Is It Possible CBS Lost Money on the Super Bowl Despite Selling $240 Million in Ads? Not When You Calculate All the Money the Game Brings In to the Network in Other Ways LA Times Company Town blog, TheWrap
Updated on 2/8/13 at 10:20 a.m. to reflect information in a Los Angeles Times story on this same subject, in both our headline and the body of this item. We needed to have reported on the Times account in our original reporting of this story, and we apologize to our readers and CBS for not doing so.
"In a new report, the industry consulting firm SNL Kagan says CBS 'likely broke even or lost a little money' on its broadcast of the Super Bowl last Sunday," writes Joe Flint in the Los Angeles Times' Company Town blog.
But as Flint then quickly notes, "But that calculation might be a little too simple for something as complex as figuring out whether the Super Bowl was as happy an event for CBS as it was for the Baltimore Ravens, who beat the San Francisco 49ers to win the Lombardi Trophy."
And Indeed, a CBS spokesman said that the NFL and Super Bowl were profitable.
As TheWrap.com reports in its coverage of the Kagan report, Kagan claims that the broadcast of the Super Bowl brought in about $240 million. But, says TheWrap, CBS paid about $220 million for the rights to broadcast the game, the Kagan report notes.
However, Flint, in his account, notes the revenues that Kagan did not include in its calculations. "Kagan seems to be forgetting that CBS also owns dozens of TV stations -- including outlets in Baltimore and San Francisco -- that had local commercial spots to sell in the game, and those spots went for a premium too. Maybe not the close to $4 million per 30 seconds that the network got, but there were lots of high six-figure and even seven-figure deals there. Overall, the network took in tens of millions in local advertising, a CBS spokesman said. In New York alone, CBS sold local commercials for more than a million dollars per-spot.
"CBS also sold ads for the Internet coverage of the game, which was basically found money for the network."
Flint also details the "halo" effect CBS gets from carrying both the NFL and, every several years, the Super Bowl. As Flint notes, having this programming translates to real monies for CBS in these other ways, such as in increased retrans fees. Plus, the network uses both the NFL and the Super Bowl to promote other programming, which can ultimately increase ratings for those shows and bring in more revenue to the network.