TV in ‘Uncharted Territory’ as Networks Navigate Ad Sales Fallout of Sports Cancellations

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In the space of one day, every major sports league in the U.S. suspended operations for at least the next several weeks in response to the growing spread of the novel coronavirus.

The rapid cancellations, which began Wednesday night and stretched into Thursday, have left networks and marketers reeling, scrambling to determine what happens to their sports-related TV ad buys. “We’re in uncharted territory,” one TV ad sales exec told Adweek.

The National Basketball Association suspended play until further notice Wednesday, and the other leagues followed suit on Thursday: The National Hockey League and Major League Soccer also paused their seasons indefinitely, while Major League Baseball canceled spring training games and said it would delay the start of the season by at least two weeks. The NCAA also canceled its spring championships, most notably the men’s and women’s basketball March Madness tournaments. On Friday morning, The Masters, golf’s first major tournament of the year, was postponed.

Networks are working to pull together alternative programming to fill the unexpected gaps in their schedules. This morning, CBS said it will fill its March Madness primetime programming gaps with repeats of its primetime shows through the end of the month.

Meanwhile, TV ad sales groups and marketers find themselves in similar positions: huddling with their respective teams to evaluate their options and determine next steps as they navigate the fallout of these sudden sports cancellations, which potentially affect billions in TV ad revenue.

March Madness generated $910 million in national ad revenue last year for CBS and WarnerMedia, according to Kantar.

NBA games generated $248.9 million in ad revenue during the first two months of the season, from Oct. 22 to Dec. 31. Last year, the NBA brought in an estimated $598.7 million in ad revenue during the regular season, while the playoffs generated $972.5 million, per Kantar.

Independent research firm MoffettNathanson estimates that if the rest of the 2019-2020 basketball season is canceled, Disney’s ESPN could lose $481 million in NBA ad revenue, while WarnerMedia could lose $210 million.

Networks and their clients are in the process of determining what will become of the ad buys that had been locked in for these various sporting events. Some could be shifted into other programming, either replacement shows or elsewhere on the respective network, though as MoffettNathanson’s Michael Nathanson said in a research note, “Due to the importance of high-profile sports to these ad buyers, we have a hard time seeing why and where these dollars would be redeployed.”

Other sports ad buys could shift to later games if and when those leagues resume activity, as many hope to do in the coming weeks. In other cases, marketers could decide to recoup their ad spend.

Because everyone is still figuring out next steps, those conversations between networks and marketers have not yet begun in earnest, but are expected to start today.

For many marketers, the situation isn’t as easy as simply deciding where to reallocate their ad spend. Brands with campaigns specifically tied to March Madness and other canceled sporting events, or products that might be delayed due to the coronavirus (including movies like Mulan and No Time to Die, which have been postponed), will have to regroup.

“They also are doing triage, and they don’t know what they’re going to do,” said one TV ad sales executive.

Some campaigns will need to be “completely altered,” such as Hershey’s recent decision to pull an ad featuring people handing out candy bars to strangers, often accompanied by hugs and handshakes, said Brian Wieser, global president of business intelligence at GroupM. “There’s some marketers whose campaigns are evergreen, but I think that many marketers are going through this process at this moment to figure out what their messaging should look like and their business focus should be.”

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