The NFL’s sportsbook partners have spent $50.7 million on in-game advertising since the NFL season began on Sept. 9, and while CBS, Fox and NBC have been quick to cash in on the new marketing category, ESPN has yet to fully jump into the fray.
According to the commercial-tracking service iSpot.tv, the three broadcast networks have all but maxed out on gambling spots, with each booking the league-mandated maximum of six sportsbook ads per game. Under the terms of the NFL’s new policy, the TV outlets are allowed to air one gambling unit in each quarter, as well as a single spot during the pregame and halftime shows.
FanDuel thus far has been the most aggressive investor, booking some $23.5 million in NFL inventory over the first three weeks of the 2021 campaign. FanDuel is currently the third-biggest NFL spender on the books, trailing only the deep-pocketed insurance brands Geico ($31.7 million) and Progressive ($26.5 million). Also contributing to the fall gold rush are DraftKings ($13.6 million), Caesars ($8.34 million) and BetMGM ($5.23 million).
While over-the-air networks have been more than happy to rake in all those newly minted ducats, ESPN and its broadcast sibling ABC for the most part have watched the action from the sidelines. But for a handful of DraftKings transactions—the sportsbook bought two units in the Sept. 13 Monday Night Football opener, a Ravens-Raiders showdown that was simulcast on ABC, and a standalone spot in the following week’s Lions-Packers telecast—the Disney nets effectively have passed up on a $12 million opportunity.
A Disney ad sales rep didn’t respond to an inquiry into the sportsbook freeze-out, but execs with insight into the NFL marketplace said ESPN is playing the long game. “They’re shopping around for a licensing deal that could bring in as much as $3 billion, so what they’ve been leaving on the table is chump change,” one TV sales vet said. “They don’t want to put themselves in a situation where they have one sportsbook buying a lot of time on Monday night, only to get the exclusive marketing deal done with another book and suddenly face a conflict of interest.”
While ESPN has yet to finalize a licensing deal (the discussions are said to be in the exploratory phase), it’s likely that such an arrangement would include an exclusive marketing commitment, one that would see a DraftKings or a Caesars invest its entire ad budget in the company’s various TV and digital platforms.
Setting aside the hypothetical licensing intrigue, ESPN’s seeming reluctance to scoop up the sportsbook bucks may simply be a function of its limited supply of ad units. Per the terms of the network’s affiliate contracts, national ad time in ESPN’s Monday Night Football flagship is pared down to a tight 50 units per game, with the remaining inventory going to the operators. By comparison, the broadcast nets sell around 68 in-game units.
Given the contractual restrictions on ESPN’s ad load and the fact that the bulk of the Monday Night Football slots had already been accounted for by the time the NFL had lifted its ban on Aug. 12, it probably would have been difficult to accommodate the sportsbooks even in the absence of any ongoing licensing talks. In what is very much a sellers’ market—the strongest in at least 20 years—you’re not leaving a lot of money on the table even if you can’t hop on the season’s hot new trend.
More to the point, the sportsbook category isn’t going to dry up overnight. Anyone who sits out the 2021 gusher can always check back in a year from now, when mobile sports betting is likely to be legitimized in half of the Lower 48. “This isn’t 2015, when FanDuel and DraftKings spent $200 million on TV in a couple months and then disappeared,” the ad sales vet said. “You knew that wasn’t going to last, and as long as you didn’t get too greedy or too stupid, you could enjoy the ride without having to worry about crashing into that brick wall. There’s no brick wall here.”
While category spending was somewhat less frenzied in Week Three, with overall investment increasing by some $10 million, versus the $20 million gains noticed in Week Two, the slowdown is a sign that the active sportsbook advertisers have been meeting their marketing objectives.
“If these guys are hitting their targets, and signing up X amount of new customers, they can take their foot off the gas a little,” the ad sales pro said. “But remember, there are still a couple sanctioned brands that haven’t even started spending yet. Caesars has been a lot more visible just in the past week, and BetMGM is starting to show signs of life. And WynnBET, I don’t think they’ve spent a dime on TV yet, and their plan is to drop $100 million during football season. So, there’s going to be an ebb and flow in terms of the individual [brands] as we get to October, November, but this money is very real. And it’s adding up to quite a pile.”
That it is. Per iSpot estimates, sports gambling is the NFL’s sixth-biggest ad category behind insurance ($103.4 million), automotive ($93.9 million), streaming services ($65.9 million), fast food ($63.4 million) and wireless ($58.6 million). The new revenue stream is currently pumping more cash into the TV ecosystem than are a number of perennial sports backers, including beer, movie studios, soft drinks and financial services.