How the coronavirus-driven sports outage impacts TV and advertising
Without live sports for the foreseeable future, it's unclear what networks like ESPN and FS1 will broadcast in those time slots or what they'll talk about on their studio shows and radio programs during the day.
Why it matters: With so many Americans nesting at home, linear TV viewership was expected to spike. But without sports, streaming platforms, video games and other mediums will likely be the big winners instead.
The big picture: A prolonged sports outage could lead to an acceleration in cord-cutting, while also wreaking havoc on the advertising industry.
"One of the only reasons to advertise on TV in 2020 is sports. If sports aren't being played, that's going to be a huge issue for the ad market that could literally lead to a tailspin."— Rich Greenfield, media analyst at LightShed Partners
Between the lines: Given the fluidity of the situation, there are many advertising-related questions that have yet to be answered.
- What happens to the ad revenue that has already been booked? Do the networks give that money back?
- If the NBA and NHL playoffs air, it will help networks make up for missing regular-season games, but what if the playoffs don't happen? Then what?
For reference: Last season, regular season broadcasts accounted for 38% of the NBA's total TV ad revenue, while postseason games accounted for 62%. The NHL had similar numbers.
The state of play: ESPN was unable to comment on what their programming will look like without live sports, but here's what was shown on their airwaves yesterday:
- ESPN: SportsCenter all day and night
- ESPNEWS: Video simulcasts of radio shows and taped programming
- ESPN2: Simulcast of ESPN and ESPNEWS
The bottom line, per Greenfield: "Think about the TV ecosystem as a huge Jenga game, which is already under extreme stress. The last piece holding up the whole thing is sports, and in the last 24 hours, you've pulled that piece out for an unknown amount of time."