Sports Upfront Is Robust But Less Wild Than Prime Time

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Like most TV commercials in this year's go-go upfront market, sports spots will cost more next season, although the price hikes will be less than those paid for prime time.

The sports upfront advertising marketplace is under way, and both buyers and sellers see strong demand fueling price hikes and, in some cases, substantial price hikes.

But the increases are less than the 15%-plus the broadcast networks were getting for their prime time inventory and, depending on the client and the sport appear to range from mid-single digit to low double digit gains.

When it's all added up, this year's TV sports ad spending will total nearly $7 billion. A little more than $2 billion of that will be accounted for by NFL ads.

"It's a good marketplace but not as robust as prime time," says Bob Riordan, senior vice president, national broadcast, MPG. "It's good sought-after programming so there's a lot of demand out there for the NFL and other sports product. But it's early, and there is no frenzy."

Pro football is probably in the best shape; when it's all said and done, both CBS and Fox executives say they expect to average 10% or 11% gains in prices on NFL ad inventory. Riordan's response: "God bless them and the Red Sox."

That's the expectation at least, with both networks having sold 40% or a little more of their upfront National Football League inventory. Whether they achieve that average by the time they sell out remains to be seen. The NFL market probably won't wrap up until mid to late July.

ABC's Monday-night package and ESPN's Sunday night are about 80% sold at prices reported to be in the high-single-digit range. Ed Erhardt, president of ad sales and marketing for ESPN/ABC Sports, confirms the sold level only.

But last season's NFL ratings make a good selling point. According to Nielsen Media Research, all three broadcast networks experienced double-digit ratings gains for young men (18-34) and double- or single-digit gains among men 18-49.

Among those getting their NFL money down early are the beer and auto advertisers, sales executives say. Anheuser-Busch has reportedly completed its football deals, up through and including next year's Super Bowl. Chrysler and Honda have also done deals.

College football spots are also being sold now and are said to be commanding rate hikes slightly lower than pro football.

ESPN has sold about 30% of the available upfront ad inventory for next season's National Hockey League and National Basketball Association games, Erhardt confirms. The most he'll say about rates is that they are generally in line with the range of increases being achieved in the ongoing cable upfront market: 4% to 12%, although others say the double digit figures are overly optimistic.

The sports upfront is different from the prime time upfront that kicks off the ad-selling season off in mid May. Sports are frequently marketed as "events," and, because they are seasonal, each tends to have its own upfront but with crossover to other markets.

The NFL has its own market, but some inventory also gets sold in the prime time upfront. There's even a separate market for the Super Bowl, which remains the single highest-ticket event an advertiser can buy on TV. Fox won't even begin selling NASCAR, which debuts on the network in February, until the fall.

CBS started selling Super Bowl spots for the January 2004 game and regular-season NFL during the main broadcast upfront.

It's unusual for football to start moving this early, but John Bogusz, executive vice president, sports sales, CBS, said he wanted to jump-start the network's sports marketplace off the red-hot demand for prime time sales that preceded it.

The Super Bowl continues to draw record pricing—this year's range so far being between $2.2 million and $2.3 million per 30-second spot, or slightly higher than the average $2.2 million that ABC got for the 2003 game. Spots in the division championships will go for close to $1 million per 30, while spots in earlier playoff contests will cost between $400,000 and $600,000.

"With the strength of this prime time upfront marketplace, we were able to move some sports along with it," says Bogusz. And some agencies were eager to do some of their sports business early to take advantage of better rates, he added.

While CBS sold some football early, Fox took advantage of the strong main upfront to move some baseball inventory, confirmed Jon Nesvig, president of national ad sales at Fox. At this point, Fox has sold almost 60% of its Major League Baseball inventory, although the sport itself has seen something of an attendance slump this season.

Both football and baseball are pacing ahead of last year's pricing "although it's not the same kind of runaway market that prime time was," says Nesvig.

The Athens Olympics on NBC next summer (Aug. 13-29, 2004) will account for close to $1 billion. People familiar with the numbers say NBC's targeted goal is $900 million and the network has reached the 80% mark, or roughly $720 million, with another year left to sell. It's not unusual for NBC to surpass the stated sales goal for the Olympics.

One TV sport that continues to show softness is golf, which has traditionally relied on financial-services suppliers and golf-equipment manufacturers as two of its strongest categories. Both categories have yielded reduced spending over the past year. Of all the sports right now, "that's the toughest sell," says one ad executive.

Will it bounce back? It should improve as the general economy improves, executives say. "We're still waiting for some of the financials to come back, but it's been a little more active," says Bogusz.

Erhardt agrees: "We're starting to see some uptick there."

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