Time: 1 hour 15 minutes
Wall Street Journal
By LAUREN A. E. SCHUKER
Since the National Football League locked out its players about two weeks ago, some cable and broadcast networks have been preparing contingency plans to air alternative programming in case games are canceled this fall.
Advertisers, who spend roughly $3 billion a year on commercials that run during NFL games, also are forging new plans and considering buying commercial time on other marquee programming should the work stoppage continue into the football season. Some advertisers already have bought commercials on Viacom Inc. television networks as a backup.
"Football is so important to networks and buyers that they can't afford not to plan ahead," says Sam Armando, who heads television research at SMGx, an ad-buying consultancy arm of Publicis Groupe SA. "Both networks and advertisers are definitely working on a Plan B.
"It's not like you can replace football overnight with other sports or prime-time shows," he continues. "There are contracts and schedules and a lot that has be worked out."
Adds Michael Nathanson, a media analyst for Nomura Securities: "The lockout may be resolved over the summer, but these networks and agencies have to plan now for their fourth quarter. And if football is off the air, guess what? You've got a problem."
The standoff between the NFL owners and the league's players over compensation has become particularly threatening to the league's television partners as record numbers of viewers tune in to watch the NFL.
For the second year in a row, the Super Bowl in February smashed records to become the most-watched telecast in U.S. history. About 111 million people watched the game on Fox Broadcasting, according to Nielsen Co. News Corp., which operates Fox, also owns The Wall Street Journal.
Now, the potential cancellation of games would deprive networks of a crucial way to attract large numbers of viewers and advertisers.
While advertisers haven't yet changed their usual May schedule for buying NFL ads, executives say the uncertainty has heated up the advertising market for other programming that draws large audiences. Golf, college football and prime-time dramas are among the areas attracting extra interest.
"We have talked to all our clients, and they're nervous," says Jeff Lucas, who runs ad sales for MTV's music and entertainment divisions, which together include the Viacom-owned networks MTV, VH1, Comedy Central and Spike TV. He says that many of those channels' top advertisers—auto makers, brewers and mobile-telephone companies—are also the top marketers for the NFL.
The NFL's television partners, including CBS Corp., Walt Disney Co.'s ESPN, Fox and Comcast Corp.'s NBC, remain hopeful a work stoppage won't disrupt the coming season, but some are still forming contingency programming. ESPN has the cushion of college football and, along with Fox, can show Major League Baseball games. Other networks will need to be more creative.
"We remain optimistic that a settlement will be reached sooner rather than later, but we are considering contingencies in case it isn't," said a spokesman for Fox Sports, which airs games on Sunday afternoons. A spokesman for NBC Sports, which airs football on Sunday evenings, declined to comment regarding possible contingency plans, as did a spokesman for CBS Sports.
Some cable channels are taking a more aggressive approach. Spike TV, which doesn't own rights to show the NFL, is considering developing several alternatives in case games are canceled on rival broadcast and cable channels. Spike President Kevin Kay says the network, which draws large numbers of men 18-49 years old, is contemplating booking a live boxing match on a Sunday night in the fall to capitalize on a possible NFL work stoppage. Spike is also considering pushing up the start dates of its regular television series, such as football comedy "Blue Mountain State," which would begin in September rather than October.
Mr. Kay says his team already has begun talking with the producers of "Blue Mountain State" to see if they can get their writers to produce episodes sooner. In addition, if NFL games are canceled, he is considering temporarily moving the show—which normally airs at 11 p.m. Wednesdays—to Sundays, when most professional football games are usually played.
"We're already seeing advertisers asking questions about where they can move their money if there is a work stoppage," says Mr. Kay, "and in some cases, we are the answer."
MTV's Mr. Lucas says a number of companies have already committed to advertising agreements on shows across the Viacom networks whether or not the work stoppage continues. He adds that 90% of the roughly 33 million people who frequently watch NFL games are also frequent viewers of the Viacom channels.
"A lot of advertisers depend on the NFL to launch products, but they need to launch those products whether football is on or not," he says.
This article really made me see how fragile the advertising industry is. Moreover, I didn't even consider how many industries would be affected by an NFL strike. It is common knowledge that the NFL brings in huge advertising revenue during their games. And for good reason, their viewership during the regular season is through the roof. If the NFL strikes there will be several industries that will be jeopardized. It is smart for them to have several backup plans, but if the NFL does strike they will still lose a great deal of money.
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