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ESPN Owes Upwards of 20 Million For Ratings Shortfalls

Despite the efforts of the College Football Playoff committee and some media outlets downplaying the financial hit ESPN took by being forced to televise the two national championship semi-final games on New Year’s Eve, media buyers say the network owes upwards of $20 million in ad makegoods for ratings shortfalls for the two games.

ESPN may have gotten a bit greedy when setting its ratings estimates and offering higher guarantee levels to advertisers for the two games, knowing audiences might not flock to their TV sets, despite the optimism of the CFP committee. However, advertisers are concerned about next season’s potential audience levels for the games, which will also be televised on New Year’s Eve. Even if the ratings guarantees by ESPN are set lower, advertisers would prefer the games be moved to New Year’s Day or even on consecutive primetime nights, exclusive of New Year’s Eve, when more people would likely watch.

But CFP committee officials are on record as adamantly supporting the continued airing of the playoff series games on New Year’s Eve as scheduled, which will occur in seven of the remaining 10 years of the 12-year original deal. And that position has been taken even after the 36% combined ratings decline for the two games was disclosed.

So ESPN is caught between a rock and a hard place. On one hand, it has to keep its mouth shut and parrot the CFP’s belief that ratings will get better in subsequent New Year’s Eve telecasts, even though privately they believe that to be nonsense. It can’t been seen criticizing its long-term partner publicly. On the other hand, ESPN has to hear the wrath of its advertisers who saw their ad dollars spent on the severe under-delivery of the guaranteed audience for the two games.

Some media outlets have pointed out that since ESPN sells packages for all the bowl games and a sizable number of advertisers are in all of the games, that the New Year’s Eve ratings shortfalls were considerably mitigated.

One buyer called that analysis “a bunch of spin,” adding that College Football Playoff Committee executive director Bill Hancock’s statement that the New Year’s Eve games’ ratings declines were simply “modest” was “just plain wrong.”

Try selling the “modest” ratings declines to the movie studios that were in those New Year’s Eve games who paid big bucks to reach an audience they wanted to reach immediately that turned out to be more than one-third less than the size that they paid for.

Sure they can get makegoods down the road, but some marketers needed those eyeballs sooner, not later.

ESPN is trying to make things right with its advertisers, although its sales executives will not discuss the situation publicly beyond a general statement issued by a network spokesperson.

“As is standard practice with any sponsored television event, inventory is managed and contingencies are put in place to protect advertisers,” the ESPN statement reads. “The specifics of those deals vary and we work with our advertisers to make them whole in the event of a shortfall.”

 

Media buyers are sympathetic to ESPN’s situation and are also appalled and angry at the attitude of the NCAA and the College Football Playoff committee and the public comments being made by their executives.

The CFP’s Hancock told The New York Times this week, “We don’t make decisions based on television numbers. I don’t have a TV number that influences my measurable for success.”

Talk about a slap in the face to his media partner ESPN which is now some $20 million in the hole because of Hancock’s arrogance, after the network paid the CFP $600 million for the TV rights of the bowl games, including the two New Year’s Eve semi-finals.

 

To read the rest of this article visit Broadcasting Cable who originally published this article

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