NFL sponsors reassess league partnerships: multiple long-term agreements changed in 2022

Despite the growing trend of cord-cutting in cable television, football remains a major pillar of TV viewership, and the National Football League (NFL) continues to rank among the most profitable sports leagues globally. However, entering 2022, the NFL encountered the termination or adjustment of several long-term sponsorship and advertising partnerships, a phenomenon that has drawn industry attention.

With a history spanning over a century, the NFL has long been a mainstay in sports marketing. But in recent years, the league has faced multiple challenges, including several scandals and pandemic-induced viewership declines. In early 2022, the NFL appeared to be heading for a banner year: Super Bowl LVI attracted an average of 112.3 million viewers, the highest viewership in five years. However, the good times did not last long. Within just a few weeks of the second quarter, Pizza Hut ended its partnership with the league after only a few years, with Little Caesars quickly stepping in as the official sponsor. Anheuser-Busch InBev continued as the NFL's official beer and hard seltzer sponsor but no longer retained exclusive rights to alcohol advertising during the Super Bowl, allowing competitors like Molson Coors to air ads during the Super Bowl for the first time in 33 years. This change came a year after Diageo became the NFL's first official spirits sponsor, marking the first time Anheuser-Busch InBev shared NFL alcohol sponsorship with another company. Additionally, Pepsi ended its sponsorship of the Super Bowl halftime show after ten years but continues to maintain a close partnership with the league.

"The changes in NFL sponsorships this year are indeed noteworthy," said Gretchen Walsh, Chief Client Officer at McCann, in an email to Marketing Dive. "It's likely that brands facing supply chain issues or impacted by the pandemic have re-evaluated the value and effectiveness of their traditional sponsorships."

Beyond supply chain and pandemic factors, audience fragmentation and broader cultural shifts are also influencing the perceived value of NFL sponsorships.

The Value of the Dollar

Although Super Bowl LVI was the most-watched since 2017 when the New England Patriots defeated the Atlanta Falcons (113.7 million viewers), viewership among adults aged 18-49 has been declining since 2011. In 2011, 52.5 million people in that demographic watched the Super Bowl, but by 2021, that number had dropped to 34.3 million.

The decline in Super Bowl viewership could be interpreted as a decrease in football's appeal among younger people. However, between 2017 and 2020, viewership for Sunday night games in this key demographic remained relatively stable at 7.9 million, dropping to 6.4 million in 2020. This decline may stem from the pandemic's impact on sports schedules—multiple events were held simultaneously, giving viewers more live events to choose from.

Even as the league returns to normalcy, the issue of audience fragmentation persists. Consumers now have more choices than ever, and major live sporting events no longer serve as cultural focal points as they once did. Coupled with the easy accessibility of highlights and real-time updates, viewers can engage without watching the live broadcast.

The broadcast structure of football games may also exacerbate viewer attrition. An average game lasts 3 hours and 12 minutes, but the ball is actually in play for only 11 minutes, with an average offensive play lasting just 4 seconds. Games feature an average of 20 commercial breaks airing over 100 ads, which may lead viewers to frequently check their phones.

All of this points to the fact that advertisers need a diversified media strategy. Anheuser-Busch InBev has stated it is exploring ways to extend its reach beyond the football season.

"As our strategic approach evolves, starting in 2023, Anheuser-Busch InBev will adjust its advertising approach for the Super Bowl and will no longer seek exclusivity for alcohol advertising in the national broadcast," said Spencer Gordon, Vice President of Consumer Connections at Anheuser-Busch InBev, in a statement emailed to Marketing Dive. "This shift allows us to rebalance media investments across key moments throughout the year, including the football season and the summer selling season, thereby driving our ambition to lead future growth."

Simon Wardle, Chief Strategy Officer at sports marketing firm Octagon Worldwide, believes that Anheuser-Busch InBev's decision, after maintaining a unique contract with the league for over 30 years, was not made overnight. "I think Anheuser-Busch InBev may have realized after 30 years that the premium they were paying, along with continually rising advertising rates, especially during the Super Bowl, may have made the exclusivity premium no longer worth it, given the escalating price of 30-second Super Bowl ads."

