The FIFA World Cup is the most-watched sporting event in the world and, as such, one would expect that the advertising and sponsorship dollars generated by this soccer event based on that audience size are also pretty impressive. And they are. Fox recently spent $900 million for the U.S. broadcasting rights through 2026, but the network is expected to lose money on the 2018 event. Why?
For the first time in decades the U.S. team failed to qualify and, as a result, viewership was over 30% less than that for the 2014 World Cup, which was broadcast by ESPN. Apparently, Americans like the World Cup better when the Americans are playing in it, and so advertisers did not get the audience they paid for. This is a problem for Fox because, in the ad industry, audience size is essentially "guaranteed", and if the network doesn't deliver, marketers have to "make good" resulting in free ad spots among other remedies. This means that Fox could lose money on this part of the deal, and marketers there will likely have to adjust expectations for the next Cup four years from now even if the Americans do qualify.
But the absence of the American team might not be the only problem here.The larger picture concerns TV viewership in general. Cord-cutting has resulted in a lot of fragmentation of the media market, which will affect viewership for years to come. Also, youth soccer participation rates are down, which could also affect viewership now and in the future. Telemundo, which has the Spanish-language broadcasting rights and paid even more than Fox, experienced a similar drop, suggesting that even a growing Latino population might not translate into more viewers. So is soccer really all that popular here?
Perhaps not. Soccer marketers face many threats going forward, and they certainly hope that the U.S. team can get its act together so that far more casual fans will watch in 2022. Advertisers will be assessing this sport as a vehicle for communications (a sport that has been growing in popularity over the decades) and will be concerned if consumer interest has perhaps flattened. And remember that all of this is happening as professional soccer leagues in the U.S. continue to expand (largely without profits) in the hopes that they can make lots of money in the near future. Is soccer really going to be as popular as so many in the media have predicted? Indeed the jury is still out on this one.
Discussion: Did Fox and Telemundo overpay for World Cup broadcasting rights? Do you think that interest in soccer has peaked?
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