NFL ad revenue is rising amid a ratings decline

BI Intelligence

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NFL ad revenue increased 2% YoY across all networks from September to November of this season, despite declining viewership, according toAdweek. Average game viewership fell to 15 millionin early December, down from 16.5 million in the same month last year.

The trend is a continuation from earlier in the NFL season, when revenue increased 2% YoY in September, despite ratings falling 5%, according to Adweek.

NFL ad revenue continues to increase amid ratings declines because it’s still one of the biggest ratings drivers on TV. More broadly speaking, live sports are one of the last bastions of TV viewership. Cord-cutting has hit record numbers in 2017, but live sports remain a key reason consumers tune into pay-TV — 82% of traditional pay-TV subscribers would trim their subscription if they no longer needed it to view live sporting events, according to PwC. Moreover, live sports accounted for 44 of TV’s top 50 most-watched broadcasts in 2016, according to AdAge.

And this is why declining NFL viewership isn’t deterring companies from investing in acquiring NFL streaming rights. Verizon just committed to pay over $2 billion over five years for the rights to stream NFL games on mobile devices for free. Amazon paid $50 million for the rights to stream 10 Thursday Night Football games this season. In all, growing demand for NFL rights is contributing to the increasing value of sports media rights — fees paid to air sporting events on TV, the internet, and mobile devices. In North America, sports media rights are projected to reach $23 billion in 2021, up from $19 billion in 2017, according to PwC.

Robert Elder, research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on the digital disruption of live sports that:

• Assesses the evolving live sports landscape.
• Examines how ESPN’s business model is threatened by the decline of live sports.
• Profiles the promising new players in the space.
• Looks at what’s next for legacy broadcasters.

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