NEW YORK--(BUSINESS WIRE)--This season's decline in NFL primetime television viewership is unlikely to have a negative impact on the NFL's or stadia ratings in the near term, Fitch Ratings says. However, if this trend continues for a prolonged period it could hurt future television contract renewals in 2020 and beyond.
Primetime NFL viewership in the first five weeks of the current season declined by 11%, on average, across all networks, compared to last season. Preliminary numbers for week six also show a decline. The decline in viewership could be attributable in part to competition from the US presidential election coverage. The NFL has experienced declines of similar magnitudes in past election years. Most major sports leagues also experience volatility in games over the first few weeks of the season due to changes in star players, popular team matchups and other competing forms of live entertainment that may be attractive.
We do not view cord shavers (customers with packages that offer the lowest number of channels) as an important factor in the television ratings decline or as a midterm risk. Broadcast and cable networks pay licensing fees to individual teams and sports leagues, such as the NFL, for the right to air sports programming. We expect these fees will likely continue to increase given the traditional draw of sports programming and its value to the networks.
Our midterm view is supported by the fact that sports content is growing faster than other content. The NFL estimates its viewership increased approximately 27% over the past 15 years while primetime viewership is down approximately 36%.
Stadia ticket sales were healthy in the first four weeks, suggesting continued strong demand for the in-game experience. The NFL's measure of ticket sales -- similar to same store sales -- rose by approximately 1% over the first four weeks of the season. The upside potential in same store sales is small, as many stadia are filled near capacity. Some NFL franchises have moved toward dynamic or variable pricing to make ticket revenue more stable, which may have raised same store sales. Under this strategy, ticket prices fluctuate in the days before the scheduled game. This can mitigate ticket-revenue volatility during less important matchups and increase revenues during more popular matchups.
There is a remote risk that continued long-term declines in television viewership could lead to lower premium sponsorship and advertising renewals while stadia attendance continues to be strong.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.
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