Monday, January 9, 2017

NFL an MVP for TV Networks

Sports business practitioners have closely watched TV ratings for the National Football League this season. Is the teflon brand of the sports industry vulnerable? Is fan interest waning? Would fan backlash to player national anthem protests and other negative PR show up in fewer TV viewers? Are there just too many entertainment options that pull away people from consuming NFL games? TV ratings for the 2016 NFL regular season reveal two things: 1) fewer people are watching NFL games and 2) the NFL is still a very valuable property for TV networks.

A Ratings Slide

ESPN sports business reporter Darren Rovell recently reported NFL TV ratings for the 2016 regular season were down eight percent from 2015. The comparison excluded Thursday night games as Twitter live streaming debuted this season as another option to watch and gave fans a non-TV option to consume. Ratings were down for all NFL TV programs and all networks. ESPN Monday Night Football took the biggest ratings hit, down 12% from 2015. NBC Sunday Night Football also suffered a double-digit ratings decline with a 10% decrease in ratings. Ratings for CBS and Fox Sunday games were down seven percent and six percent, respectively. 

The presidential election season is cited as one reason for the dip in NFL TV audiences. In fact, ratings were down more in the first half of the NFL season, which coincided with the run up to the election. However, the bottom line is NFL TV viewership was down this season. Should NFL executives and the TV networks be worried? In short, no.


If the television industry handed out MVP awards, the NFL would need to bring a U-Haul trailer to the awards ceremony to pack all of its hardware. Despite a decline in audience viewership, it is undeniable that the NFL remains popular TV viewing. The average audience for an NFL game was 16.5 million in 2016. The NFL audience size makes it one of the strongest TV properties around. A recent Ad Age article reporting the top 50 TV program audiences for 2016 revealed that 11 of the top 20 programs were NFL games. All but one of the games were in the postseason, but the point is the NFL remains highly relevant as a TV product. The NFL is an MVP (Most Valuable Program) to its broadcast partners.

It's Not Just the NFL

Ratings concerns are not limited to the NFL. Network TV has dealt with dwindling audiences for years. First, cable networks fragmented audiences. Then, the internet and social media gave us more options for how we entertain ourselves. How have TV audiences changed over time? Take a look at TV ratings for top network shows at different points in time:

Nielsen Rating*
The Cosby Show
American Idol
* One ratings point = 1% of U.S. TV households

Given that a single ratings point equals about 1.2 million viewers, NFL programs draw large audiences and in turn, the interest of advertisers. The TV audience is forever fragmented; we will never see a TV program with a 67.3 rating like that of I Love Lucy in 1954 (it helped to have three TV viewing options- no issue with media fragmentation in those days). Programs like NFL games offer the closest thing to the "good old days" of large audiences drawn to a single program.

NFL to Determine Future Success

The consistent performance of the NFL as a TV property shows little signs of letting up despite a ratings dip in 2016. There is one huge caveat, though. The NFL must maintain interest in its product on the field and manage its image off the field. Arrogance or indifference to concerns about safety and player conduct could derail the NFL train. Otherwise, the NFL will continue to be an MVP for TV networks.

Check out TV ratings for NFL regular season games in 2016 at Sports Media Watch.

Monday, January 2, 2017

Innovation Is Name of the Game in 2017

It is the time of year for predictions about what will happen in the coming year. You name the topic, and you can likely find predictions about expected trends or developments. Predictions are informative for giving a heads up on what areas to pay attention to in the coming year. And, predictions can be provocative when they push boundaries of current practice or performance. 

So what are the predictions for sports business in the coming year? An online search for articles on 2017 predictions for sports business returned some likely topics:
  • E-sports
  • Virtual reality
  • Big data
  • Shifting media consumption
  • Fan engagement

This list yields no surprises as they are front burner priorities for many sports properties and companies. The pressing question is whether these trends become opportunities or threats for an organization. The difference maker will be innovation.

A Simple Definition

Innovation is crucial to an organization’s growth. And, it is said if you are not growing, you are dying as a business. Why is innovation central to an organization’s growth? It is central because of what innovation represents. Simply put, innovation is “creating new value.” When you create new value, you maintain or enhance relevance of your products. We tend to think of innovation as new value that benefits users- think cashless concessions or smartwatches that capture personal fitness data. Innovation can be internally driven, too. For example, gleaning deeper insights from customer data to make staffing decisions that enable better customer service to be delivered during peak periods. 

Squandering an Affinity Advantage?

In Chapter 1 of Sports Marketing (by Fetchko, Roy, and Clow- Routledge, 2016), one trait that distinguishes sports from other industries is a phenomenon referred to as an affinity advantage. What is an affinity advantage? It is a positive affective (emotional) disposition people have toward an object like a brand. Sports brands enjoy an affinity advantage over non-sports brands in that people are inclined to show their affinity for a brand. A quick look around the coffee shop where I sit writing this article I saw people wearing apparel with logos of Nike, University of Alabama, and Dallas Cowboys. I guess the Cuisinart, Kroger, and Purina fans were at home… although I have never seen those “fans” anywhere. The point is many people are willing to make an emotional investment in sports brands unlike any other brand relationship they have.

That said, an affinity advantage is more like a head start than outright competitive advantage. Brands possessing an affinity advantage should cherish and safeguard it, not take it for granted and assume it will always be present… because it will not. It will be interesting to see how ESPN and other sports media brands fare in 2017. The days of TV-centric sports consumption are over, not to dismiss TV as an important communication medium. Realities of media consumption include reliance on multiple screens and more people not glued to the big screen at all. Innovation is the tonic media brands will have to rely on to leverage their affinity advantage and deal with shifts in consumption. Otherwise, the head start gained by the affinity advantage will be negated. ESPN and other sports media brands will be challenged to “create new value” to adapt to consumers’ shifting interests and behaviors. 

Happy New Year- Be innovative in 2017!