Detroit Tigers dominate TV ad market despite ratings, attendance dip

Monday, Mar 30, 2015

Fox Sports Detroit said it has been able to increase Detroit Tigers broadcast advertising rates by nearly 10 percent over last year, thanks to consistently strong audience numbers its telecasts generate.

"We're seeing rates rising in the high single digits," said Greg Hammaren, the Southfield-based network's senior vice president. "Tigers telecasts on Fox Sports Detroit are the most dominant platform on television in Michigan. This is the No. 1 show in prime time across the state of Michigan."

But after four consecutive years in the playoffs as a division champion, but without a World Series championship for the team, is fan patience waning slightly?

Attendance at Comerica Park fell 5.6 percent to 2.9 million last season, and the number of sellouts dropped from 33 in 2013 to 27 last year.

Local television ratings declined as well, by 24 percent for FSD, and this year's high single-digit ad rate increases are actually a slight drop-off from 2014.

"Rates had been rising double digits, but that isn't sustainable," Hammaren said.

All of the numbers that saw declines were difficult to sustain because they were among the best in Major League Baseball.

Fox Sports Detroit said advertiser enthusiasm for Tigers broadcasts is reflected in a 30 percent increase in ad booking for the 2015 season compared to 2014, he said.

"The money is coming in early and larger than it has in the past, and we still expect more dollars to come in before the season starts," Hammaren said.

He expects 90 percent of all inventory to be sold by Opening Day (75 percent was the goal, and a typical rate for most RSNs), with the remainder held back for advertisers who want to come in later in the season.

"We have many clients that spend in the seven figures just on Tigers baseball, and many of those have been with us for more than seven years," Hammaren said.

The network doesn't disclose specific financial data, but New York City-based data analysts SNL Kagan forecasts that FSD will generate $179.7 million in net operating revenue this year, of which $19 million is predicted to come from advertising.

Those estimates are up from $165.9 million in 2014 revenue ($17.6 million from ads), according to data provided by SNL Kagan.

Most of that revenue is from FSD's 150 Tigers telecasts, but also from its broadcast rights deals with the Detroit Red Wings and Detroit Pistons.

The network's operating expenses also are predicted to increase, to $133.4 million from last year's $123.3 million.

The network pays the Tigers about $50 million a season for rights to air games. Fees for the Pistons and Red Wings are about $25 million each annually.

The majority of FSD's revenue comes not from advertising but from the per-subscriber fee it charges cable providers every month to carry the network.

Kagan estimates FSD's average monthly per-customer fee this year to be $3.75, an increase from last year's $3.45 and up from $3.18 in 2013.

Industry source told Crain's last year that Fox Sports Detroit charges about $6,137 for a 30-second commercial during Tigers games. The network declined to discuss specifics about its rates.

Broadcasts typically have about 60 commercials during a Tigers game, but the inventory is dictated by the length of the game, pitching changes and other factors.

The network said it has about 150 separate advertisers for its 150 Tigers games, and all but one of the major accounts returns for 2015.

Not returning across all of Fox's regional sports networks is AT&T, a national account handled by a Fox Sports Media Group unit called Home Team Sports.

Eau Claire, Wis.-based home improvement retailer Menards is the network's major new advertiser this season.

The 149 games broadcast last season by Fox Sports Detroit averaged a 7.72 household rating, according to Nielsen data, which was second best in all of baseball after only the St. Louis Cardinals' 7.89 average rating for 147 games on Fox Sports Midwest.

Detroit topped all of MLB for local ratings in 2013 with a 9.59 average, and in 2012 with a 9.21 average.

Aiding the network is that sports are relatively immune from the trend of TV viewers recording shows on their DVR and skipping the advertisings, a trend that has sapped some non-sports networks of ratings and revenue.

"The one area that's not taking place is sports. The audiences continue to make appointment television with live sports," said Lee Berke, president and CEO of Scarsdale, N.Y.-based sports media consulting firm LHB Sports, Entertainment & Media Inc.

The Tigers' enormous local ratings and the network's reach across the entire state are attractive to advertisers — they get a lot of eyeballs all over Michigan — and help fuel the rate increases.

Fox Sports Detroit has about 3.6 million subscribers in Michigan, and there are fewer than 2,000 households in Michigan that don't have the network, the network has said.

It has deals with hundreds of cable and satellite providers across the state, from Comcast and DirecTV to small mom-and-pop operations.
New tools

Fox Sports Detroit has a new way to boost ad revenue this season.

"We're going to experiment with virtual signage in a couple of away Tigers games," Hammaren said. The network has done virtual ads, which appear only on television, during Red Wings broadcasts in recent years.

During Tigers games, an ad will appear behind home plate to FSD viewers during a pair of road games this season.

"If it's a successful test, we may expand that," Hammaren said, adding that testing of virtual ads last season produced mixed results. Technical tweaks were made to improve the virtual ads.

"This provides an unobtrusive way of adding more inventory," he said. Tigers advertisers who buy home-plate advertising at Comerica will get the first crack at the road-game batter's box ads, he added.

Another addition to telecasts this season will be the use of a couple of new super slow-motion cameras able to synchronize with the lights at the ballpark — something that reduces or eliminates flickering when the action is slowed way down, Hammaren said.

The network also shook up its broadcast team, adding former Tigers outfielder and coach Kirk Gibson and former pitcher Jack Morris as analysts for games this season.

They'll alternate with each other and with longtime analyst Rod Allen to work alongside play-by-play announcer Mario Impemba.

District Detroit deal

There's a new aspect this year to the network's relationship with the Tigers and Wings: It has begun producing pre- and in-game content to air on networks in other markets about the $535 million Red Wings arena and entertainment district — known as The District Detroit — now under construction for a 2017 opening.

The segments will air in the home markets of teams visiting Detroit.

"We're trying to tell the story of this massive rebirth of the city spurred by the rise of this new hockey arena," Hammaren said.

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