Late last week, ESPN’s parent company, Walt Disney, said that it was not that concerned by the impact a lock-out would have on its revenues, arguing that if advertisers wanted to reach the demographic that the NFL is reaching “it’s going to be sports, and these sports are going to be carried by ESPN.”
Others have put forward similar arguments. Prior to the lock-out, investment bank Wells Fargo Securities said: “We could actually go out on a limb and make the argument that the broadcast networks won’t be in such financial straits during an NFL lockout. For one, football viewers are unlikely to abandon television altogether, so we could see a dislocation of viewership benefitting primetime, which means better ratings. Second and more importantly, advertising dollars need to go somewhere. We don’t expect all football dollars to be replaced – but we do think that incremental ad dollars going to primetime will likely drive up rates and potentially boost network margins. Think about it – low margin sports dollars will be replaced by higher margin primetime margins.”
However, the bank warned that there was a risk that viewers would migrate to cable networks and said that the networks should not be too optimistic as “the loss of professional football has wide-reaching implications. It is a huge part of television, as it helps to promote the entire prime-time line-up.”
The NFL’s total revenue in 2009 was $7.8 billion (€5.7 billion), about half of which came from television rights and sponsorship.