Big marketers have been threatening to “Just Say No” to rising sports prices. But as they say in baseball, those advertisers will have to wait till next year. That’s because prices for sports are poised to go up, not down, during the TV upfront selling season, say experts.

As the ultimate reality TV, sports is the one place where advertisers and agencies are confident that consumers will watch their commercials  without skipping or time-shifting.

ESPN says 97% of its viewing occurs live vs. 57% for entertainment programming on broadcast networks. Live sports and award shows are the two TV primetime genres most likely to be watched live, says Alana Johnson, VP/Communications for Nielsen. Look for sports to sell at a “premium,” i.e, higher individual prices, during the 2015 upfront season.

“Sports is live, which advertisers like. It engages viewers. There’s a lot of comments on social media about live sporting events,” says Brad Adgate, SVP/Director of Research for Horizon Media. “These are things that advertisers place a lot of importance on.”

Outside of sports, the TV outlook is grim. Overall ad spending is falling, as more companies shift ad dollars from network TV into digital video, mobile and social. MyersBizNet predicts spending on for broadcast and cable TV will fall 9.8% and 5.2% respectively this upfront season. Those losses will be partially offset by double-digit increases in digital ad revenue.

But the bullish outlook for sports in a down market is good news for ESPN/ABC, Fox Sports, NBC Sports, CBS Sports and Turner Sports executives as they roll out their upfront presentations to Madison Avenue media buyers and ad agencies this week.

And tough luck for marketers such as Honda and Anheuser-Busch InBev that have criticized the spiraling price of sports. Or questioned what they’re getting in return for all their investment.

“Sports is still king,”says Mike Sundet, the ex-A-B marketer turned Director of Sports & Entertainment for Momentum Worldwide, which works with clients such as Coca-Cola, American Express and UPS. “Those of us in marketing talk about digital and mobile and social. But TV is still where the big money is. And sports rules TV.”

Of course, sports leagues and networks could still shoot themselves in the foot by eventually pricing themselves out of business.

More TV customers are voting with their wallets and cutting the cord on expensive, sports-heavy cable packages they don’t want or need in favor of cheaper video options. If the trend keeps up, a la carte TV could become a reality.

But the “day of reckoning” that Honda VP Tom Peyton publicly warned about a year ago when fed-up advertisers walk away? That’s a year or two away, at least.

2015: A ‘Golden Year’ for Sports?

Thumping the table and threatening to boycott pricey sports programming sounds good. But it could backfire. Especially since 2015 is shaping up to be what Adgate calls a “Golden Year” for sports TV.

This year started with a bang as ESPN’s coverage of the first College Football Playoff resulted in the three most-watched programs in cable TV history, according to Nielsen.

On Feb. 1, NBC’s broadcast of the New England Patriots 28-24 win over the Seattle Seahawks in Super Bowl XLIX generated the biggest audience in TV history, according to Nielsen, with an average 114 million viewers.

As Kentucky Derby winner American Pharaoh runs to become the first horse to capture the Triple Crown since Affirmed in 1978, NBC is poised to cash in through its Preakness and Belmont Stakes coverage.

“If American Pharaoh wins the Preakness (on May 16th), the Belmont Stakes will be through the roof,” Adgate notes. “If not, it might as well be the fifth race at Aqueduct.”

Meanwhile, Fox is itching to launch its coverage of two big events in June: the FIFA Women’s World Cup Canada 2015 and U.S. Open golf tournament.

A record 119 million Americans tuned in for ESPN and Univision’s coverage of the 2014 FIFA World Cup from Brazil, according to Nielsen. Fox is betting fans will embrace the U.S. women’s team as it seeks its first World Cup title since 1999.

“We’ve sold all the major positions,” says Neil Mulcahy, EVP/Fox Sports Sales. “If you look at the viewing experience, it’s families, it’s millennials, it’s Hispanics. Everything about it is a great product for us.”

Fox caught a break when golf’s biggest ratings draw, Tiger Woods, publicly committed to playing during the network’s maiden coverage of the U.S. Open from June 18-21. But who knows if Woods will show up due to lingering injuries and swing problems.

Looking ahead, CBS president Les Moonves said he thinks his network can pull a record $5 million, even $6 million, for 30-second commercial spots during its broadcast of Super Bowl 50 on on Feb. 6, 2016.

That would be a big bump from the $4.5 million NBC charged in February. And roughly double the $2.5 million CBS got for 30-second spots for Super Bowl XLIV in 2010.

ESPN comes out Swinging at Upfront

As the 300-pound gorilla, ESPN usually ignores the competition. But the self-proclaimed “Worldwide Leader” vigorously defended its crown during its upfront presentation on May 12. Eric Johnson, VP/Global Multimedia Sales, says

that ESPN’s had enough of TV competitors claiming they can provide the “ESPN audience” to advertisers. “The only place to get the ESPN audience is on ESPN,” Johnson says. “The only place to get the engagement that we have with our fans is through ESPN.”

ESPN announced Monday that it’s moving the Mike & Mike morning show to New York from Bristol, Conn. That way it can better share guests and on-air talent with ABC’s Good Morning America. At the Upfront yesterday, the net also touted its success with the NFL’s Monday Night Football and the first College Football Playoff. “We fulfilled a dream there,” says Johnson, referring to the college playoff. Even better, this year’s two Semifinal games will be played on New Year’s Eve, “creating a new sports holiday,” he added.

