Thrown for a Mighty Big Loss

By John Greenwald

The football strike leaves advertisers scrambling

Millions of Americans traditionally head for their television sets on fall and winter Sundays with the faithfulness of salmon going upstream. With a beer in one hand and a bowl of pretzels near the other, the fans lean back to watch the professional football wars. The four-week-long National Football League strike, though, has halted those happy hours. The living-room quarterbacks now have little better to do than mow the lawn or wash the car.

Frustrated advertisers are even more dismayed. This season they had planned to pour a whopping $400 million into commercials for everything from autos to chewing gum. The walkout has already cost these companies millions of dollars worth of irreplaceable exposure and could mean a substantial loss of business.

About 15 million households tune in for a game on a typical Sunday, while nearly 18 million usually watch televised football on Monday night. Some 60% of the audience are men, who traditionally make the car-buying decisions, and many of them are college graduates earning at least $30,000 a year. That educational level and income makes them an adman's dream. Says Joseph Ostrow, executive vice president of Young & Rubicam, the largest U.S. ad agency; "Nothing else gives you as big a concentration of these people." CBS's Dallas has an even bigger audience, 19.2 million households last week, but the majority of the program's viewers are women.

Advertisers gladly pay a high price to reach the large football audience. A 30-second commercial averages about $150,000 on games carried by CBS and ABC, and $100,000 on NBC. A one-minute Super Bowl spot costs $800,000, making it the most expensive 60 seconds available on TV.

Detroit carmakers, reeling from the worst year for auto sales since 1961, have been hardest hit by the strike. They had hoped to use the fall games to help boost business. Chrysler, for example, had allocated at least $15 million for professional football advertising. Says Bill Tenebruso, senior vice president of Kenyon & Eckhardt, the New York City ad agency that handles the Chrysler account: "The strike has hurt us a great deal. You really can't replace the football audience. You can try, but it's almost impossible to do." Sums up Thomas Staudt, general marketing manager for Chevrolet, the largest single car advertiser on TV: "The strike has probably affected the auto industry more than any other."

Less hurt by the walkout is the Ford Motor Co., which decided earlier this year to become the exclusive auto sponsor of the 1982 World Series for $1.1 million per game. Said Ford Chairman Philip Caldwell: "We anticipated the strike and didn't invest as much in N.F.L. football this season."

A wide range of consumer products is suffering from the football blackout. Miller Beer had booked ads about one year in advance. Archrival Anheuser-Busch also bought time. Says Jerry Solomon, executive vice president of D'Arcy-MacManus & Masius, which prepared the Anheuser-Busch commercials: "We don't think we can make up all the exposure that we have lost." Atari, which will buy about $50 million worth of television commercials this year to promote its video games and home computers, had planned to spend more than $6 million on N.F.L. games. Laments Theodore N. Voss, senior vice president for marketing: "We are very disappointed. Sunday and Monday night football are almost like the fireside chats of an earlier era. So much of America tunes in that obviously the public looks forward to them."

Although the networks have scrambled to find replacement programs, few have scored very well. Such substitutes as movies and Canadian football games between teams such as the Edmonton Eskimos and the British Columbia Lions have captured barely 25% of the normal audience. Chrysler dropped its sponsorship of Canadian football after just one week of dismal ratings. Says Tenebruso: "NBC had significantly reduced the price, but even so we didn't think we could get value for what they wanted us to spend." The network has since suspended broadcasts of the Canadian games.

Rather than spending the advertising dollars on other shows, some companies are simply reducing their total outlays for commercials. Campbell-Ewald, a Michigan-based agency with annual billings of about $320 million, is keeping 25% of its budget for N.F.L. games in reserve in case the season resumes. Pontiac has not spent any of some $6 million that it had earmarked for N.F.L. games. Says Jim Graham, Pontiac's marketing director: "We're banking that money and holding it for the future."

The strike could mean sharply lower earnings for the television networks. Says Susan Watson of E.F. Hutton: "Nothing else has the same appeal as football, so the networks are likely to lose revenues. I cannot believe that all of the money will simply be shifted to other programs."

Ted Turner, the inventive Atlanta cable-television tycoon, may still find a way to turn an advertising profit out of the football strike. He plans to broadcast 18 "allstar" games between teams of striking N.F.L. players on a new network that he is launching. Cost for a 30-second commercial: $100,000. A spokesman for the venture, called Turner Network Television, said stations in 84 U.S. markets have agreed to show the games. Several N.F.L. teams, however, are suing to block them.

The bruising and costly strike could hardly come at a worse time for U.S. advertising firms, whose earnings are already badly depressed. A September study by the American Association of Advertising Agencies estimated that profits are at their lowest since 1946. Says Allen Rosenshine, president of Batten, Barton, Durstine & Osborn, the fifth largest American ad maker: "The agencies have been hurt by the recession. I don't think any clients feel that the economic turnaround is near. People are now talking about the second and third quarter of next year, and they're not committing their money yet."

The football strike may be no more than a nuisance alongside the recession, but it has managed to unite fans and giant companies in a common cause. All are now rooting for an end to the labor strife and a return to head knocking on the field. --By John Greenwald. Reported by Sue Raffety/New York and Paul A. Witteman/Detroit

With reporting by Sue Raffety, Paul A. Witteman

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