What The NFL Lockout Could Mean For Advertisers

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Photo: AP

With the NFL and the NFL Players Union now officially in labour dispute, a great deal hangs in the balance for advertisers.  While much has been written regarding the implications for fans, teams, arenas, players, television contracts and even local economies – little has been focused on the enormous impact a work stoppage will have on marketers and brands that rely on the NFL’s proven product and vaunted television ratings to reach mass audiences.

With 10 NFL players filing a class action suit against the owners, the possibility of a protracted work stoppage is now very real. Smart advertisers should have already been discussing or have contingency plans in place.

The two main challenges a lockout would bring for advertisers would be how to replace the bulk of the NFL’s highly rated inventory and in doing so can you still achieve your optimal marketing objectives using a spate of alternative programming in both live sports or in other areas?

The Networks (FOX, CBS, NBC, ESPN and DirecTV) collectively pay a combined $4 billion annually in television rights deals to the NFL with the networks receiving close to $3 billion in advertising revenue on NFL Games – so clearly a lot is at stake for them.

However, the lockout doesn’t just affect NFL programming – a disruption affects all television dayparts and all television advertisers by creating a vacuum of available gross ratings points (GRPs) the metric used for pricing in the marketplace.  The supply and demand effect that would ensue would make every other precious GRP that more expensive for advertisers trying to pull together a media plan in the absence of NFL games.

Given the tone of the two sides the threat of lost games is real and thus advertisers must now consider alternatives – now. Otherwise, there is a real risk of marketers being ‘locked out’ of other live sports programming alternatives if a brand waits too long for the NFL to settle its labour discord.  

As the clock ticks there will be runs on the inventory for NCAA College Football, MLB playoffs and World Series, the NHL and possibly the NBA (if they don’t have a labour stoppage of their own). It will be critical to ensure alternative options and inventory is available if the NFL is not.  If a work stoppage lasted into late summer or even early fall, the options and inventory crunch would only be that more severe.

So as the lockout drags on, the impact is much further reaching then just the fans, owners and players. The marketing plans of automakers, beverage brands, financial services firms, telecommunications providers and consumer product companies all hang in the balance.

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