Leaked document: Top ad agency predicts that cancelled NBA and NCAA events will cost TV networks up to 25% drops in viewership
- An internal document from Interpublic Group's ad-buying firm Magna Global breaks down how much TV viewership on major broadcasters like WarnerMedia's TBS, TBS; CBS; and ESPN will drop with the cancellation of March Madness and NBA games.
- The viewership cuts for sports networks range from 9% to 25% while streaming TV viewership overall is expected to grow 15%, according to the agency's own figures.
- The agency said it was working with media companies for advertisers that want to shift money from live sports games to other platforms including Roku, Hulu, and Amazon.
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The number of major cancelled sporting events continues to grow, causing a headache for TV networks who are betting big on live sports for ad revenue.
According to an internal document from Magna Global, a top ad-buying agency owned by Interpublic Group, the networks that were planned to air live sports could expect to take a drastic viewership hit.
The March 12 document advises clients on the impact that coronavirus is having on TV viewership and specifically looks at two events that were cancelled this week: The National Collegiate Athletic Association's March Madness tournament and National Basketball Association games.
Magna Global declined to comment for this story.
The National Hockey League and Major League Baseball have also either paused or cancelled games, though the agency did not analyze the impact from either of those events.
Also this week, the major networks including NBCUniversal, WarnerMedia, CBS, and Fox cancelled their annual live upfront presentations that are used to lock in big advertising commitments from marketers. The networks said that they would instead host virtual presentations.
Networks are bracing for big drops in viewership
WarnerMedia-owned TBS and truTV and CBS planned to air NCAA games while ESPN, ABC and WarnerMedia's TNT broadcast NBA games. For NBA games, Magna Global expects TNT to take the biggest household total day ratings hit, 25%, while ESPN's viewership will fall 14%. During the NCAA tournament, the agency predicts that TBS' household total day ratings will drop 20% while truTV will drop 18% and CBS viewership will decline 9%.
The viewership figures drop more significantly when looking just at audiences aged 18 to 34 years old, a critical audience for sports marketers.
Here's a chart from the document that shows Magna Global's predictions on viewership declines from both the NCAA tournament and NBA games:
Magna Global is working to find a backup plan for TV advertisers
While specific networks will be negatively impacted by cancelled sports events, Magna Global expects the overall impact on viewing to be small, the firm wrote in the document. Networks that were supposed to air sports content will fill the time with other types of entertainment content.
"The overall impact of the lack of sports will likely be 2-4%, depending on the demo," wrote the firm. "This is in addition to typical linear declines that will vary between 12-15% on a total day basis."
Overall, the firm said there could be an uptick in viewership for streaming TV events, particularly news content, as more people stay home. In the document, Magna Global said that viewing growth could be as high as 15% in the coming weeks.
Magna Global wrote in its report that it is working with media companies on ad packages for clients that want to move linear sports TV spend to digital video:
- Roku: Magna Global said Roku has agreed to extend upfront rates for advertisers impacted by live sports.
- Hulu and Amazon: Both companies are "open for business against rate card" prices, wrote the firm.
- YouTube's Google Preferred ad inventory, Facebook Watch and Condé Nast: Digital video rate cards are available for clients.
"Although we understand that live sports is a difficult thing to replace, there are options available that can deliver both reach and impressions across digital video properties," Magna Global wrote in the document.