With the 2017 NFL season now down in the record books as having lost another ten percent in TV ratings, the league has found a $30 million dip in ad revenue, a report says.
As the final numbers for advertisement sales for the season were tallied, the league discovered that its revenue fell 1.2 percent because “makegoods” rose to beat rate increases. A makegood is a partial repayment of money charged to advertisers because the viewership did not reach the expected numbers to justify the top rate.
Revenue was reported at “$2.42 billion, down from $2.45 billion in 2016,” according to media industry trade magazine Ad Week. That is a $30 million loss according to Awful Announcing.
Even though advertisement rates went up on average across the networks, the hike in fees did not beat the paybacks that the league had to repay to its customers.
“While the average cost of a 30-second spot grew 1.2 percent this season, from $499,000 to $505,000 — and commercial loads were flat — it ultimately couldn’t compensate for a jump in makegoods to make up for this season’s 10 percent ratings drop in total viewers,” the magazine reported. “Makegoods accounted for 23 percent of units this season, up from 21 percent in the 2016 season.”
The 2017 season is a full reversal of ad revenue that started falling last season. Ad growth saw a small 3 percent rise in 2016 while the 2015 season’s revenue grew by 9.6 percent over that of 2014.
The makegoods grew particularly worrisome at the tail of the season, the magazine reported.
Some of the biggest advertisers with the NFL were tech companies, various alcohol distillers, and fast food restaurants. Verizon, for instance, spent $2 billion on advertising during the 2017 season.
With only three weeks until game day, NBC still has close to ten Super Bowl LII ad slots left unsold. The network is expecting to earn around $500 million in ad revenue for the big game.
Follow Warner Todd Huston on Twitter @warnerthuston.
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