As is true with audience trends, the direction of evening newscast economics in recent years has not been good, but 2003 may have bucked that trend as the economy showed some strengthening.
Still, say industry insiders, the nightly newscasts remain profitable and solid part of the network's bottom line.
Unfortunately, there are little or no public data on the operating profitability of news divisions alone. To a large extent, in trying to get a handle on finances, we are limited to looking at estimates of revenues. And even here accounting practices and bundling of ad sales make the picture fuzzy.
From 1999 to 2002, the three networks together have seen their evening advertising revenues drop 6 percent, according to data from TNS Media Intelligence, a market research firm. Most of this decline occurred in 2000 and 2001, as a slumping economy resulted in a shrinking advertising market.
But the drop cannot all be tied to a sluggish economy. It began before the economy sagged and at some points occurred even while ratings had seen an up-tick.
Both the NBC "Nightly News" and the ABC "World News Tonight" took in considerably more money in advertising revenues in 1999 than they did in 2002. In four years, NBC's revenues fell off 13 percent and ABC's fell 9 percent. These two programs saw big drops in 2001, around $14 million each, as the advertising downturn rippled across all media.5 [1] But this is not entirely attributable to ratings, which were rising for both NBC and ABC in 2000. ABC saw a big ratings jump in 2001 as the revenues fell.6 [2] The advertising slump that began in 2000 with the sharp decline in the stock market and the popping of the dot.com bubble is also a factor here, industry professionals add, making a difficult situation look somewhat worse.
At CBS, which has the least-watched nightly news broadcast, ad revenues improved: The CBS "Evening News" experienced an 8 percent jump in advertising revenues from 1999 to 2002. In 2002, CBS eked its way into the second-place revenue spot, even while it was the clear third-place finisher in ratings.7 [3]
Partial 2003 data suggest the trend may be changing. The networks saw strong advertising revenues for the first eight months of 2003 and appeared to be on course to show significant gains over 2002.8 [4] By August of 2003 all the evening news show had taken in more than $100 million in revenues.9 [5]
According to the TNS data tracking advertiser spending, the NBC "Nightly News" with Tom Brokaw had taken in revenues of more than $110 million through August. The program was thus projected to have its best year since 2000, with estimated revenues of $165 million. CBS, which had taken in $106 million by August, looked ready to have its best year since before 1999 ($159 million in revenue). And ABC, with more $100 million in its coffers, was on track to beat its 2001 results (with $150 million in revenue).
These revenue numbers, however, need to be viewed carefully, industry insiders say. The networks, particularly NBC and ABC, are selling ads in packages. So an NBC ad buy could include, for instance, the network nightly news, CNBC and MSNBC, plus online deals with MSNBC.com. That gives networks leeway in terms of how they assign the revenues to different programs. It is possible that the revenue data, insiders say, are comparing apples and oranges.
Indeed, some network news professionals say the bundling of ad sales has become an important factor in the race for No. 1 in evening news. If you are on top, you have more leverage to bundle ad sales, to tell advertisers that if they want preferred spots on the evening news, they may be forced to buy time in other programs.
According to internal network sales data provided to the Project for Excellence in Journalism by a confidential source, in fact, these public projections of 2003 revenues are close but not entirely accurate. This internal network accounting for 2003 shows the No. 1 rated NBC "Nightly News" topping $200 million in ad sales. The No. 2 rated ABC "World News Tonight" was second at more $170 million and No. 3 CBS "Evening News" took in about $133 million. It is difficult to assess which numbers are more accurate, the internal or the public estimates. Executives say the bundling of ad sales make all the estimates somewhat softer, or more a matter of accounting judgment, than they once were.
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1999 to 2003*
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Source: TNS Media Intelligence/CMR unpublished data, www.tnsmi-cmr.com
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* 2003 revenue is PEJ projection based on Jan.-Aug. data.
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