Media
Buyer & Planner Today sat down to discuss myriad advertising topics with
Kevin Collins, SVP, director, broadcast at Initiative, where he oversees sports
media buying for clients like Miller Coors; and with Sam Sussman, SVP, director
at Starcom, where he oversees sports buying negotiations for clients such as
Allstate and Best Buy.
What was the impact, if any, of
the NBA lockout and the resulting delayed start of the season on the NBA
TV partner networks' advertising?
Collins: The lockout didn't really impact
advertising that much for the networks in the long-term. Turner for the most
part will have the same number of games as will ABC. The TV schedule will be
more on ESPN. There were some clients that had to spend ad dollars in
fourth quarter and for them, some money was shifted into the National Football
League and National Hockey League telecasts and some to younger male-oriented
networks like Comedy Central, Discovery and FX. No NBA money from first or
second quarter 2012 was moved elsewhere though. We did not anticipate that
the entire season would be cancelled. If the season had been cancelled, a lot
of the advertiser dollars would have gone to the NCAA Men's Basketball
tournament [on CBS and Turner networks TNT, TBS and Tru TV].
Sussman: The lockout had minimum impact
for advertisers. Most of the ratings points come during the post season. But
for advertisers who needed to be in fourth quarter, some of the options were
younger-skewing male networks and other sports networks. The NBA partner
networks may have lost some ad revenue but nothing significant and no one moved
any money beyond fourth quarter.
With the NFL's TV partners all
signing new, extended deals with the league and agreeing to pay huge TV rights
fee increases going forward, will that have any impact on what advertisers are
expected to pay for advertising in those games? Do you expect the networks to
try to help monetize those deals by asking for large increases in advertising
rates?
Collins: The TV networks for the most
part have been losing money on their NFL rights deals for years. The broadcast
networks in some instances have written off those loses. They understand that
having the NFL telecasts have other intangible benefits, like using them to
promote their entertainment programming to male audiences. Advertisers are
not going to pay the networks any more than the marketplace dictates. Just
because they paid 60% more to renew their rights, doesn't mean we're going to
pay 20% more for advertising. But having said that, the NFL is a very important
part of certain advertisers' marketing plans and its ratings are high. So you
just can't walk away from the NFL. This past season we paid increases of less
than 10%. Everything going forward will be negotiated.
Sussman: There are five viable broadcast
partners for NFL telecasts, so the marketplace will dictate the price. There is
enough competition to move money to another network if we have to. The networks
going forward can use retransmission fee money to put toward future rights
fees. And remember, the networks also negotiated additional rights for new ad
revenue streams like mobile and other platforms that should also help them
offset their increases in rights fees.
How viable can the renamed and
rebranded NBC Sports Network-formerly Versus-become as a competitor to ESPN
down the road?
Collins: Content is king and once it
starts picking up more marquee content, including more professional league TV
rights, it can become a viable competitor. In the next few years, rights will
be up for renewal, with NASCAR and Major League Baseball, and the NFL is
also talking about another weeknight rights package. Any viable sports network
needs live sports so it has to get involved in trying to get some of these
properties. It already has the NHL. It has to build on that.
Sussman: Several of our clients are
involved in the launch of NBC Sports Network from Versus. Its success as a
full-fledged competitor will not happen overnight. But they have already been
able to cobble out some more live sports. They have the right vision and the
right people in charge. Now it will be a combination of getting the right
sports programming and doing the right type of marketing to grow its audience.
Right now they have solid distribution but they have room to grow it. We're
excited to watch them build it. CBS Sports Network is also a viable option for
all of our clients. We need to see what they do to build programming beyond
college sports and also about increasing their distribution.
Major League Baseball Network has
just started its fourth year. How do you see it as an ad vehicle for your
clients?
Collins: MLB Network has a good story to
tell. It's a great property. Its ratings are increasing and it has
some live games and it has good year-round programming. It can become
a real major player if in the next TV rights deal it gets more live games in
its package.
Sussman: We consider MLB Network a viable
partner for our clients and it's [among] the networks we consider. It has solid
distribution, live games and quality shoulder programming. The network has good
leadership, has some of the best on-air talent out there and they attract avid
baseball fans.
How Important is being an
Official League Sponsor to an advertiser?
Collins: Right now, Miller Coors is the
official beer of the NHL. Being an official sponsor can be really good for an
advertiser but a lot depends on what you have to pay for those rights. You can
get a lot of exposure, but you can't overpay. And advertisers can still have an
association with the pro leagues without being the official sponsor in a
category. There are other ways to get league audience exposure. When Miller
Coors was the official beer of the NFL, we only had relationships with about
five or six local teams. Today, while no longer the official beer of the
league, we have relationships and exposure locally with about 25 NFL
teams. So being the official sponsor in a category is not always vital.
Fox was just awarded World Cup TV
rights for 2018 and 2022. From an advertiser point of view, does it make a
difference which network televises it?
Sussman: The TV audience for the World
Cup has grown to make it a major event. Fox knows how to cover big events as
well as anyone. Fox seems to be serious about soccer. It has its dedicated
soccer channel. ESPN did a great job with the World Cup but so will Fox.
