Sports attract huge audiences to television. For the 2010 Vancouver Olympics, which spanned 17 days, NBC averaged 24.4 million prime-time viewers. The Super Bowl has become the most-watched television program ever. Advertisers pay millions of dollars for commercial time to reach these audiences. AT&T and Anheuser-Busch each spent $366 million on sports advertising in 2010.
With the exception of the 2008 Beijing Olympics, for which NBC budgeted $1 billion, the networks seldom generate enough revenue to offset fees negotiated by sports leagues. Together, CBS and Fox pay the NFL $1.3 billion a year for broadcast rights. The NCCA men’s basketball tournament cost CBS and Turner $771 million. For ESPN, Fox, and TNT, broadcast rights exceed $570 million a year for NASCAR auto races.
Considering the economics, the networks occasionally retreat from the bidding frenzy
for broadcast rights. NBC opted out of bidding to renew its four-year $1.6 billion National Basketball Association contract after losing $100 million in 2003. What happened? ESPN won the rights for $2.4 billion.
Madness, you say? Maybe not. Consider the experience of CBS, which was the leading sports network in 1994. CBS, trying to make the numbers work to continue its National Football League coverage, was outbid by Fox. Six local CBS affiliates switched to Fox. CBS fell to fourth among the networks with male viewers, an important demographic group for advertisers. Smarting at the setbacks, CBS was not to be outdone. When CBS regained NFL rights again in 1998, the network resumed leadership in terms both of total viewers and the adult male audience. CBS and Fox then bid $8 billion for NFL games from 2007 to 2010, 25% more than the previous deal. And through 2013 CBS, Fox, and NBC agreed to $603 million to $720 million each for NFL games.
The networks have adjusted their business model from seeing sports as a profit center. Instead, sports has become recognized as a loss leader, something that is offered below its retail value because it attracts customers for other goods and services. The goal now is to use sports programs to promote other network programming, to enhance the network as a brand, and to deny coverage to competing networks. At the same time, networks aim to generate enough in advertising and, in some cases, subscription revenue to minimize the loss.
Culturally, this approach has had some negative effects. The sports drain has forced CBS and other networks to emphasize more low-cost programming, like reality shows, for the rest of their schedules. The idea is to tell audiences what’s worth watching after the game. It’s worth noting too, as critics point out, the huge licensing fees paid for broadcast rights make the mega-salaries of top athletes possible.
Writing Prompt Applying Your Media Literacy: Sports as Media Entertainment
Can you think of any other event that generated such a large TV audience and so much spending?
The response entered here will appear in the performance dashboard and can be viewed by your instructor.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more