Sports TV Trends and Analysis -- Pivotal Research Group

Sports programming remains an important source of viewing of traditional TV networks. As a genre, it represents an outsized source of costs, revenues and strategic leverage between networks and distributors. We estimate that viewing of sports programming on national TV properties during 2016 amounted to approximately 36bn person-hours on a live+same-day basis across all dayparts and all people, and around 38bn person-hours including time-shifting on a similar basis. This represented 10% of total national TV viewing hours including 7 days of DVR playback, which amounted to 374bn person-viewing hours during 2016. All live and time-shifted viewing (which includes viewing on local properties) amounted to around 490bn person-viewing hours in 2016.

As is well-known, live sports viewing has generally held up well despite ratings declines, and has become increasingly important for national network owners. Over the past decade, live+same-day viewing hours of sports programming is actually up by nearly 7% in total, although half of this growth was attributable to the inclusion of summer Olympics in 2016 vs. winter Olympics in 2006. Over the past year, all nationally rated sports viewing on a live+same-day basis (and on a live+7 basis) was up by 5% during 2016 over 2015, although excluding Olympics viewing was down by -3%. For reference, all other nationally rated viewing hours fell by -1% during 2016 vs. 2015. By network group during 2016, Disney properties, primarily including ESPN, accounted for 32% of total viewing. NBCU properties generated 20% of viewing, with more than a third due to Olympics programming. Fox properties captured around 16% of total viewing, while CBS represented 13% of the total.

Key observations from our analysis through week 11 of the calendar year (ending Sunday March 12), for which live+same-day data became available yesterday, follow:

• Year-to-date, viewing of sports TV on national media properties has fallen by -1%. For the 11^th week itself, similar sports viewing was up by +6%. Disney-owned properties accounted for 47% of all sports-related viewing during the week, representing growth of +9% year-over-year.

• During the most recent week, basketball was dominant, as is typical this time of year with a 47% share of sports viewing on a person-viewing hours' basis. College basketball by itself accounted for nearly 36%, while NBA programming accounted for 11%. Total viewing of all basketball was up by +14%, with college basketball up by +13% and professional basketball up by +14%. ESPN-related networks – which collectively accounted for 63% of all basketball viewing – has been the primary beneficiary here, with viewing up by +30%. Basketball continues to grow in importance for the sports genre, rising from 14% of live viewing to 20% between 2006 and 2016, representing cumulative growth of 7% over that time.

• Sports Commentaries (e.g. ESPN's SportsCenter) was the next-most important type of sports programming, with a 16% program-viewing share for the week. This figure represents a decline from a 17% share last year. For the week, viewing was actually up by +2%, but year-to-date viewing has fallen by -9% for the genre. ESPN and related properties – again, the biggest player with 75% of related viewing during the week – saw a -6% decline for the week building to a -14% decline year-to-date for their networks. Commentaries continue to diminish in importance, with consumption falling by -32% from the 2010 peak. On a full year basis, commentaries accounted for 29% of sports viewing during 2016, down from 33% in 2010 and 35% in 2012.

• All other sports genres were relatively minor during the week, with golf and baseball accounting for 6% of viewing and soccer around 5%

FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: TV Update 3-17-17.pdf

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