In the course of about an hour on Tuesday, Fox Sports watched much of its college football season vanish into thin air as its two primary conference partners, the Big Ten and Pac-12, elected to postpone fall sports. As rough as those twin absences will be on Fox’s ad sales team, a modicum of relief may be forthcoming courtesy of the Big 12.
The conference this morning issued a modified fall schedule that kicks off on Sept. 26, and if all goes according to plan, the Fox broadcast network and its cable sibling, FS1, will carry a threadbare roster of around 26 college football games spread out over 11 weeks. Based on Standard Media Index pricing estimates for 2019, those Big 12 telecasts could generate around $40.4 million in ad revenue for Fox, or about 20% of what it would have brought in had the Big Ten and Pac-12 stayed the course.
Big 12 Commissioner Bob Bowlsby confirmed that the conference would forge ahead with fall sports in a press conference on Wednesday. “The virus continues to evolve, and medical professionals are learning more with each passing week,” Bowlsby said. “Opinions vary regarding the best path forward… but we are comfortable in our institutions’ ability to provide a structured training environment, rigorous testing and surveillance, hospital-quality sanitation, and mitigation practices that optimize the health and safety of our student-athletes….
“Ultimately, our student-athletes have indicated their desire to compete in the sports they love this season, and it is up to all of us to deliver a safe, medically sound and structured academic and athletic environment for accomplishing that outcome,” Bowlsby said.
While the Big 12 announcement is being cheered in football-crazed outposts like Texas and Oklahoma, the decision is expected to have ramifications far beyond the panhandle. ACC and SEC officials on Tuesday indicated that a call by the Big 12 to suit up for the fall would only serve to bolster their own plans to carry on in the teeth of the pandemic.
For Fox, however, the money generated by its Big 12 games is now largely a consolation prize. The twin postponements will erase some $165.7 million in sales from Fox’s fall ledger, with the Big Ten accounting for the bulk of the losses—around $124.8 million, versus the $40.9 million the company generated with its 2019 Pac-12 slate. Nor will any further relief be forthcoming via Fox’s most recent rights deal, which would have seen it carry 23 Mountain West games beginning this fall. The confederacy of 12 schools pulled the plug on its fall football schedule on Monday.
If there’s any saving grace to having the Big Ten and Pac-12 drop out of the fall rotation, it’s that Fox will save on production costs and rights fees. The latter items add up to a considerable sum—around $365 million when payments to both conferences are combined.
None of which is to suggest that Fox is suffering in isolation. Disney’s ESPN and ABC face a nearly identical ad sales shortfall ($165.9 million, of which $76 million is pumped in by its Oregon- and USC-heavy Pac-12 slate).
Unlike the Big Ten, which is a hermetically sealed powerhouse fueled by internecine rivalries, the Pac-12 relies on a good deal of outside assistance to draw eyeballs (and ad dollars) to the screen. Per SMI data, non-conference games last season accounted for five of the Pac-12’s 10 biggest cash cows, as schools like Auburn (SEC), Michigan State (Big Ten) and Notre Dame (independent) helped boost ad rates for ABC, Fox and NBC. The most lucrative Pac-12 broadcast of 2019 was ABC’s Oregon-Auburn opener on August 31, which scared up $8.55 million in ad cash.
Nor does the Pac-12 enjoy the national following of the Big Ten. Whereas the latter conference’s title tilt between Ohio State and Wisconsin was its most popular and valuable game—Fox’s broadcast averaged 13.6 million viewers and took in $19.4 million in ad revenue—the Pac-12 championship game on ABC delivered a relatively modest 5.9 million viewers and $3.5 million in commercial cash. While the Dec. 6 Utah-Oregon game was the year’s second most-watched Pac-12 broadcast, it was only the eleventh-biggest ad sales driver.
Looking ahead to September, if Fox is to shake off the near-term impact of the COVID-19 slump, it will have to put all of its eggs into the basket embossed with the NFL shield. A loss of as much as 80% of its potential college football revenue will only serve to batter a company that’s already facing significant headwinds. In the quarter that ended last month, Fox saw ad revenue at its broadcast and cable units drop 22%, to $712 million, a loss of some $206 million compared to the year-ago period; a successful NFL campaign could go a long way toward alleviating some of the sting.
NFL broadcasts account for as much as 65% of Fox’s aggregate gross ratings points, and the money follows the deliveries. According to SMI, Fox last year booked $1.07 billion in NFL inventory, an improvement of 12% versus the previous season—and that was before it raked in another $270 million in playoff sales. Outside of the Super Bowl, the network’s biggest moneymaker was the NFC Championship Game, a Packers-49ers primetime clash that averaged 42.8 million viewers and commanded an average rate of $1.73 million per 30-second unit.
And in-game NFL rates will only go up once college football advertisers find themselves shut out of marquee ACC, Big 12 and SEC contests. As brands scramble to satisfy their fall marketing plans—with the production studios in New York and Los Angeles still shuttered, there won’t be much in the way of fresh scripted programming on offer—scatter pricing for a half-minute of airtime in a national NFL window could creep up between $850,000 and $900,000 a pop.
Should the NFL manage to secure a special exemption of the 1961 Sports Broadcasting Act, which prevents the league from scheduling games on Saturdays during the college football season, Fox may look to make a claim for shifting some of its regional windows back a day. While there’s been some chatter to the effect that the NFL may reserve any Saturday slots for digital up-and-comers Amazon and ESPN+, the league remains beholden to linear television, and is about to negotiate another long-term rights pact with its broadcast partners.
That part of the fall sports story is still developing.