ESPN is also proud of its ability to reach women and diverse audiences.The network has been running an ad campaign saying ESPN digital reached more than 30 million women in the 4th quarter  or more than InStyle and iVillage combined. ESPN media reaches 20 million Hispanics a week  or 60% of all Hispanics in the U.S.

Meanwhile, sports played a smaller role during Fox’s afternoon presentation on May 11. Fox showed a sizzle reel to tease its Women’s World Cup and U.S. Open coverage. The net also played up its top-rated Fox NFL Sunday pregame show and Sunday afternoon NFC package. “I find more dollars are coming to sports than ever before. We wrote more money than we ever did for the NFL last year,” Mulcahy says.

Two years ago, Fox made the mistake of over-promising and under-delivering when it touted Fox Sports 1 and Fox Sports as competitors to ESPN and ESPN2.

Mulcahy admits Fox was too “optimistic.” But now that the number of live sports on FS1 and FS2 are finally catching to the early promises, things are slowly turning around. Madison Avenue has reacted well to the hiring of ex-ESPN executive Jamie Horowitz, he says.

“Every single client and advertiser is rooting for us in a big way. There hasn’t been any competition to ESPN,” Mulcahy says.

Today, Turner planned to promote its live sports programming from the NBA, NCAA, MLB, PGA, NASCAR and other sports, according to Jon Diament, EVP of Sports Ad Sales. During 2014, 97% of Turner’s NCAA programming was viewed live. And 96% of its NBA and MLB playoff coverage.

The NBA extended its TV deals with ESPN and Turner through the 2024-2025 season last fall.That leaves virtually all the major TV sports rights locked up for years. It puts companies such as Turner, which have long-term deals with major sports, in a strong position.

Said Diament, “With all the new networks like FS1, there’s now a glut of available sports programming. But Upfront is still important because advertisers/agencies try to buy the high quality sports inventory  Super Bowl, NCAA March Madness, NBA All-Star etc  first before it sells out. Then they backfill later with lesser programming.”

During 2014, sporting events generated roughly half of the 499 million tweets sent in the U.S., according to Nielsen. Sports can help advertisers become part of the water cooler conversation in a way other programming can’t.

Manny Pacquiao trainer Freddie Roach credits Foot Locker’s humorous “He said Yes!” commercial from BBDO last fall with helping to pressure Floyd Mayweather into finally agreeing to the Fight of the Century, which took place May 2nd.

Foot Locker has used athletes ranging from boxers Mike Tyson and Evander Holyfield to NBA stars Kyrie Irving and John Wall in its TV ad campaigns. It will continue to spend on sports.

Foot Locker advertises on live sports “because they are DVR-proof,” says Jed Berger, VP of Brand Marketing.“They are certainly appealing to somebody who has a customer that loves sports.”

TOP U.S. ADVERTISERS BY EACH SPORT:

NFL: Bud Light
MLB: Chevrolet Silverado
NBA: State Farm
NHL: Discover Credit Card
NASCAR: Sprint
GOLF: FedEx
SOCCER: Adidas
COLLEGE FOOTBALL: AT&T
COLLEGE BASKETBALL: Capital One

Source: Nielsen’s 2014 Year in Sports Media Report

Cynopsis Sports spoke with Craig Sloan, Senior Vice President, Home Team Sports for details.

On this year’s market:
This year, our message has been two-fold. First, we’re continuing to develop our product and the research behind it to show that we should be a primary entry point for a brand when they look to invest in sports, rather than secondary or tertiary. We want them to think about the way that viewers consume their sports content. They go to watch their team, not just a team. The second part is to convey that the earlier they invest, the more opportunity they have to get a pole position within our content. We’re narrowing the integration inside our game, but we’re looking to make it more impactful and that it stands out for our partners.

On the benefits of the “pole position”:
We have integrations inside our content, unlike some of the national networks where the leagues restrict it. So it’s really about the possibilities that our production and marketing groups [create] for embedded opportunities.

On the benefits of the local fan:
While our competition can also offer an awareness perspective, our viewers get a feeling from watching their beloved team that changes their level of trust in that brand. Our research shows that there’s also intent to take action or purchase. There’s advocacy there too, so our viewers are more likely to socialize that brand and stay loyal to it. Plus, people look at it as supporting their community.

On ratings:
We’re seeing some great stories where our weighted average for all three sports from across the country are actually up year-over-year for MLB, NBA and NHL. Our competition is not seeing that same level of success. So obviously, entertainment has been deeply impacted by ratings defection, but now we’re not only holding strong but we’re also in a growth pattern. The thing that seems to be drawing people most is our baseball coverage, where there’s a lack of competition and high ratings. The other one that has jumped for us is our college football model. We have two networks, the Big Ten Networks and the Pac-12 Networks that control all their content so not only do they control the live games on their own networks, they also control the ability to put out content socially. We’ve been able to go into the marketplace and talk about getting a brand tied not only to their linear coverage, but through streaming, digital properties and social as well.

Roberta Caploe: Editorial Director @robertacaploe
Diane K Schwartz: Senior Vice President, Media Communications Group 

Cynopsis Ad Sales: Mike Farina | VP, Sales | 203-218-6480
Classifieds Sales: Trish Pihonak | Director of Operations | 203-899-8459

Copyright Cynopsis 2015