Canadians Rejoice as Sports Return

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 spend 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.

Nonetheless, in 2019, despite the Raptors championship run, the ad revenue for NHL games were four times greater than NBA games. (The last team from Canada to win the Stanley Cup were the Montreal Canadians in 1993). In the 2019-20 season, our data shows that the average cost for a :30 ad on major networks for NHL games was nearly $7,000 for an in-game broadcast, compared to just over $2,500 for an NBA in-game :30 ad. In the coming months, the market will gain a better understanding of how the cost of ad placements has been impacted based on COVID-19.

When looking at ad revenue for sports broadcasters in 2019-20, CBC and Rogers held the majority, accounting for 83% of all ad revenue for NHL games, with Bell Media garnering 10% and Quebecor Media the remaining 7%. However, for NBA games the ad revenue is more evenly distributed with Rogers accounting for 51% of ad revenue and Bell Media 49%.

Sports programming continues to be a major driver of brand ad spend and subsequently broadcast revenue. We will continue to watch how both brands and publishers respond, as the leagues navigate this unique 2019-20 season.

With regular season resuming, here’s a helpful overview of NHL, NBA and MLB regular season and postseason.

Hockey

The NHL had suspended the regular season on March 12 and picked up the action on August 1. After play suspended, the 31-team league brought 24 contending teams, 12 in each conference, to the two hub cities of Toronto and Edmonton. Under the arrangement, the top four teams in each conference, based on regular-season records, play in a round-robin tournament to determine seeding for the Stanley Cup playoffs. Teams in the fifth through 12th positions in each conference will compete in a best-of-five qualifying round to determine the remaining eight-team playoff field. The Stanley Cup Finals will be played into October. Although there will be no spectators, it will mark the first time the Stanley Cup Finals will be played in Canada since Vancouver in 2011.

Basketball

Players from 22 contending teams of the 30-team NBA league resumed regular season play in Orlando on July 30. The NBA playoffs are scheduled to begin on August 17 with the top eight teams in each conference. The NBA Finals could end as late as October 12. Among the contending teams are the defending NBA champions, the Toronto Raptors.

Baseball

The shortened 60-game regular season for all 30 teams began on July 23-24. The regular season ends on September 27. To increase interest this postseason, Major League Baseball will expand the number of playoff teams from 10 to 16. As in previous seasons, the MLB postseason games will be played throughout October. For the season, the Toronto Blue Jays will be playing all their home games in Buffalo.

Canadian Football League

The nine-team CFL has postponed the start of their season from June 11 to September at the earliest.

Among the five Anglo markets SMI measures, the ad marketplace of Canada was hit the hardest by the pandemic. The return to live sports gives the ad marketplace a big boost.