Advertising and Marketing

It's Game On for NBC Sports

Ad dollars likely to follow NHL players onto the ice 1/14/2013 12:01:00 AM Eastern

With the National Hockey
League getting its Zambonis
warmed up after ending a
lockout that cost half of its regular season,
NBC Sports is looking to thaw out
advertisers’ cold cash.

After reaching a tentative agreement
with its players, the league is expected
to play a shortened 48-game schedule
that could start Jan. 19. According to
reports, the playoffs could stretch until
the end of June.

NHL sponsors will be glad to see slap
shots and kick saves again. “How can
I say anything except ‘Welcome back,
hockey,’” says Aaron Cohen, executive
VP for national broadcast at Horizon
Media, whose clients include Geico, one
of the top spenders on NHL hockey. “We
wanted a full season. We’re happy to get
what we can at the moment.”

Hockey’s labor issues cast a shadow on
what had been a strong 2012 for NBC
Sports, highlighted by a record-setting
Super Bowl, a resurgence in Notre Dame
football (getting swamped by Alabama in
the BCS Championship game notwithstanding)
and the London Olympics,
which turned a surprising profit.

The NHL lockout cost NBC its New
Year’s Winter Classic outdoor game and
the still-new NBC Sports Network its main
attraction. And it lost a penalty box full of
ad dollars. Advertisers spent $53 million
on nationally televised regular-season NHL
games on NBC and the NBC Sports Network
(formerly Versus) last season, plus
$124 million on the playoffs, including
$39 million during the Stanley Cup Finals,
according to Kantar Media.

0114 Currency Hockey Chart

“We’ve certainly lost a considerable
amount because of the work stoppage,”
says Seth Winter, executive VP for sales
and marketing at NBC Sports Group.
“There’s a lot of revenue that we won’t
necessarily know we lost because people
spent around us not knowing if there
would be hockey.”

Winter says NBC did what it could for
sponsors as games got cancelled. “We had
an obligation to the advertisers to try to
help them keep as many appropriate ratings
points and impressions in the marketplace,
so we diverted [some of their hockey
money] to NFL and collegiate football. But
that hurts us badly, because every time we
take a hockey impression and convert it to
an NFL or college impression, it takes that
impression out of sale.”

And not all advertisers took NBC up on
its offers. Cohen says that while NBC did a
good job of staying in touch and updating
Geico on the latest developments at the
bargaining table, the insurance company
already had a football budget and “the
hockey money was hockey money.” When
games didn’t get played, Geico got its money
back. “If it doesn’t run, you don’t pay for
it,” Cohen says. “If you buy hockey, you
want hockey. If you’re buying spots, you
can take something else.”

For NBC, a shortened season doesn’t
necessarily mean that spending will stay
the same with sponsors buying more
spots per game.

“Advertisers want certain unit loads in
games. If they think that three or four
units a game is the right amount of exposure
to have in a game, they’re not just
going to buy eight units and move them
up,” Winter says. Some advertisers might
move from two units to three units per
game, but it would be wrong to assume
that inventory will be tight as the season
gets underway, he says.

And it remains to be seen how much
media spending the league’s official
sponsors will have to commit to in a
truncated season. “The league did a
pretty good job of talking to some of the
big sponsors,” Winter says. “We’ll figure
out how we’re going to place their media
based on the new schedule.”

Now NBC has to get back into the market
to revive interest and convince sponsors
that hockey is a good investment. Winter
says hockey delivers elusive young upscale
men. “It’s one of the most difficult demographics
to reach,” even for other sports in
the first half of the year.

The return of hockey is especially
good for the NBC Sports Network,
which took a big hit from the lockout.
The network had to buy programming
to replace the NHL. And hockey brought
a certain level of circulation to the network;
not having it hurt other shows.

Fortunately for NBC, the NHL is
expected to have a full playoff schedule,
which drives ratings and revenue. And
once the playoffs start, it will be business
as usual because sponsors already have
their budgets in place, Winter says.

All of this assumes viewers come back
when the puck drops. Winter is optimistic.
So is media buyer Cohen.

“I think they’re coming into a void,
because football is done, and so I think
there is going to be some interest in seeing
what hockey looks like,” says Cohen,
who thinks ratings could be back to normal
by the playoffs. “If there are good
games and the players seem energized by
it, then I think it’s going to be fine.”

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