Many have warned that the NFL’s anthem-protests were going to come back to haunt them. Now it seems that the economic consequences of their decisions have become even more problematic than just low ratings.
CBS has been floundering on the stock market. As analysts cut their estimates for third-quarter earnings in light of recent information, many top financial institutions are citing bad NFL ratings as the main reason, according to CNBC.
With Credit Suisse cutting its third-quarter EPS estimates on CBS by five percent, declining NFL television ratings are cited as the primary cause of these disappointing quarterly results.
“We expect third-quarter network advertising to decline 3 percent (previously +1 percent), driven by soft ratings for both the summer schedule and for the start of the NFL season,” said Credit Suisse analyst Omar Sheikh. “With only one of the three content licensing deals we expected for the second half announced in the third quarter, we also expect content licensing revenue growth to be skewed to the fourth quarter.”
The analyst was optimistic concerning CBS’ shares, which remained at $75 – 32 percent higher from Friday’s close. Sheikh did, however, cut his third-quarter estimate to $1.08, which is further below Wall Street’s consensus of $1.12.
Overall, CBS stock has fallen nearly 11 percent since January and tumbled a further three percent this past month.
Credit Suisse isn’t the only investment firm to come to this conclusion. Analysts from JP Morgan have shared with their clients that the poor NFL ratings are the root cause as well. “Ratings for the NFL decreased 6% y/y in aggregate for Week 6, with the decline driven by lower viewership for Sunday daytime windows. The late afternoon national game on CBS featuring the Steelers and Chiefs saw a -26% lower audience relative to the same window on FOX the prior year,” media analyst Alexia Quadrani wrote Wednesday.
He did share some other explanations besides the anthem protests, including theories that “the league has made it too easy for young fans to stream condensed versions of games,” or that significant injuries to top players are inhibiting ratings as well.
President Trump has instead claimed that NFL television ratings are down due to the anthem-kneeling controversy, tweeting that “…NFL attendance and ratings are WAY DOWN. Boring games yes, but many stay away because they love our country. League should back US.”
Nor is Trump’s opinion based on speculation. A Rasmussen poll has shown that 34 percent of NFL fans say they’re less likely to watch an NFL game specifically due to the growing number of anthem protests that were plaguing the league.
The NFL is finally facing serious consequences. Do they deserve it?
Another Yahoo survey said that as much as 44 percent of Americans have been turning off their televisions over the protests. It’s a trend that’s been affecting live game attendance as well, with the NFL also struggling to fill in seats at arenas.
Despite the fact that NFL commissioner Roger Goodell has issued a memo to all teams calling for an end to the protests, the damage has already been done to the NFL’s reputation, and that reputation isn’t it likely to be restored anytime soon. It looks like the NFL and CBS will have to get used to their newfound financial outlook.