BUSINESS Bloomberg Businessweek August 3, 202015STADIUM:
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THE BOTTOM LINE Last season, more than half of all college
football viewers tuned into an ESPN outlet. A reduced season could
make it tough to get the audience size promised to advertisers.college athletic schedules is spread out among doz-
ens of schools, presidents, and conferences. “It’s
harder to get consensus,” says Patrick Crakes, a for-
mer Fox Sports executive who’s now a consultant.
College football accounted for about $793 mil-
lion in advertising at ESPN, ABC, and their related
networks, estimates Standard Media Index, which
tracks advertising spending. That’s almost four
times as much as their closest rival, Fox.
Big sponsors including AT&T Inc., Dr Pepper,
and State Farm depend on college football for bil-
lions of ad impressions a year, says ISpot.tv. College
GameDay, a program in which ESPN commenta-
tors travel from school to school each week, is a
Saturday morning staple for many Americans. The
network says it still plans to take that show on the
road, though longtime host Lee Corso, who’s 84,
may appear from his house. Home Depot Inc., the
main sponsor, says it will continue to be involved
and looks at this as an “opportunity to engage with
college football fans in new virtual ways.”
ESPN and other networks are doing their best to
persuade advertisers to stick around, moving spots
from one sport or channel to another, says Sam
Bloom, chief executive officer of Camelot Strategic
Marketing & Media, which helps companies includ-
ing TurboTax, Whole Foods Market, and 7-Eleven
make ad decisions. “For some of our advertisers,
it’s forcing them to rethink,” he says.
Chris Wujcik, vice president for client consulting
and services at GMR Marketing in New Berlin, Wis.,
says sponsors are mostly in a wait-and-see position.
If entire seasons are canceled, it will be difficult
to find programs that reach audiences of a similar
size. If top-tier games are replaced by less-followed
matchups, the networks will probably offer their
sponsors other perks such as digital ads or even
signage in stadiums to compensate. “Everyone’s
going to be really creative with what they offer,”
says Wujcik, whose firm’s clients include Hershey
Co. and Nissan Motor Co.
The loss of postseason games, such as the Rose
Bowl and Sugar Bowl, which accounted for about
a combined $345 million in ad revenue last year for
ESPN and ABC, would be painful. ESPN was sched-
uled to air 39 bowl matches. One, the Celebration
Bowl, has already been canceled.
The National Collegiate Athletic Association
said it would resume discussions in August about
whether some of its championships will still be
played. “We all remain deeply concerned about the
infection trend lines we see,” NCAA President Mark
Emmert said in a statement on July 24.
It’s not only college play that’s been disrupted.
After losing two of the league’s 26 teams whenplayers tested positive, Major League Soccer has
continued to play in Orlando with no new cases
since July 13. Major League Baseball, which is play-
ing its games on the road, canceled several at the
start of its season after players from the Miami
Marlins tested positive.
ESPN’s cable networks could see ad revenue fall
this year by 12%, or $320 million, says Scott Robson,
an analyst for S&P Global Market Intelligence. Much
of that could come from college sports. “We’re
going to see similar declines at the rest of the pro-
grammers in this quarter and the current quarter,”
he says. “It’s a big deal.”
With a loss of revenue such as that, ESPN, which
coped this year in part by furloughing workers and
asking on-air talent to take 15% pay cuts, may resort
to layoffs, Crakes says. Throughout the pandemic,
cable TV companies have continued to collect
monthly bills from customers and remit program-
ming fees to the sports networks, even though live
sports have been off the air. If ESPN and its sister
channels can’t deliver the contracted hours of live
sports, cable operators could ask for some of that
money back. Worse, cable customers, fed up with
high monthly fees, may downsize to lower-priced
TV packages or cancel service entirely. Those
pay-TV subscriber fees are a big number for Disney:
almost $10 billion from ESPN-related channels
alone last year, or three times what its networks
bring in from advertising. A recent UBS Securities
survey found 14% of cable subscribers would likely
cancel the service if college football didn’t happen.
“This could accelerate cord-cutting,” says Doug
Perlman, who consults with leagues over media
deals at his company, Sports Media Advisors LLC.
“There will be more people who say, ‘There’s no
college football. It’s time for me to move on.’ ”
—Christopher Palmeri, with Lucas Shaw○ EmmertWhere Sports Advertisers Play
Ad revenue during the 2019-20 college football seasonRegular
seasonPostseasonESPN$196m$307mDATA: STANDARD MEDIA INDEXABC FOX CBS NBC