It’s a good time to be in the college football business. Just ask the folks at The Walt Disney Co. and ESPN.
The new, expanded 12-team College Football Playoff gets underway next weekend and if you took the over on advertising revenue–like ESPN-you won the bet.
Jim Minnich, senior VP, revenue & yield management, Sports & Entertainment at Disney Advertising, told Barrett Media that advertising inventory in the College Football Playoffs is 95% sold out and the company is seeing high double-digit revenue growth, Even with the added supply in the market because of more games and higher ratings forecasts, prices for commercials on a cost-per-thousand viewers (CPM) are up.
“We’re very well sold across the four rounds. We’ll see another wave [of advertiser interest] once the first round winners head into the quarterfinals,” Minnich said.
According to people familiar with the situation, spots in the Championship game have sold for between $1.4 million and $2 million, compared to about $1 million to $1.1 million last year.
The playoffs are generating a lot of buzz, concurred Adam Schwartz, senior VP, integrated investment, sports, at Horizon Media. “Outside of the NFL, college football is the next biggest thing. From an advertisers standpoint, these are going to do really, really well.”
The new 12-team set up has remedied some of the problems that have built up for the college game over the years.
When there was a single national championship game, and even with the four-team playoff, there was a long lull in the college football season between the conference championship games and the bowls.
On top of that, with the best teams in a four-team playoff, even the venerable New Year’s Six Bowls lost their luster when they weren’t part of deciding who’s No. 1, Schwartz said. On top of that, many of the most exciting players were opting out of participating in the bowls because they were worries about injuries or preparing for the NFL draft combine.
All of that reduced fan interest and reduced ratings.
“Basically college use to go away for a month and have the semifinals and the finals. Now they have a full month to storytell,” Schwartz said. “There are just more big games.The first round on college campuses like South Bend, Indiana, is going to be very cool and I think the casual viewer is going to want to see what this is all about.”
ESPN agreed to pay $1.3 billion a year for the rights to the College Football Playoff as part of a six-year deal announced in March.
With two more games in the playoffs to sell this year and an expectation of audience growth Disney couldn’t simply rely on the advertisers who have sponsored college football in the past to pick up the slack. Minnich said that 66 new advertisers have bought College Football Playoff commercials this year that didn’t a year ago.
“I do think the schedule lends itself to this,” Minnich said. Instead of being focused around New Year’s, the expanded playoff schedule features early games that will air before Christmas, an important time for many marketers. And since the championship game won’t be played till January 20, it give sponsors more time to air multiple commercials. “This is a much different setup than in past year, so it allows for a broader switch of advertisers.
On top of that, the new playoffs system includes more teams, more fan bases, more dark horses and a greater possibility that one of the Top 4 teams will be upset.
“There’s excitement in the conversations around the expanded playoffs and the fact that frankly every week felt like elimination week in the regular season.
Disney’s key advertisers for the playoffs on ESPN are its 15 CFP partners,many of which are on multiple deals. Those partners are Allstate, AT&T, Capital One, Cheez-It, Chick-fil-A, Dr Pepper, Gatorade, Goodyear, Great Clips, Mercedes-Benz, Modelo, Prudential, RAM, Taco Bell and Vrbo.
“They’ve supported the college football playoff and our college footbal landscape and our portfolio, frankly across our platform and platforms for multiple years. So this is not new to them,” Minnich said.
With the 66 new advertisers in the fold, the playoffs will have a broader range of product categories represented. So far there are 128 total advertisers across 58 categories. Some of those categories are showing year-over-year growth, Minnich said. “Autos is up, insurance is up, restaurants is up, pharmaceuticals is up and cellular telcos are up as well,” he said.
Minnich said that at this point the number of spots left to sell in each round of the playoffs are in the single digits. Disney has a few tricks up its sleeve to boost ratings and revenue. Games will be simulcast across ESPN platforms and some alternate telecasts are in the works.
One buyer said that advertisers who bought commercials in the payoffs earlier–during the upfront or through multi-year deals–paid higher prices than in past years.
“Now Disney’s expecting higher viewership and they’re expecting more money,” the buyer said, noting that prices were up between 20% and 30% per 30-second spot. In the scatter market, where commercials are bought at the last minute, “they’re killing it. For those last few pieces of inventory, prices have been through the roof.”
Thanks in part to the new playoff system, college football has a strong seasons, with the total average audience up 6% and up 11% among adults 18 to 34, according to Nielsen. “College football owns Saturdays. It really does,” MInnich said.
The spike in interest in college football has also boosted ESPN College Game Day, he added.
“We’ve had significant success in the regular season and I think the expansion of the CFP has absolutely blown away people’s expectations. Every game actually matters now in the regular season,” Minnich said.
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