After more than three months, live sports returned to the delight of fans, publishers and advertisers. Starting in late July, three of Canada’s most popular team sports; hockey, basketball and baseball were back in action. After a dismal second quarter, caused by the lack of sports, this could not happen fast enough for the advertising marketplace.
To fully understand the impact sports programming had on the market, we leveraged our detailed ad intelligence data sourced from actual invoices from the top media agencies in Canada. The data shows that from April through June 2020, the television ad spend market declined by an astonishing 45%. To put this in perspective, this decline was greater than the financial meltdown that triggered the 2008-09 recession. The loss can be attributed mostly to the absence of live sports, which reported a year-over-year decline of 90%. To no one’s surprise, sports accounted for 30% of all TV ad spend losses during the quarter.
Historically, second quarter has been one of the most popular times for sports fans with both the Stanley Cup playoffs and NBA postseason occurring simultaneously, along with Major League Baseball’s regular season in full swing. Prior to the pandemic, the Canadian ad market had been strong, with ad spend in first quarter 2020 down by only 3%, despite the pandemic shutting down sports during the final weeks of the quarter.
In second quarter 2019, live sports accounted for 17% of all TV ad spend in Canada
In second quarter 2019, live sports accounted for 17% of all TV ad spend in Canada, with the pandemic, most of that revenue was lost in second quarter 2020. The good news is, with the leagues returning to action they are all scheduled to play into October. As a result, the TV ad spend lost in second quarter 2020 can now be reallocated from August through October. October will be especially beneficial to publishers, advertisers and viewers with three postseason leagues playing simultaneously. We are forecasting a strong three-month period in ad spend, amplified by the postseason.
The NBA and NHL postseason running into October, will lead to a shortened offseason. The 2020-21 NBA season is now scheduled to start on December 1. The start of the 2020-21 NHL season could also be delayed until early December.
Prior to the pandemic, both the NHL and NBA had reported strong ad revenue figures for 2019. The NHL had year-over-year revenue growth of 6.3%. The NBA with the aid of the Toronto Raptors winning their first championship, reported significant 33% year-over-year increase in ad revenue.