Networks have to repay advertisers for low NFL ratings

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The NFL’s television ratings decline this season is beginning to make a dent in the bottom line for major networks. Broadcasters like CBS and NBC saw sharp increases in audience deficiency units (ADUs), or “makegoods,” which are payments they must make to advertisers when ads do not receive the promised volume of impressions.

In other words, fewer people watching football means fewer eyeballs to see ads, and the networks that broadcast NFL games are paying the price.

The major football networks all took a major hit last month in NFL ad revenue—the money they bring in from advertisers that pay for air time during football games.

In the month of November, NBC’s NFL ad revenue sunk 17% compared to last year, according to new data from the Standard Media Index.

CBS saw a decline of 26%, Fox saw a 34% decline in its NFL ad revenue.

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The makegoods that networks must hand to advertisers come in the form of free airtime—they repay their obligation by giving the advertisers ad space in a different slot. SMI, which tracks more than 70 percent of all national TV ad spending, found that NBC and CBS gave away 20% of inventory as ADUs in November 2016, compared to just 5.2% and 11%, respectively, a year earlier. There is no public consensus over exactly why football has steadily lost viewers this season. The league’s official stance early on was that the election cycle was distracting from football, but six weeks after the election, ratings have continued to fall.

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