American Pharoah Is Winning Ticket for Belmont TV Advertisers

American Pharoah needs one more win to make horse racing history. For advertisers who bought into the Belmont Stakes in February, the colt already delivered.

NBC sold about 90 percent of its horse-racing advertising slots this year well before casual sports fans had ever heard of American Pharoah. Now the horse is running for the first Triple Crown in 37 years and advertisers, such as Ram Trucks and Longines, are poised to benefit from the ratings bump produced by the hype.

“It’s one of those rare circumstances in television that you know you’re going to over-deliver to the advertiser,” Jon Miller, president of programming for NBC Sports, said in a telephone interview.

In addition to event-specific slots, networks like NBC also sell ads in multisport packages, meaning companies with commercials in Saturday’s race may have a bundle that includes spots on the telecast of the Stanley Cup Final, PGA Tour golf tournaments, other horse races or National Football League games.

While ratings for any sporting event can depend on storylines, it’s rare to see a percentage swing as heavy as that seen in the Belmont Stakes.

“There has to be a storyline that gets casual, otherwise uninterested fans to watch the event,” Jon Swallen, chief research officer for Kantar Media, said in a telephone interview. “There’s not much horse racing on TV, so in a way, horse racing is all about incremental audience.”

Five Attempts

Since 2001, five horses have run the race in pursuit of the Triple Crown. Those five races averaged a 10.4 rating, roughly 2.5 times the ratings for those where history wasn’t on the line (4.2), according to data provided by Horizon Media Inc. The 2.5 multiplier holds true for total audience as well -- 11.5 million vs. 4.7 million.

“It’s either hit or miss, there’s no in between,” said Brad Adgate, senior vice president of research at Horizon. “If two different horses win the Kentucky Derby and the Preakness, the Belmont is just a run-of-the-mill horse race.”

Horse racing has demographics that differ from many other sporting events, which makes it uniquely appealing to some advertisers. The TV audience is 50 percent female, and skews older and wealthier than those for sports such as soccer or basketball, Adgate said.

Ram’s Bonus

Ram Trucks, an FCA US LLC brand, purchased its Belmont spaces as part of a multiyear deal with NBC for all three Triple Crown races. The company may debut two new ads Saturday to take advantage of the higher ratings.

“For Ram, it’s icing on the cake knowing a run for the Triple Crown means a much bigger viewing audience than normal,” Susan Thomson, head of media for FCA US, formerly Chrysler Group LLC, said in an e-mail.

NBC will begin its Saturday coverage 30 minutes earlier, which allows the network to sell more commercials, albeit with a smaller expected audience a few hours before the race. Miller said after the Preakness that the network also had a number of other unsold units, which it would sell for a “significantly greater” price correlated to the expected ratings jump.

“I wish I could tell you that we had the foresight to hold back all of our inventory in the Belmont, but unfortunately we don’t,” he said.

Those holdover units will help NBC reap some financial benefit from the Triple Crown hype. The average 30-second spot sold for last year’s Belmont was roughly $295,000 when the Triple Crown was on the line, up from about $205,000 the previous year when it wasn’t, according to Kantar.

Downside Protection

And while NBC probably could make more money if it held back more inventory or included escalator clauses for the Belmont portions of its packages, there’s potential benefit to the system as it is.

Bundles typically offer downside protection, meaning the network guarantees a certain number of viewers across the entire package of ads. If the Belmont exceeds the ratings expected in February, that provides cushion for NBC should other events underperform.

Miller said that if NBC priced its Belmont inventory at Triple Crown levels, it could “spend the next two years making it good.”

“You don’t want to be in that situation either,” he said.

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