Networks May Lose for Years Without NFL, NBA: Chart of the Day
CBS Corp. (CBS), Walt Disney Co. and Time Warner Inc. (TWX) may see years of ratings declines for professional sports programming if the National Football League or National Basketball Association season is canceled, analysts say.
The CHART OF THE DAY shows television ratings for Major League Baseball’s World Series have never recovered since the baseball strike in 1994. Ratings for the NFL’s Super Bowl have increased over the same period, culminating in record highs in 2010 and again in 2011, while NBA Finals viewership has climbed since 2007. A delayed or canceled season could destroy the momentum for both leagues, said David Bank, an analyst at RBC Capital Markets in New York.
“Everyone’s playing with fire with these lockouts,” said Bank. “It’s a risk for all of the leagues. They run the risk of the viewers not coming back, and I don’t think they want to take that risk.”
The potential harm of missed games is greater to the networks -- Disney’s ABC, CBS, Comcast Corp.’s NBC and News Corp.’s Fox -- than Disney’s ESPN, said Paul Sweeney, an analyst at Bloomberg Industries. That’s because networks use highly rated sporting events as promotional tools for new programming, particularly early NFL games that air during the launch of the fall season. The result could be lower ratings for all shows, which affects advertising revenue.
ESPN doesn’t have the scripted dramas and comedies that networks rely on for advertising dollars, and the cable station can replace lost games with other sports, including college athletics, Sweeney said. ESPN collects its distribution fee, which analysts estimate is about $4.50 per cable subscriber, even without the pro games.
The NFL and NBA owners locked out their league’s players, threatening both seasons. Though NFL owners voted 31-0 for a new 10-year labor agreement yesterday, players declined to vote on whether to accept the deal and it was unclear when the players would meet again. The NBA’s lockout began June 30.
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