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According to MediaRadar, an advertising intelligence and sales enablement platform, there might be $1 billion in lost advertising spending combined for the National Hockey League, the National Basketball Association and Major League Baseball because of the coronavirus pandemic.
The analysis by MediaRadar was done exclusively for Forbes, and the estimated loss in advertising spending is for national telecasts only. In addition, the $1 billion is a gross figure, meaning it does not include advertising revenue from substitute programming.
“While there’s much still in the air as far as the total impact COVID-19 will have on American life, one thing is certain: We won’t be seeing professional sports anytime soon,” explains Todd Krizelman, cofounder and CEO of MediaRadar. “The NBA and NHL both put their seasons on pause, and the MLB has delayed opening day. As far as resuming, the most recent reports from all three leagues suggest that June would be the earliest. This leaves a window of time where we’d normally be seeing sports that broadcasters now have to fill. We analyzed the ad spend during broadcasts of these games, over the last few years, to understand the impact of COVID-19 on the leagues’ ad spend in 2020.”
MediaRadar’s analysis found that broadcasts of the NBA, MLB and the NHL, combined, accounted for over $1 billion in advertising spend from March 2019 through May 2019 (the time period we are likely to be without sports). Specifically, NBA broadcasts generated $839 million in advertising revenue, the NHL games brought in more than $120 million, and MLB brought in more than $60 million. “The reason that MLB broadcasts are notably lower in advertising revenue is because their games are early regular-season games, compared to the playoff games of the other two sports,” Krizelman says.
Network Ad spending for NBA, NHL and MLB
The study revealed that more than 900 companies advertised during TV broadcasts of NHL, MLB and NBA games between March 2019 and May 2019. MLB, specifically, saw the most advertisers, and the most growth in the number of brands advertising during games, with an 18% increase since 2017, according to the report.
Leading advertisers for NBA, MLB and NHL.
The deep dive discovered that across all three sports, there are common advertisers that make up large portions of the advertising spend. The top five advertisers by spend were AT&T, Anheuser-Busch, Hyundai, Pepsi and GEICO. Collectively, those five advertisers spent $147 million on television ads during game broadcasts.
The analysis also found that across the three sports in 2019, six industries accounted for nearly 80% of the total ad spend. Of the top six, technology was the largest buyer of advertising dollars, in particular cellphone providers like AT&T and Verizon. Tech was also the largest advertiser in 2017. “Automotive, however, slid from second to fourth place in terms of the largest advertisers as they simply held investment steady while others boosted theirs,” says Krizelman.
