Hike! Sports upfront scores big

The rising tide that boosted the broadcast advertising upfront market is spilling over into sports. Sales executives last week said the market for the National Football League ad time is well under way and should wrap by mid July, with price increases averaging in the mid to high single digits.

That's a big difference from last year, when the market was delayed until August and prices were down 10% from the previous year. That also meant there were lots of opportunities to buy spots in many games at the last minute.

"The sales side is more in a mode to do business versus waiting like they did last year," says the head of sports buying at one major ad agency. "It's a clear indication that they want to keep up the momentum, move inventory and be a little flexible on pricing."

But the good news for the sellers is their "flexibility" is translating into price hikes because the traditional sports advertisers—beers, autos, wireless phone companies and even financial services—are showing renewed interest in the market and have more money to spend this year than last.

There's no question the market is stronger than last year, but will it get back to 2000 levels?

That's a little harder to answer at this point. The buyers say no, and the sellers say it's "up in the air and could happen," as one network executive put it.

But worst case, the sellers believe, is that sports advertisers will get close to—if not quite back to—2000 spending levels.

In the NFL alone, it was estimated there's between $150 million and $200 million more in the marketplace this year than in 2001.

That wouldn't be record setting, but it's going in the right direction. According to Nielsen Media Research's ad-tracking service, Nielsen Monitor-Plus, NFL advertisers spent $1.9 billion on televised games in 2000. Spending dropped about 21% in 2001 to $1.5 billion.

Both sellers and buyers agree that, if prime time demand remains strong, the sports market will benefit from advertisers that have more money to spend than the prime time daypart can handle.

ABC and ESPN, sold in packages to advertisers, are leading the NFL market this year. There's a reason: ABC has the Super Bowl in January and has already sold roughly 80% of the available ads for an average price of $2.25 million per 30-

second spot. That's a new high, about 15% higher than the $1.95 million that Fox got last year.

Monday Night Football is also 80% sold, at average price increases of 10%. Ed Erhardt, head of sales for ESPN/ABC Sports, wouldn't comment on the numbers but did say the networks' ability to leverage its top product "is having a very strong positive impact on the marketplace."

Last year, Fox was selling units in the Super Bowl almost up until game time. The fact that ABC has sold 80% of the time in the game by July 4 (said to be a record pace) shows how much demand there is this year, both buyers and sellers say.

"Football is probably the best buy in all of television when you compare price to average rating for it versus any other daypart," says one senior-level sports buyer at a big agency.

"That's driven by competition and all the sports rating points in the fourth quarter. But, in one week, football generates gross rating points equivalent to a four-game championship series in the NBA. And there's 17 weeks of it."

CBS has sold about 65% of its NFL inventory and reached that level about six weeks earlier than it took to do it last year, says Joe Abruzzese, CBS president of ad sales. He also said the network has generated $50 million in new NFL business this year vs. 2001. Breweries, autos and wireless are particularly strong categories.

Jon Nesvig, president of Fox ad sales, says the network has already sold roughly 50% of its NFL inventory.

He doesn't quibble with buyer reports that NFL prices on average are probably in the mid to high single-digit range. "In general, we're encouraged with what we're seeing, which is increased spending from returning advertisers as well as a couple of pieces of decent new business."

Fox's Nesvig also reports that Major League Baseball's All-Star Game sold out. He won't talk specifics, but buyers say the game, which airs this week, commanded about $325,000 per spot.

Of all the major sports, NASCAR probably weathered the recession better than any. In 2001, total ad expenditures on the race-car circuit were up 30% to $272 million. And Fox and Turner and NBC (the latter two in a joint venture) all capitalized on it. Fox sold out at record levels for its season, which ended last weekend, and Turner and NBC are sold out for its NASCAR cycle, which starts this month. Trish Frohman, Turner's senior vice president for sports sales, reports NASCAR sales (total dollars) are up between 15% and 20%, with price hikes in the high-single-digit range. Those results are indicative of what's going on in the overall sports market; she says: "It's definitely improving."

Turner's biggest sports property is the NBA, which starts a new six-year cycle on TNT later this year. The package should prove more lucrative, given that it consists of 60% playoff games, vs. 40% in the previous cycle. The selling effort there is in the early stages, but TNT is getting mid-single-digit price hikes on returning business, says Frohman. "We'll be chasing a lot of NBA money freed up by NBC," she said, "and, with a greatly improved package, we think we'll be writing a lot more business."