U.S. World Cup TV Ratings: Ad Revenue Misses Out

Whatever the ratings for the final match in Rio de Janeiro on July 13, the 2014 FIFA World Cup in Brazil has been a record-setting success on television in the U.S. The match between the U.S. and Portugal on ESPN on June 22 drew a record audience for soccer, with an average of 18.2 million viewers, according to Nielsen (NLSN). On Univision, Mexico’s match with the Netherlands on June 29 set the viewership record for any U.S. Spanish-language telecast at 10.4 million viewers. Almost 25 million people watched the U.S. play Portugal on the two networks, about 10 million more than the average for the National Basketball Association finals and Major League Baseball’s World Series.

For Walt Disney’s (DIS) ABC and ESPN, which hold rights to English-language telecasts in the U.S., total viewership through the first 60 matches is up 42 percent over the 2010 World Cup. For Univision, the Spanish-language rights holder, viewership is up 38 percent over 2010. These figures don’t include record traffic on the two networks’ streaming services or the crowds watching at bars.

Celebrations at ESPN and Univision, however, will be muted and short-lived. The immediate financial benefit to the networks is minimal, since most of the advertising inventory for the tournament was sold well ahead of time—and likely at rates pegged to lower viewership. “The bulk of the advertising, the 70 or 80 percent that was presold, that was not presold on these numbers,” says Marc Ganis, president of the Chicago consulting firm SportsCorp.

Moreover, both networks were outbid for the next two World Cups, in Russia in 2018 and Qatar in 2022. Fox (FOX) owns the English-language rights to the pair, and Telemundo, a property of Comcast (CMCSA)/NBCUniversal, has the Spanish-language rights for the U.S. “It’s bittersweet,” Scott Guglielmino, ESPN’s head of soccer programming, says of the network’s lame-duck status. “We are certainly living in the moment.” Both Guglielmino and Juan Carlos Rodriguez, president of Univision Deportes, say the success of this year’s World Cup is partly a testament to their coverage. “Univision Deportes continues to be the No. 1 destination for soccer fans 12 months out of the year,” writes Rodriguez in an e-mail. Still, according to Brad Adgate, director of research at Horizon Media, “there has got to be some second-guessing” at the two networks over the failure to bid high enough for the next two World Cups.

Although FIFA doesn’t disclose financial details of its agreements, multiple news outlets reported that ESPN paid $100 million for the rights to the 2010 and 2014 World Cups, while Univision paid $325 million for the same pair. For 2018 and 2022, fees more than doubled, with Fox paying roughly $450 million and Telemundo $600 million. The steep price increases are in keeping with a boom in the cost of sports programming, which has maintained its live audience better than most television against digital recorders.

For ESPN and Univision, this year’s ratings will still pay off in goodwill with advertisers and potential leverage in negotiations with carriers over the per-subscriber fees they pay for the channels. For Fox and Telemundo, both of which declined comment, this year’s numbers raise the floor, but not necessarily the ceiling, for 2018 and 2022.Brazil’s peak audiences are probably not sustainable. The record-setting U.S. match with Portugal aired at 6 p.m. on a Sunday on the East Coast. The team’s elimination match with Belgium at 4 p.m. the following Tuesday attracted a slightly smaller audience of 16.5 million. Both matches fell within an ideal window for many, toward the end of the workday but before competition from prime-time programming. “The time zone this year was perfect,” says SportsCorp’s Ganis. And the two main attractions for the U.S. audience—the U.S. and Mexican teams—made it to the round of 16.

Time zones in Russia and Qatar are far less favorable. Russia ranges from 7 to 16 hours ahead of New York. And Qatar, during the summer, is 7 hours ahead. A 6 p.m. match in Moscow would be on at 10 a.m. in New York. During the 2006 and 2010 World Cups, matches starting between 9 a.m. and 11 a.m. on ABC and ESPN averaged 2.1 million viewers. And there’s no guarantee that the U.S. and Mexican teams will qualify for future World Cups. “The TV ratings, I think, will be going down,” says Ganis. “But the alternative means of viewing—if not the whole games, at least snippets of them, and if not live, on a form of a delay—will go up.” Fox can use that marquee programming to try to boost the fees it charges carriers for the two 24-hour sports channels it launched in 2013.

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Source: businessweek.com

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