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Companies bet on sport after Hollywood strikes

Brock Purdy #13 of the San Francisco 49ers prepares to take a snap in the first quarter against the Kansas City Chiefs0 during Super Bowl LVIII at Allegiant Stadium on February 11, 2024 in Las Vegas, Nevada.

Michael Reaves | Getty Images

Media giants leaned on sports last year when they had to woo advertisers during the week of Upfronts meetings, at a time when a Hollywood strike and cost cuts weakened their content and advertising power. star.

This year, even though the stars took to the stages again after the strikes ended, the presentations still relied more on sports than on scripted shows.

Due to last year’s work hiatus, some media companies had fewer series and films to highlight during their presentations. Reduction of business costs, in particular Disney And Discovery of Warner Bros. Didn’t help matters.

Live sports have remained the darling of Upfront meetings because they consistently attract the largest audiences and, therefore, the most advertising dollars.

“I think (the companies) benefited in terms of profits during the strike. And I think there was a hesitancy to step up because of all the difficulties of understanding how material spending content was actually generating revenue,” said Tom Rogers, Oorbit Gaming and executive chairman of entertainment and former president of NBC Cable.

“There used to be this kind of automation, where you would put out a certain number of programs for the new season and it was relatively formal without really feeling like you could understand how the content drove profitability,” he said. he adds.

He highlighted two key issues for traditional media companies: the decline of traditional television and the increasing fees companies must pay to broadcast live sporting events.

“If you want to maintain a reduced level of content spending, by definition that means your entertainment programming has to be reduced,” Rogers said.

Light on entertainment

A scene from season 3 of Marvel’s Daredevil on Netflix

Source: Netflix

Disney released trailers for upcoming Disney+ series “Agatha All Along” and “Daredevil: Born Again,” but for its cable network FX, it only highlighted the next season of the popular series “The Bear “, which is also streaming on Hulu. The company also announced “Golden Bachelorette,” the next episode of the popular reality series airing on the ABC broadcast network.

Warner Bros. Discovery has brought series like “House of the Dragon” and “And Just Like That” – two spin-offs of the HBO series – to the forefront.

“A strong content slate — whether it’s sports or entertainment — is only one piece of the puzzle, though,” said Amy Leifer, director of advertising sales at DIRECTV Advertising. “With the explosive growth of ad-supported streaming, the modern TV experience depends as much on the content as the ads that support it.”

Certain films have played a significant role in the Upfronts, especially after streaming services like NBCUniversal’s Peacock recently received a boost from blockbusters like “Oppenheimer.”

Comcast’NBCUniversal’s focus has been on the upcoming musical film “Wicked” and the renewal of some Peacock original series.

The summer movie box office season, which runs from the first weekend in May through Labor Day, is expected to decline by about $800 million this year as the season brings a limited and unstable flow of successful films. This follows a second quarter lagging nearly 50% behind ticket sales recorded during the same period last year.

The film calendar is expected to accelerate in the fourth quarter, with major titles like Warner Bros. “Joker: Folie à Deux,” Paramount’s “Gladiator II,” Disney Animation’s “Moana 2” and Universal’s “Wicked” are coming to theaters. The 2025 and 2026 calendars are expected to see a significant increase in the number of titles, including features from major franchises like Marvel, Star Wars, Batman, Super Mario Bros. and roll-over tickets to a third Avatar film.

Meanwhile, tech giants like Netflix and Amazon Prime Video, which recently added cheaper, ad-supported tiers to its streaming platforms, entered Upfronts week with a bang, showcasing not only sports but also upcoming movies and series.

Amazon, which now owns MGM Studios, highlighted renewals and upcoming seasons of original series such as “Mr. and Mrs. Smith,” “The Boys” and “The Summer I Turned Pretty.” Actor Jake Gyllenhaal announced a sequel to “Roadhouse,” and Will Ferrell and Reese Witherspoon discussed their film “You’re Cordially Invited.”

Netflix, meanwhile, announced the sequel to Adam Sandler’s “Happy Gilmore,” as well as a slew of other series.

Sports domination

The Olympic rings placed in front of the Eiffel Tower to celebrate the French capital won the right to host the 2024 Summer Olympics.

Sopa Images | Light flare | Getty Images

The NFL once again reigned supreme over most Upfront presentations this year.

Top sports programs, from the Summer Olympics to the NBA – which attract the largest TV and streaming audiences, as well as large amounts of advertising dollars – were also key parts of the presentations.

“We often hear from large clients that the importance of the initial purchase has diminished outside of securing placements in live sports,” said Mike Dupree, chief revenue officer at Teads, a global publishing platform. top of the line.Access to quality content in an on-demand world has reduced the scarcity that historically motivated the initial model. Live sports appear to be the last bastion, as evidenced by rights renegotiations. »

NBCUniversal dedicated much of its presentation to the upcoming Summer Olympics in Paris. The NFL played a role in all presentations, including for the new entrant to the ad-supported streaming landscape, Netflix. He may have made a splash in sports during Upfronts week, when it was announced hours before his presentation that he had struck a deal to broadcast NFL games on Christmas Day for the next three coming years.

Amazon introduced Thursday Night Football, its second Black Friday game and an upcoming wild card playoff game in January – the first ever for Prime.

“This year, we’ve seen media giants bank on big bets like ‘Wicked,’ the Olympics and sports superstars like Jason Kelce to generate buzz,” said Tim Hurd, vice president of activation. media at digital marketing agency Goodway Group. “There was a lot of excitement around the evolving live sports landscape and leveraging college sports, NFL games and the Olympics as an omniplatform experience.”

Kelce, who recently retired from the NFL after 13 years with the Philadelphia Eagles, appeared at Disney early on to announce that he would be a commentator for ESPN starting this season. His appearance made headlines — as he and his brother Travis Kelce tend to do — when he met “Abbott Elementary” star and creator Quinta Brunson during the event.

—Sarah Whitten contributed to this article.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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