Nice read on effect of ratings decline on the NFL

[thenepatsrule]

If the slide continues, and if they haven’t already, the networks airing NFL games will have to provide companies advertising their products on the telecasts “make-goods.” A network guarantees a certain number of viewers will tune-in to watch a game. If the guaranteed number is not reached, the network must “make-good” by offering the advertiser free commercial time in other programming.

If the downward ratings trend continues, it will affect what the networks can charge advertisers for NFL spots next season. For example, a 30 second spot on “TNF” costs around $523,000. If the “TNF” ratings continue slipping it’s reasonable to believe the price of a 30-second commercial will drop for the 2017 season. The same rate decrease would hold true for other network’s NFL TV packages if the ratings continue to fall.

Here’s why the NFL better be worried about the sinking ratings

 

[NashuaPats]

I hope the trend continues because if it does...

 

[ALP]

so after how long would "make goods" be in effect? how long will it take to actively start hitting pockets?

 

[oldrover]

This will not affect the NFL's pockets. The deals are done through 2022 IIRC. The networks will take the hit... they might come back to the NFL and ask for more flex scheduling, but the networks take all the financial risk for bad ratings.

 

[PatsFanSince74]

This will not affect the NFL's pockets. The deals are done through 2022 IIRC. The networks will take the hit... they might come back to the NFL and ask for more flex scheduling, but the networks take all the financial risk for bad ratings.

I'm not necessarily disputing that, but why are you so sure about that when "make goods" are common practice?

 

[Kjmass1]

This will not affect the NFL's pockets. The deals are done through 2022 IIRC. The networks will take the hit... they might come back to the NFL and ask for more flex scheduling, but the networks take all the financial risk for bad ratings.

Pretty sure the NFL has to guarantee a certain # of viewers so the stations do have some recourse. Not sure if that is for the entire season or per market basis.

No way would networks agree to a 10 year deal without protecting themselves.

 

[oldrover]

I'm not necessarily disputing that, but why are you so sure about that when "make goods" are common practice?

Make goods affect the networks... they have to provide additional ads. The NFL does not have to provide anything.

And it's the networks who guarantee viewership to advertisers, not the NFL.

The networks have been buying the NFL for years as a loss leader... to generate viewers that they hope to lure to their other shows. This year, the losses are bigger. But the NFL loses no money.

 

[BradyisGod]

I'm not necessarily disputing that, but why are you so sure about that when "make goods" are common practice?

Advertisers typically buy a total number of rating points from the network. If those numbers do not come to fruition then the make good comes in the form of additional advertising that go against the target the advertiser is seeking. For my company we attempt to buy a weekly trp number. Make goods come in for the following month or so if the return is way off. This can reduce the amount of inventory that the network has to sell in the future. HOWEVER as we have seen, my guess is the networks would actually negotiate with the league to shove MORE advertising into each game. You know when you feel lucky that they don't cut to a commercial break on those few times a timeout gets called? Kiss that goodbye. The networks will solve this by creating more inventory allowing for the make goods to pay out with no damage to their other inventory.

 

[The Boston Patriot]

It's all due to Manning and Chevrolet commercials. Possibly the most annoying since the Anacin headache commercials. No mortal human being can tolerate that level of torture for any length of time without going mad so people have to trun off the games or go batshit crazy.

 

[deroc5050]

Make goods affect the networks... they have to provide additional ads. The NFL does not have to provide anything.

And it's the networks who guarantee viewership to advertisers, not the NFL.

The networks have been buying the NFL for years as a loss leader... to generate viewers that they hope to lure to their other shows. This year, the losses are bigger. But the NFL loses no money.

Networks actually air NFL games at a loss? I find that hard to believe.

 

[XLIX]

Pretty sure the NFL has to guarantee a certain # of viewers so the stations do have some recourse. Not sure if that is for the entire season or per market basis.

No way would networks agree to a 10 year deal without protecting themselves.

What makes you say this? I've read plenty of articles over the years about NFL TV deals and none of them, including the one that started this thread, say anything about the league guaranteeing certain ratings or having to refund the networks if the games fail to reach a certain benchmark.

Certainly low ratings would have an impact on the value of the next TV deal 6 years from now, but there is nothing to indicate the NFL loses money right now.

 

[thenepatsrule]

It's all due to Manning and Chevrolet commercials. Possibly the most annoying since the Anacin headache commercials. No mortal human being can tolerate that level of torture for any length of time without going mad so people have to trun off the games or go batshit crazy.

I hate GEICO commercials ,always have