Tom Brady and the Tampa Bay Buccaneers will be defending their Super Bowl title in 2021. (Photo by ... [+]
The 102nd NFL season kicks-off tonight with the defending Super Bowl champion Tampa Bay Buccaneers hosting the Dallas Cowboys. The game will air on NBC, Telemundo and streamed on Peacock.
The NFL continues to be a magnet for advertisers. For the 2020 regular season and postseason (excluding Super Bowl LV), Standard Media Index (SMI) reports the NFL generated $3.3 billion in ad revenue for their television partners. Despite an overall sluggish ad economy last year and lockdowns from the pandemic, this represents a 3% increase from the previous season. For 2021 with new product categories and a stronger ad marketplace, the networks are reporting stronger ad pricing increases.
2020 Regular Season: With the NFL’s 2021 regular season upon us, the league continues to garner top advertiser revenue. According to SMI, the NFL games in 2020 generated $2.77 billion in ad dollars, a 3% increase from the 2019 regular season.
Fox with a full slate of Sunday afternoon games and Thursday Night Football accounted for 41% of all regular season ad dollars, a year-over-year increase of 5% in ad revenue. NBC, with their top-rated Sunday Night Football, accounted for 25% of all NFL ad dollars for 2020. NBC however, was the only network to register a year-over-year decline in ad revenue (-9%).
CBS, televising games on Sunday afternoons, accounted for 23% of all ad dollars and recorded the sharpest increase in ad revenue of any broadcast network from 2019 at +10%. ESPN’s Monday Night Football garnered 8% of ad dollars for the season and a slight 1% increase in revenue from 2019. The NFL Network, which televised only seven games, accounted for 2% of all revenue, the league owned cable network however, had the largest-year-over-year increase of 18%.
Post Season (excluding Super Bowl LV): SMI reports ad revenue for the higher rated post season totaled $613.7 million across three weekends in January 2021. The ad dollar amount was a slight increase from January 2020 of $602.5 million (+1.9%). The NFL had expanded the postseason to now include seven teams from each conference (instead of six). Hence, leading up to the Super Bowl LV there are now twelve postseason games compared to ten in previous years. Among networks, Fox once again led, accounting for 46% of ad dollars, followed by CBS (36%), NBC (16%) and ABC (2%).
Average Audience/CPMs: In 2020, the NFL continued to be a ratings juggernaut averaging 15.4 million viewers for all regular season games. Although that was a 7% drop-off compared to 2019, it was triple the average audience of a regularly scheduled prime time show in the fall of 2020. In 2020, NFL games accounted for 69 of the 100 most watched television programs for the entire year. NBC’s Sunday Night Football has been the top-rated broadcast TV program in primetime for an unprecedented nine consecutive years. On Fox the late Sunday afternoon game dubbed “America’s Game of the Week” averaged 23.2 million viewers in 2020. It marks the twelfth straight year the late afternoon national game was the top-rated overall program on television.
As a result, SMI data found the CPMs for adults 18-to-49 during the NFL regular season in 2020 was $75, on par with linear broadcast prime time (excluding sports) CPM of $77. With a CPM of $92, for adults 18-to-49 advertisers paid a premium for the higher rated postseason games.
2021 Season: The biggest news of the offseason was the extension of NFL rights fees for CBS, ESPN/ABC, Fox and NBC. The four networks agreed to pay $89.5 billion over the next 11 years to continue to televise NFL games. This is a more than 75% increase from the current agreement. The contracts will take effect with the 2023 season and run through 2033. (The ESPN deal starts in 2022.) NBC, CBS and Fox will all pay around $2 billion and ESPN will pony up $2.7 billion. With the new contract Amazon
The most noticeable change for the NFL in 2021 will be increasing the regular season to 17 games per team over an 18-week season (272 total regular season games). The NFL had been playing a 16-game schedule since 1978. With the extra week, Super Bowl LVI is scheduled for February 13, 2022, the latest date ever for the “Big Game”. The Super Bowl will air on NBC at the same time the network will be airing the Beijing Winter Olympics (February 4-20, 2022).
