Business

NFL payoff season

While network and ad execs will kick off their annual “upfront” negotiations over commercial time this week, the action is already heating up in one arena: football.

After striking rich deals to renew their rights to televise NFL games, the football networks — CBS, ESPN, Fox and NBC — are looking to hike prices. And with live entertainment ratings down across the board, marketers may have little choice but to turn to sports and pay top dollar.

Already CBS is getting Madison Avenue to pony up $4 million for a single 30-second spot in the Super Bowl, up from the $3.5 million NBC commanded for this year’s game.

“CBS is active in the Super Bowl market and getting some deals written,” said one source.

NBC is asking $1 million for its new property — a Thanksgiving Day game that will prove popular with advertisers eager to target Black Friday shoppers.

Regular season NFL spots sell for around $350,000 for 30 seconds in prime time.

Advertisers spend an estimated $3 billion on televised football games, according to Kantar Media.

The networks are aiming for football price increases — measured in CPMs, or the cost to reach a thousand viewers — in the high-single digits. By comparison, prices in the market for entertainment programming are expected to rise in the mid-single digit range.

“NFL CPM [increases] are going to be in the 5 to 10 percent range,” said Gary Carr, executive director of national broadcast at Manhattan media-buying shop TargetCast. “I think people who want NFL — the cars, the beers, the telecoms — need it.”

In December, NBC, Fox and CBS agreed to pay around $3 billion to continue with the NFL — 60 percent more than their previous contracts that run through 2013.

Sellers argue that football is hard to beat with its huge ratings and DVR-proof programming.

On the flip side, ad buyers preparing to haggle over football time say there are several reasons to cap increases. For one, the sports market will be flooded with additional football opportunities. In addition to NBC’s debut Thanksgiving game, the NFL’s own network boasts five new games in the fourth quarter.

“It is not my problem and not my marketer’s problem and not commensurate with how our budgets go up,” said one ad buyer of the networks’ efforts to pass along the price of NFL games.