Major Sports Carriers Getting NBA Price Hikes

Oct 27, 2003  •  Post A Comment

On the eve of another National Basketball Association season, ABC/ESPN and TNT are securing moderate price increases from advertisers for commercials-even though the games’ ratings slipped in some key areas last year.
Trish Frohman, senior VP of Turner Sports Sales, said TNT is ahead of its sales pace of a year ago and now has sold about 70 percent of its goal for the regular season and the playoffs. About half of that amount comes from multiyear deals with advertisers.
The NBA season starts Oct. 28.
“We are looking at high-single-digit CPM increases,” said Ms. Frohman. “The sports marketplace is good, not great.”
Ed Erhardt, president of ESPN/ABC customer marketing, said both ABC and ESPN sales similarly are ahead of schedule, but he declined to give details.
Media executives believe that like last year, ESPN/ABC is somewhat behind Turner in sales activity-but not by much. Executives also say both TNT and ESPN are doing deals at flat to low-single-digit cost per thousand viewer price increases.
Last season, ESPN’s regular season basketball ratings averaged 1.2, on par with TNT ratings. ABC’s regular-season games averaged a 2.6 rating, down vs. NBC’s 2.9 average rating of a year before. ABC’s rating was also a bit lower for the playoffs, a 4.8 to NBC’s 5.6. NBC broadcast the NBA games for almost 20 years until ABC/ESPN took over its part of the NBA TV package last year.
TNT’s regular-season ratings were virtually flat at a 1.2. TNT did better, however, in the playoffs, posting a 3.1 rating, 22 percent higher than the year before. TNT carried the Western Conference finals, which tend to be higher rated than the Eastern finals. ESPN’s playoff ratings, which included the Eastern Conference finals, were a 2.4. TNT also had the highest-ever cable basketball game, the 2003 All Star game, which scored 6.6 rating.
The 2003 NBA finals last spring on ABC, featuring the San Antonio Spurs vs. the New Jersey Nets match-up, earned a Nielsen Media Research 6.5 rating/12 share-a drop of 36 percent vs. the year before, when on NBC the Los Angeles Lakers played the Nets.
“The ratings performance went down,” said Larry Novernstern, senior VP of national broadcast for Deutsch, New York. “From a supply-and demand-standpoint, if they can sell it for more because there is less [overall gross rating points], that would tend to make sense.”
Overall, media executives believe ABC/ESPN and TNT intend to sell around 75 percent to 80 percent of their respective advertising inventory, leaving the remaining commercial time for make-good inventory should the network not meet its advertiser guarantees.
Media executives say Turner is offering a ratings guarantee of a 1.2 Nielsen rating for either a male 18 to 34 or a male 18 to 49 audience for its regular-season games. ESPN is guaranteeing a 1.3 rating for the same demographics.
Last year was the first of a six-year contract the network has with the NBA. There was uncertainty as to how to price commercial time because many games shifted from broadcast to cable. At the same time, TNT had fewer games-going from three games a week to two.
Fewer regular-season games were broadcast on ABC than on NBC. In the previous NBA deals, NBC ran many regular-season games, including multiple broadcasts of double- and triple-headers. For instance, during the 2001-02 season, NBC aired 31 games. This past season, ABC ran 14 games and for the 2003-04 season ABC will air 18.
Mr. Erhardt said ESPN is doing somewhat better vs. last year because the NBA was sold as part of the upfront-an upfront that witnessed booming price increases as part of an overall $9.3 billion in sales. Last year, Mr. Erhardt said, ESPN was sold separately to the upfront to determine a purer price value.
Last year, regular-season basketball was sold to advertisers for about $20,000 per 30-second commercial unit on either TNT or ESPN. ABC was inking deals for around $40,000 a unit. Spots during early-round playoff games went for $70,000 to $80,000 on cable and up to $200,000 on ABC.
For the 2003 NBA finals the price of a 30-second commercial averaged $446,566, according to Nielsen Monitor Plus. A spot during the 2002 finals on NBC was priced at an average of $431,100. The NBA’s crucial CPM cost for the finals also rose in 2003 over 2002-by 25 percent to $103.61 for the key demographic of men 18 to 49, according to Nielsen Monitor Plus.
TNT said it has added a number of new advertisers, including Microsoft and Yahoo!, for the upcoming season. Returning sponsors include Gatorade as the TNT pregame sponsor; Verizon as halftime sponsor; and Southwest Airlines, the game break sponsor. Game breaks are short informational vignettes during the game. Hyundai returns as a presenting sponsor of the show, “Inside the NBA.”
While TNT’s household numbers haven’t significantly improved, its playoffs have seen an increase from 17 percent to 26 percent in all its key male demographics-18 to 34, 18 to 24 and 18 to 49.
For its part, ESPN/ABC noted while ratings didn’t improve over NBC’s games the year before, all games improved the ratings of the time periods over a year before.