It’s been reported there are fewer than five ad units left for Super Bowl LVI. NBC is charging $6 million for a :30, an 18% increase from last year’s game, with a few ad rates reaching $6.5 million. Among product categories buying ads include the return of theatrical released movies and digital wallets. It’s been reported that Fox is already beginning to sell ad units for Super Bowl LVII in February 2023.
With strong ratings and a desirable target audience, the NFL and their television partners have for years had a number of familiar advertising categories including automotive, telecom, beverages, finance and many others. For the 2021 season we can expect an array of new product categories. As a result, the networks have been reporting strong ad demand for NFL games this season with pricing increases in the low double-digits, the highest in about a decade.
Sportsbooks: The product category getting the most attention is sports betting. In 2018 the Supreme Court overturned a federal ban on sports wagering. Since then, states across the country have been voting to legalize sports betting. While the NFL was originally opposed to legalized gambling, for the 2021 season, the league will allow each network to accept six gambling ads per telecast: one during pregame, one per quarter and one at halftime. TV partners Fox, ESPN and NBC have also partnered with a sportsbook. In addition, FS1 and ESPN both televise gambling programs each day.
Front Office Sports reports, the NFL, in a first, has made marketing agreements with Caesars, DraftKings, and FanDuel. These marketers will have access to the NFL intellectual property including the use of game footage. Collectively, the deal is reportedly near $1 billion over five years. In addition, last month, the NFL has approved FOX Bet, MGM, PointsBet, and WynnBet as sportsbook operators for the 2021 season. Sportsbooks is expected to be the biggest emerging ad category for the NFL since fantasy sports (which some called another form of gambling) in 2015.
The signs for legalized gambling are pointing upward. Play USA expects nearly $12 billion will be wagered this season on NFL games (and $20 billion when college football is added) at legal sportsbooks. In addition, the American Gaming Association forecasts 45.2 million Americans will bet on the upcoming NFL season, up 36% from last year. AGA also found that 25% of NFL fans are more excited for this season than previous ones, up from 18% last year. Some industry analysts predict the ad spend for legal sportsbooks during NFL games this fall will reach $1 billion.
Streaming: The new agreements between the NFL and the television partners allowed for live games to be streamed on Paramount+, ESPN+, Peacock and Tubi. Hence, streaming video will be another product category heavily promoted during the NFL games. The Fox owned Tubi, an ad supported streaming service, will be the sponsor of their post-game show, The OT.
Streaming video on NFL games can promote a number of other premier sporting events including NHL, MLB, grand slam tennis, PGA Golf, “March Madness”, soccer, UFC, WWE and the Beijing Olympics to grow subscriber counts. The network owned streaming services could also be an additional revenue source by selling different online ads. NBC said however, for 2021, Peacock will “simulstream” ads from Sunday Night Football.
Cryptocurrency: Sports Business Journal cites cryptocurrency as another emerging advertiser for NFL games (and other televised sporting events). Industry sources project ad spending for the category could total $100 million over the next 12 months. This fall Crypto.com will be running ads on Fox during NFL games along with MLB postseason and college football games and studio program College Football Extra. Tom Brady and Gisele Bündchen are appearing in ads promoting FTX, a crypto exchange. It is part of a $20 million campaign that will air on NFL games throughout October. While the NFL is looking into possible marketing agreements, it has informed the 32 teams that they are, for now, prohibited from selling sponsorships to crypto trading companies or selling any non-fungible tokens (NFTs).
The new product categories with NFL games, will increase demand resulting in higher ad pricing. According to a study by Bill Harvey Consulting, advertisers are flocking to live sports because of their strong return on ad spend. Bill Harvey notes, “Live sports engages viewers and makes them more attentive to advertising.”
With a longer regular season, a stronger ad marketplace, the popularity of live sports and new advertisers willing to invest in NFL games, a more sizable increase in ad revenue than last year’s +3% is anticipated. This couldn’t come at a better time for the networks with the huge increase in TV rights fees right around the corner.
