Sports overload? Advertisers are starting to worry
An abundance of it on TV has some marketers questioning the soaring costs involved and wondering if viewers can even keep up.
The cost of sports programming is skyrocketing because it's one of the few genres that large numbers of people still watch live. Sports programs often top the ratings on both cable and broadcast channels. Their costs, however, show no signs of slowing, which is starting to worry some players.
News Corp.'s (NWS) Fox, Walt Disney's (DIS) ESPN and Time Warner's (TWX) TBS spent $12.4 billion last year for the broadcast rights for Major League Baseball from 2014 to 2021, a deal that will double MLB's annual payday.
Comcast's (CMCSA) NBC and CBS (CBS) are paying 63% more to broadcast National Football League games under their $28 billion deal that runs through 2022. The National Basketball Association got a 20% increase in its latest TV agreement, while the National Hockey League more than doubled its take in fees for its latest broadcast rights contract.
"Outrageous sports costs have some advertisers and cable and satellite operators asking whether the cost justifies the return on investment," according to Advertising Age.
Blaise D'Sylva, vice president for media, sports and entertainment marketing at Anheuser-Busch InBev (BUD), made the startling argument that sports leagues may need to play fewer games to cut costs and predicted that would happen in the next decade or so. The corporate parent of Budweiser is worried that there's so much sports programming that it's difficult for advertisers to capture viewers' attention.
"We'd have the ability do more with a sport -- because I don't have to spend more money across a longer season," D'Sylva told Advertising Age.
His remarks were echoed by other advertisers. PepsiCo.'s (PEP) Adam Hunter is quoted in Advertising Age saying his company has "to get better" at measuring the effectiveness of its sports advertising.
If advertisers start balking at the rates for sports programs, the media companies are in big trouble.
Jonathan Berr owns a small stake in CBS. Follow him on Twitter @jdberr.
I've never been a real sports junkie although during college days I spent time to at least go to the games. My sons and daughter in spite of attending three major universities never even look at the the "superbowl". It isn't a question of their money just how they spend it. They do their own sports like yoga, off road trail riding, hunting, travel, and even sailing. Could it be professionals sports and universities are spending too much time and money promoting? Apparently, the YGEN doesn't care about sports heros!
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