After a down 2016, NFL ratings fell again in 2017, and that could negatively impact how much broadcasters and digital media companies are willing to pay for rights packages.
According to MoffettNathanson analyst Michael Nathanson, regular season ratings were down 13% and the playoffs are down between 12% and 20%. He said that the NFL is experiencing a structural decline.
In the near term, the impact of those declining ratings will be reflected in quarterly advertising revenues for broadcast partners and in the bidding process for Thursday Night Football rights, which Nathanson said reportedly drew smaller bids from CBS and NBC.
“Longer term, we think that the continued weakness of the NFL could pose a risk for broadcasters who may be forced to bid-up for rights if Disney chooses to move to a Sunday night or day package and pushes NBC into the Sunday day package bidding. At the same time, the NFL will need to encourage digital bidders to enter the auctions to drive up prices, but may be uncomfortable with the low ratings produced by Twitter and Amazon during these early experiments,” said Nathanson in a research note.
Thursday Night Football rights are up for bids right now and Monday Night Football rights will be up for grabs after the 2021 season.
Not helping things for the NFL are reports that ad spending declined 1.2% during the 2017 regular season, according to Standard Media Index.
The firm’s total ad spend figures for the 2017 NFL regular season is based on figures from Sept. 7 to Dec. 31 for NBC, CBS, Fox and ESPN broadcasts.
“For the first time since we have been tracking the market we saw a slight drop of in-game dollars. Despite a fairly significant fall in ratings, CPMs were strong and demand continued to be high,” said Standard Media Index CEO James Fennessy in a statement. “This again demonstrates that the NFL remains the powerhouse of national TV ROI. Advertisers understand the exceptional return they get as a result of the large, engaged and guaranteed audiences enjoying a full screen experience in this unique environment.”
According to SMI’s recent totals, NFL ad spend totaled $2.17 billion in 2014, then jumped 9.6% to $2.38 billion in 2015 before rising 3% to $2.45 billion.