As the guys from Yahoo! Sports taught us in Death To The BCS, there are some winners in this BCS bowl system to go alone with the host of losers. One of those winners is ESPN.
Did you watch the Beef ‘O’ Brady’s Bowl last night? Considering the other options, there is actually a good chance you caught at least some of the game. But it doesn’t really matter. ESPN has found a way to sell advertising to games you aren’t even watching.
In 2012, ESPN owns the rights to all five of the BCS bowl games. Those are obvious cash cows. Last year BCS title game delivered a cable-record 27.3 million viewers. Beyond the obvious must-see bowls, Bristol even makes money on the smaller bowl games. It’s a smart model regarding advertising, really. ESPN’s “baby bowls” are sold as package deals. This means rather than sell time in individual allotments, the network places clients across its entire postseason college football schedule.
On paper, last night’s Beef ‘O’ Brady Bowl doesn’t sound like a sexy spot for big name adverts. The Conference USA and Sun Belt markets might not be the most desired for large companies, but this package system makes these smaller games enticing to national brands.
Maybe the most interesting tidbit to come out of AdWeek’s article is this;
In exchange for its broadcast feed and high-def simulcast, Bristol charges cable and satellite operators an average of $4.69 a month per subscriber, according to SNL Kagan data. Multiply that by 99 million subscribers, over 12 months, and ESPN’s annual affiliate revenue haul works out to be $5.57 billion. To throw that into greater relief, note that ESPN’s subscriber revenue is roughly 36 percent of CBS Corp.’s market cap.
ESPN (and Pixar) must account for such an immense portion of Disney’s actual profits. The 800-pound gorilla term is overused. But, when it comes to ESPN, there really is not a more exemplary situation.
Maybe there is a better expression, though. ESPN is the 12,000 pound potato in the room.
Ed Erhardt, ESPN’s president of customer marketing and sales, previously told AdWeek, “A lot of the baby bowls and BCS games move really fast because there are so many season-long deals. A lot of postseason inventory is baked-in.” ESPN works out deals that span regular and post-season games. This, in turn, makes the Famous Idaho Potato Bowl a more viable advertising platform.
Not only are the spots sold out, but the price point favors ESPN as well. In a stagnant market, CPMs are up between 11% and 13% from the 2010 season.