NFL Advertisers Spare No Expense as In-Game Unit Costs Set Records

·7 min read

As metaphors go, the old chestnut about how an expensive commodity may be secured by way of the forfeiture of “an arm and a leg” is the stuff of nightmares. Although the idiom spares us the gory particulars of the process of limb extraction/harvesting, the implication of a voluntary exchange of extremities for goods and services brings up all sorts of questions about health insurance (this is, after all, an elective procedure) and pain management.

For advertisers who’ve yet to snap up an allotment of the NFL’s broadcast inventory, the procedure’s about to spill over into three-stump territory. The standard insurance policy that covers such transactions doesn’t apply here, as scatter buys aren’t afforded performance guarantees. (In other words, an advertiser that buys in-game spots after the spring upfront bazaar isn’t eligible for relief via audience-deficiency units, should a broadcast fail to deliver sufficient impressions.)

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On the analgesics front, NBC, Fox, CBS and ESPN may offer a bullet for their ad partners to bite down on; although, given the record rates the networks secured during the upfront and the relative scarcity of units that remain to be sold, late holdouts should consider upgrading to a howitzer shell. Such anodyne considerations are likely to fall by the wayside completely if the NFL manages to top last season’s massive TV deliveries, at which point the cost of in-game spots will make the amputation trade-off look like a steal. Another year of 9% ratings gains, and NFL holdouts will resemble little more than disembodied heads zooming around on skateboards.

(“Oh, that’s our CMO. He waited until November to approve the purchase of three units in the Week 10 Cowboys-Packers game, and each one cost us $975,000—which is why he looks like Post-Industrial Accident Tony Hawk.”)

According to media buyers, the in-game rates for the 2022 NFL season are higher than they’ve ever been, as 30-second units in the top national broadcast windows have fetched as much as $860,000 a pop. In spite of the vertiginous cover charge, spring upfront sales were brisk, with more than 90% of all in-game avails snapped up by brands eager to get out in front of the league’s mammoth audience. Per Nielsen, the Sunday afternoon coast-to-coast window shared by CBS and Fox last season averaged 22.8 million viewers (or 23.8 million, when the afternoon Thanksgiving Day broadcasts were thrown into the mix), while the linear and streaming deliveries for NBC’s Sunday Night Football jumped 11% to 19.3 million.

National ad spots are about 7% more expensive than they were a year ago, yet most advertisers will tell you that the NFL’s unmatched reach takes the sting out of their investment. Not only did the NFL account for 75 of the 100 most-watched broadcasts of 2021, its net gain of 1.5 million viewers per week coincided with the wholesale collapse of TV’s entertainment deliveries. For example, the CBS/Fox Sunday afternoon NFL showcase out-delivered the average primetime series by more than 20 million viewers, and the number of adults 18-49 served up by the national window was more than 12 times the size of the scripted/unscripted demo.

Clearly, this is not a market for the meek of heart or the financially insecure, which is why it’s no accident that the top NFL advertisers—Progressive, Verizon, Geico, T-Mobile—are also among the 10 most profligate TV spenders. Given the year-over-year increase in the cost of each in-game unit and the projected hikes for the remaining scatter inventory, the league’s broadcast partners could rake in as much as $5 billion in overall sales, which would represent a 7% lift compared to last season’s $4.43 billion jackpot.

That said, in-game dollar volume may not be quite as robust if Amazon Prime Video’s first go-around with the Thursday Night Football package fails to catch on with fans. Because the tech giant/online retailer is bushwhacking its way through uncharted territory, it has had to offer cheaper rates than Fox did in the run-up to its final primetime NFL fling, with TNF units selling at a relative discount versus 2021. According to buyers, Amazon is booking spots in a range from $475,000 to $525,000 a piece, down from Fox’s year-ago upfront rate ($650,000).

In accordance with precedent, the three Thanksgiving broadcasts are commanding the steepest ad rates, which makes for some big payoffs for CBS, Fox and NBC. Fox will pull in the most Turkey Day loot, having seized the opportunity to sell a Nov. 24 Giants-Cowboys game that is expected to scare up as many as 40 million viewers. Fox has secured rates as high as $1.1 million for its in-game units. Barring a wholly unlikely obligation to issue makegoods after the Tryptophan Bowl, the network is on pace to rake in more than $100 million for its three-hour afternoon broadcast.

What with the size of the NFL’s Thanksgiving audience and the manner in which the holiday serves as the jumping-off point for Black Friday and the Christmas shopping season as a whole, CBS and NBC are also primed for lucrative scores of their own. All told, the three networks could pull in as much as $265 million in Thanksgiving NFL revenue, and that’s before pre- and post-game buys are blended into the stew. (NBC starts taking in money hand over fist well before the football gets underway, as its twin bill of the Macy’s Thanksgiving Day Parade and the National Dog Show is expected to generate another $70 million in ad revenue.)

While NFL projections are freighted with a Barry Bonds-size asterisk—even a relatively minor dip in ratings could result in the networks having to issue of millions of dollars in make-good units—the combination of lapel-grabbing rate hikes and what looks for all the world like an insatiable appetite for football suggests that the networks should walk away from the 2022 season with more ad revenue than they secured throughout the prior-year period.

Now, it’s one thing for those involved in the buying and selling of NFL inventory to insist that the market’s hotter than a ghost pepper with a blowtorch, but it’s another thing altogether when a media chief attests to the swelter while under the hairy eyeball of the Sarbanes-Oxley Act.

“We sold more NFL Sunday advertising in the current upfront market than we did across Sunday and Thursday combined in the prior year’s market,” Fox Corp. executive chair and CEO Lachlan Murdoch said during the company’s Aug. 10 earnings call. Murdoch went on to add that advertisers’ enthusiasm for the NFL extends all the way through Fox’s upcoming presentation of Super Bowl LVII, where sales are “pacing well ahead of schedule,” and “at record pricing levels.”

The season officially gets underway next Thursday, when NBC presents what may well prove to be a Super Bowl preview in a clash between the Bills and Rams. Advertisers looking to grab a last-second unit in the broadcast are out of luck, as NBC sold out the last of its inventory back in June. Laggards will also find that they’ve been shut out of the Sept. 11 Sunday Night Football opener (Bucs-Cowboys) and will have no luck trying to jostle for a scatter buy in a number of subsequent contests. The Oct. 2 Chiefs-Bucs game is out-of-sale, as is the Packers-Bills showdown set for the night before Halloween.

Similarly, if you had your heart set on snapping up a unit in CBS’ Sept. 18 Bengals-Cowboys game or Fox’s Cowboys-Packers outing on Nov. 13, suffice it to say that life is an endless scamper through the dark woods of futility and disappointment. If you pick up the phone now, maybe there’s a chance you can still grab a spot in a Dolphins game or whatever, but be advised that you’ll look pretty goofy as a head propped up on a skateboard.

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