Sep 1, 2020 - Economy & Business

A new way to measure sports

Illustration of a television with soccer balls, basketballs, hockey pucks and lacrosse balls jammed inside.
Illustration: Aïda Amer/Axios

As sports begin to trickle back, the way they are measured will start to look a little bit different.

Why it matters: The changes could help boost TV network viewership numbers substantially for sports and other types of programming typically viewed outside of the home — including bars, restaurants and workplaces.

  • Networks can charge more for ads if viewership is higher.

Driving the news: Beginning Tuesday, Nielsen will include out-of-home (OOH) ratings for television with its linear TV ratings for the fall TV season.

  • "It’s a significant day in our little TV biz. Today for the first time TV viewing outside the home will be fully integrated into Nielsen’s national TV ratings," tweeted Michael Mulvihill, FOX Sports EVP / Head of Strategy.
  • "This is a big deal for sports. Basically from the day I started at Fox the two things that were often talked about as potential game-changers for sports TV were legal gambling and out-of-home ratings. Now they’re both here," he continued.

In the sports world, networks like ESPN have already been able to transact separately on OOH ratings via tools Nielsen has provided since 2017. But for big broadcasters airing major sporting events, the changes could be massive.

Catch up quick: The initial plans to include OOH ratings beginning this month were laid out by Nielsen last year. After years of testing and research, the measurement giant said it would be ready to roll out OOH viewership ratings the 2020 fall TV season.

  • But when the pandemic happened, the company looked to delay the rollout, due to the fact that most bars and restaurants were closed, making it harder to properly capture data about OOH viewership.
  • TV networks cried foul, and Nielsen eventually reversed its decision. Many networks, especially broadcasters, had sold TV ads upfront based on the new measurement standards. With the NFL underway, they felt blindsided by the decision, Sports Business Daily reported.

Be smart: In the advertising world, Nielsen's decision placed them squarely between the interests of ad buyers and TV networks.

  • Networks, eager for higher ratings and suffering from major ad-related setbacks during the pandemic, were eager for the changes to be implemented this fall.
  • Ad buyers and agencies, who have become accustomed to only paying for the eyeballs that Nielsen measures on in-home TV's, felt like Nielsen was pandering to the TV networks, per AdExchanger.

The big picture: It's not just a sports problem. In 2015, CNBC said it stopped using Nielsen for its daytime ratings only, citing the fact that it wouldn't include OOH ratings in its traditional TV ratings, but today it still retains Nielsen measurement services.

  • CNBC is viewed by many in offices during the day at work.
  • Sources say today that almost every network, including CNBC, has opted in to Nielsen's syndicated service that includes OOH.

The bottom line: Nielsen's updated TV ratings formula is a boon for networks, who are suffering from major ad-related setbacks during the pandemic. But they'll have to wait until public establishments fully re-open to assess its benefits.

  • Bars being counted would seemingly reward live sports more than anything else, and some pre-pandemic forecasts predicted as much as an 11% boost to sports viewership numbers.
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