Sports TV Trends – Wall St. Report - Pivotal Research

As is well-known, live sports viewing has held up despite ratings declines, and is increasingly important for national network owners. Over the past decade, live+same-day viewing hours of sports is actually up by nearly 7% in total, although half of this was attributable to the inclusion of summer Olympics in 2016 vs. winter Olympics in 2006. Over the past year, all nationally rated sports viewing on a live+same-day basis (and on a live+7 basis) was up by 5% during 2016 over 2015. Excluding Olympics viewing was down by -3%. For reference, all other nationally rated viewing hours fell -1% during 2016 vs. 2015. By network group during 2016, Disney properties, primarily ESPN, accounted for 32% of viewing. NBCU properties generated 20%, with more than a third due to Olympics. Fox networks accounted for 16%, while CBS represented 13%.

Key observations from our analysis through week 17 of the calendar year (ending Sunday April 23), for which live+same-day data became available on Tuesday, follow:

• YTD viewing of sports TV on national media properties is flat. For the 17^th week, sports viewing was down by -7% year-over-year.

• Disney networks' sports viewing, which accounted for 35% of YTD viewing, is down by -4%. For the week, during which it accounted for 33% of viewing, Disney networks' sports viewing fell -10%. NBCU-owned properties accounted for 16% of viewing during the week and 12% YTD, fell -7% on the week and -10% YTD. At Fox-owned networks, which represented 8% for the week and 21% YTD, viewing was down -27% on the week, but up +55% YTD primarily because of Super Bowl (or up by around +13% excluding the game week in both years). At CBS, viewing accounted for 3% of total national sports during the week and 14% YTD. For the week viewing was down -15%. YTD viewing of sports on CBS is down by -3% excluding the Super Bowl week in both this and last year.

• During the most recent week, basketball -- now solely represented by the NBA's playoffs as the college season has wound down -- was dominant, accounting for 43% of the total, up significantly vs. recent years. Total viewing of all the sport was +5% for the week, and +8% YTD. Looking only at the NBA, viewing is up +2% YTD.

• Sports Commentaries (e.g. ESPN's SportsCenter) was next-most important, with a 16% program-viewing share for the week, down from 18% last year. For the week, related viewing was down -18%, below the -12% YTD trend. Disney-owned properties including ESPN -- by far the biggest player -- saw a -21% decline for the week, part of a -16% decline YTD for their networks. Commentaries continue to diminish in importance, with consumption falling by -32% from the 2010 peak. On a full year basis, commentaries accounted for 29% of sports viewing during 2016, down from 33% in 2010 and 35% in 2012.

• Among other sports, Soccer accounted for 8% of the sports marketplace with 36.7 million person-viewing hours. Despite outperforming Baseball and Hockey, no individual soccer league broke 5% of the total sports market. Hockey itself represented 7% of viewing (nearly all due to the NHL), although viewing levels were down significantly vs. the year-ago period with faster completion of the post-season's first round series' in the Western Conference, leading to far fewer games played. Baseball followed as the next-most important sport, with 6% of viewing (nearly all of which was MLB).

FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: TV Update 4-26-17-sports.pdf

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