However, audience fragmentation does not mean the Super Bowl is no longer a worthwhile investment. The key lies in the brand's strategy and the returns it expects. If the goal is to generate buzz and excitement, the Super Bowl remains one of the best platforms for driving word-of-mouth.

A study from the University of Minnesota shows that advertisers can see a 16% increase in word-of-mouth (both online and offline) within a month after the game, and 22% within the first week. Online word-of-mouth surges by 68% on Super Bowl Sunday itself, but this significant effect lasts only a few days.

"Previous research has found that, relatively speaking, there is no significant sales lift following Super Bowl ads... but we still see that these ads increase word-of-mouth and trigger an immediate surge in online searches," said Dr. Linli Xu, study author and Assistant Professor at the Carlson School of Management, University of Minnesota. "So, if a company truly wants to increase brand awareness or stay connected with customers, what is the best way to reach hundreds of millions of people at once? I think that's what attracts many advertisers to the Super Bowl."

Moreover, unlike most television programs, Super Bowl ads themselves are a reason to watch, and many brands take the opportunity to debut new commercials.

"When you consider all the extra noise surrounding the Super Bowl, you not only get massive eyeballs, but it's unique—it's the only sports program where the ads are part of the show, arguably the only one all year," said Octagon's Wardle.

Traditional Media Steps Back

The NFL, and the sports world at large, has been slow to embrace the digital revolution. However, the 2022 season may mark a turning point for the league. Recently, Amazon became the exclusive rights holder for Thursday Night Football, and the NFL also launched its own streaming service, offering all out-of-market preseason games and mobile live streaming of all local and prime-time regular-season games.

"We're seeing live sports appear across all digital platforms, including social media and streaming. The recent NFL 'reshuffle' I think is, in a way, the league acknowledging and accepting that even America's biggest and most popular sport must break from traditional behavior and evolve to remain culturally relevant and reach all demographics," said Jimmy Spano, Senior Vice President and Group Director at Carat USA, in a statement to Marketing Dive.

Ultimately, the way fans consume football has changed, and brands need to change with it. When viewers' eyes are not on the television, how to engage them becomes crucial.

"Engagement is very important... the so-called 'second-screen behavior,' as we know, nearly 70% of viewers use another device while watching TV," Xu said. "What they are most likely to do during commercial breaks is check their phones, either to search for the product they just saw advertised or to discuss the program that just aired."

Providing viewers with incentives to engage with the game may be key to keeping them watching. Between 2018 and 2021, the United States saw a wave of sports betting legalization, and now more than half of the country has legalized sports betting in some form. New York Giants co-owner Jonathan Tisch has stated that legal sports betting directly contributed to viewership increases in 2019. In early December 2019, after several laws took effect, overall viewership grew 5% compared to 2018, with digital viewership up 49% year-over-year.

Fantasy football also influences viewership. As of 2021, approximately 40 million people in the U.S. and 20 million overseas participate in fantasy football to varying degrees. Its popularity prompted the NFL to launch the dedicated RedZone channel. Debuting in 2009, the channel provides live look-ins of all games on Sundays, offering fantasy football fans the information needed to make accurate decisions while delivering fast-paced coverage of out-of-market games.

Channels like RedZone, which cater to data-driven younger fans, are a natural choice for advertisers, especially as they chase the key 18-49 demographic.

Although audience fragmentation is a major factor in the loss of younger viewers, the NFL remains king in ratings, making it a key partner for advertisers to reach consumers on cable television.

"Based on this year's upfront, the NFL is once again the most sought-after property in the market, with strong demand across categories," Spano said.

Despite audience fragmentation and shifting consumption habits, the NFL will remain a force in American advertising. However, the benefits that partnering with the league can bring to advertisers will depend on the advertisers themselves.

"One of the NFL's advantages over other sports is people's love of the game," Wardle said. "No matter which two teams are playing on Thursday, Sunday, or Monday night, people tend to tune in simply because it's the NFL."