Whatever the reasons behind the NFL’s decline in ratings, and they’re likely myriad, it was always going to be tough for that big of a drop to not impact the bottom line.
According to AdWeek, that’s exactly what happened:
It didn’t happen until the final month of the regular season, but the 10 percent drop in NFL ratings this year finally dented the bottom line when it came to football-related ad revenue, according to new data from Standard Media Index.
In-game NFL advertising revenue during the regular season declined 1.2 percent this year, to $2.42 billion, down from $2.45 billion in 2016.
If you’re wondering why it would have been possible for the league to lose ratings but still gain ad revenue, it’s because the rate went up; however, that ended up not being enough, as makegoods rose over the last month of the year, wiping out the potential for growth:
The data from SMI, which tracks 70 percent of national ad spending from global and independent agencies, is based on total ad spend on NBC, CBS, Fox and ESPN broadcasts during the regular season.
While the average cost of a 30-second spot grew 1.2 percent this season, from $499,000 to $505,000—and commercial loads were flat—it ultimately couldn’t compensate for a jump in makegoods to make up for this season’s 10 percent ratings drop in total viewers. Makegoods accounted for 23 percent of units this season, up from 21 percent in the 2016 season.
The decline represents a big number in a vacuum, although in the context of the league’s massive overall revenue, it’s tough to really point at a 1.2% drop as something of an immediate problem. But it would be silly for the league to ignore, too; the NFL had been on a massive growth trend for a few years in a row:
The ad revenue decline ends several years of overall NFL ad revenue growth. 2016 saw a 3 percent jump in ad revenue to $2.45 billion, while 2015’s $2.38 billion in ad revenue was a 9.6 percent increase from 2014’s $2.17 billion figure.
With the future of football not quite as rosy as it had been for decades, it is fair to wonder whether this portends further bad news. But there is one big positive still to come for the league and their broadcast partners:
While regular season revenue was down slightly, NBC Sports expects to generate around $500 million in Super Bowl LII-related advertising on Feb. 4, which would be a single-day record for one media company. That includes $350 million worth of in-game advertising, where 30-second spots are averaging north of $5 million.
That’d be a massive day for NBC and the league, and it’s evidence they’d likely point to as an example of the strength going forward.