Cancelling 'Roseanne' may have cost ABC $100 million, but saved parent company Disney a whole lot more
- ABC's move to cancel "Roseanne" may have cost it tens of millions in ad revenue in the short term.
- But it's also possible that advertisers would have fled the show, causing it to actually lose money.
- Ditching the show could hurt the network with Trump voters, but over time it may have saved Disney far more than a few dollars.
It's hard to measure what cancelling "Roseanne" so abruptly following the star's racist tweets may ultimately cost ABC. Industry estimates range: The show could have generated a few million dollars to anywhere between $50 million to $100 million.
It's even harder to measure what axing the revived sitcom might cost ABC with "Roseanne" fans and/or Trump voters in the near term. Or what staying being in business with such a divisive figure may have cost parent company and ultimate-family-brand Disney long term.
But it's fascinating to unpack.
"Roseanne" was getting solid ad rates
ABC hasn't published just how many ads it sold in "Roseanne" this past year or what it had locked up for next year. But several industry researchers have solid estimates.
- According to Standard Media Index, a firm which tracks ad pricing, "Roseanne" was the fourth most expensive primetime show on ABC in April. Advertisers paid $167,159 for a 30-second spot that month, versus $154,708 for ABC's "Modern Family."
By that count, SMI says that the first five episodes of the eight ABC aired pulled in $8.2 million for ABC.
- However, the research firm Kantar Media estimated that ABC reeled in $45 million from the show this season, and that it could pull in as much as $60 million next season, given that 13 episodes had been ordered (up from 8 this year) and that ABC was sure to jack up prices.
One ad buyer estimated that each episode of "Roseanne" carried 14 different 30-second ad slots. If ABC got $300,000 per ad, 14 ads times 13 episodes nets out to over $50 million, using back of the envelope math.
Of course, ABC will stand to make money from whatever show replaces Roseanne on the schedule. That show will likely get lower ratings and lower rates. If that series pulled in less than half of what "Roseanne" would, ABC only loses roughly $30 million in this theoretical scenario.
"Roseanne" could have been used to promote other shows
It's worth noting that a hit show like "Roseanne" isn't just about the money it makes on its own. When a show pulls in 15 or 18 million viewers per airing, a network like ABC can tell those people all about its other shows. It's that kind of promotional power that makes sports and their high rights fees pay off for networks.
Plus, those big ratings could have been used by ABC's sales team as an anchor for larger ad packages. You want to be in "Roseanne"? You need to buy ads in some other lesser shows, the pitch might go.
What about Trump voters? Other comedians?
ABC had been touting "Roseanne" as a way to reconnect with the heartland after the surprising 2016 election. Does dismissing "Roseanne" dismiss these viewers? Could it result in a boycott?
And what about other talent looking to work with ABC and the big broadcast networks? Will they see this as yet another reason to work with Netflix?
But "Roseanne" could have become a liability, and actually could have cost ABC money
This is Pivotal Research analyst Brian Wieser's theory: Maybe ABC had already gotten lots of calls from advertisers looking to pull ads from "Roseanne." That factor, coupled with the likely high cost of making the show, could have left ABC losing money on 'Roseanne."
"There are more obvious commercial consequences to this," he said. "This show is supposed to be about bringing people together. And then it does the opposite. What brand wants to associate with that?"
As another ad buyer framed it, "What happens when you have the highest rated show on TV and can't sell it?"
Then there's the Disney factor
Cancelling "Roseanne" is undoubtedly a short term financial loss for ABC. But Disney's concerns are far more long term.
Several people who spoke to Business Insider pointed out that CEO Bob Iger had tweeted ABC's statement on the cancellation as being telling, showing that he was involved and seemed to care about the messaging.
As one ad buyer put it, how much does a global media giant, particularly one trying to make a massive acquisition (of Fox) want to be associated with racist tweets? This is the company that just brought the world "Black Panther." A company that banks on luring millions of families to its theme parks.
"That's more than a $100 million decision," one buyer said.