Jimmy Fallon greeted the crowd at what he called “the NBA upfront” before correcting himself at the NBCUniversal upfront presentation on May 12. He had it right the first time.
Sports has played a primary role in TV networks’ and more recently streaming services’ upfront shows for years. But this year it was the show and is expected by agency executives to dictate the upfront marketplace to a greater degree than previously.
While many ad buyers expect the amount of money committed in this year’s upfront overall across traditional TV and streaming to be flat if not down compared to last year, the sports side of the upfront is another story.
“Even budgets are down for some clients, they will probably be shifting a lot [of upfront ad dollars] from cable entertainment into live sports and streaming,” said one agency executive during Upfront Week in New York City.
“We’re estimating the sports market to be between 8% and 12% up. That’s just based on [advertiser] demand, not audience increase,” said a second agency executive.
Unsurprisingly, upfront sellers are very much driving attention to their sports inventory as upfront negotiations formally kick off.
“We’re obviously gearing up for a pretty incredible year when it comes to sports,” said Gina Reduto, evp of strategy for advertising and partnerships at NBCUniversal, in an interview. The parent company of NBC and Peacock is pitching this fall’s NBA and NFL seasons as well as next year’s Super Bowl and Winter Olympics among its sports properties. “If you look at the sports portfolio next year and you look at that through the umbrella of live, we’ll essentially have 40% of all big event viewership,” she said.
“Amazon is bringing to market a multisport upfront this year. Prime Video will launch NBA, both in the U.S. and in global locales, as well as NASCAR Cup Series coverage, which join the NFL, WNBA and National Women’s Soccer League as tentpole live sporting events,” said Amazon’s vp of global advertising sales Alan Moss in an interview.
The story is similar at YouTube. The Google-owned video platform announced in its upfront presentation an exclusive global free broadcast of an NFL game during the upcoming season’s kickoff week, in addition to its NFL Sunday Ticket package and library of NFL clips. “We are getting more and more sports content is maybe the most resonant thing that we talk to advertisers about. We’ve seen a 30% increase in sports content year on year,” said Sean Downey, president of Americas and global partners at Google, in an interview.
Traditionally, sports had operated as more or less a separate marketplace within the upfront. But after Disney reorganized its ad sales division in 2018, it began packaging its sports inventory with its other inventory. “Disney was the first to tie sports to other inventory,” said the first agency executive.
While Amazon has a separate dedicated sports sales team, it does sell sports alongside its non-sports inventory and allows advertisers to combine sports and non-sports ad spending to unlock discounts, according to agency executives.
“Advertisers can activate campaigns across live sports, original series, premium films and also have trillions of signals and insights to relevantly meet those audiences where they’re at, whether it’s in live sports, whether it’s across different entertainment offerings that we provide. So we’re very much going to market with that holistic capability,” said Moss.
Upfront sellers are incentivized in some respects to tether their non-sports inventory to sports. Streaming ad prices dropped coming out of last year’s upfront, and ad buyers are eyeing reductions this time around too, albeit to a lesser degree. But sports could be what props up streaming CPMs.
Base streaming ad prices for the top streaming services — Disney+, Hulu, Netflix, Peacock, etc. — are currently in the mid-to-low $20s, according to agency executives. But the base CPMs for streaming sports inventory start around $30 and can go up to $45, they said.
“The sports part of this marketplace is so massive now. You probably will see the networks hold firm or increase in the CPMs for sports,” said a third agency executive.
Sports may not only affect how ads are priced in this year’s upfront but also how quickly the market moves. While agency executives expect this year to be a relatively slow negotiating window, they are leaving open the possibility for sports to speed up deal talks.
“You have half the folks saying, ‘Oh, this is going to take all summer.’ The other half are like, ‘Well, the sports marketplace might pick up [this] week,’” said the third agency executive.
“We think it’s going to be slow, but sports — consumers are watching a lot of sports, so you kinda want to take it right now. You want to take the pricing and lean into it, but if everyone is thinking that way, then you don’t have that pricing advantage. So I think it’s going to be slow-pacing, but I feel like sports is going to go really quickly,” said the second agency executive.
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