getting?
Live professional sports never get decreases from the previous year and baseball is no different. While they are not getting the same percentages that the NFL gets, it seems like MLB playoff inventory is selling for mid-single-digit increases over last season.

The matchups in postseason are important, but more so for baseball than football since in the MLB playoffs, the same teams play multiple games, and if two smaller-market teams face each other, the ratings could be much lower. While that can hurt the networks and result in them having to give out make-goods to cover ratings guarantee shortfalls, the advertisers are protected, correct?
We are protected but we still want to see the best matchups possible that bring in the most ratings. While the matchups might be more important for the networks, the advertisers still want to reach the most possible viewers with those telecasts, even if they are protected if there are ratings shortfalls.