The leaves are changing and there’s a chill in the air. That means football, specifically professional football, and the NFL dominates the landscape each Sunday afternoon throughout the United States. Because of the sport’s popularity, the NFL has no trouble finding companies to advertise on their weekly broadcasts. That’s due to the fact that the sport continues to draw viewers to the television set on Sunday afternoons, sometimes enticing fans to watch games that begin at 1 p.m., 4:30 p.m. and 8 p.m. It’s a long time to engage viewers and an unequalled opportunity for advertisers.
Companies spent $2.616 billion on television advertising for NFL games during the 2008 season, which includes the playoffs and the Super Bowl. The advertisements are dominated by automobile and truck companies, as well as those for adult beverages. These commercials must be effective when purchased to run during NFL programming, since no one is really backing away from the trophy.
Here’s a look at some of the top advertisers and how they company’s stock has moved over the first month of the NFL season. Is it a trend or just coincidence? Decide for yourself.
Anheuser-Busch InBev is the largest advertiser on the broadcasts, spending $134.1 million. The company resumed trading on the NYSE in September for the first time since the merger 10 months earlier. It’s too early to see a trend, with BUD trading at a high of $47.91 and a low of $44.71. (The company will continue to trade on the Euronext Brussels exchange under the ABI symbol.)
MillerCoors, a merger of SABMiller and Molson Coors, spent $88.2 million last year. Molson Coors (TAP) shares have moved up since the season started, moving from $46.88 to a high of $49.88 and ending September at $48.68. SABMiller trades on the London Stock Exchange and ranged from L 140 to a high of $153.5 and closed at $150.9.
The U.S. Government spent $127.1 million on the NFL last year, but that isn’t just for military recruiting ads. That figure now includes the cost of ads purchased by General Motors, which the government now controls. GM stock is no longer being sold.
Other automotive companies are still investing. Toyota spent $107.8 million and Ford spent $101.7 million, with the Chrysler brands spending $63.7 million. Since Sept. 1, Toyota stock has declined from $86.30 to a close of $78.57 at the end of the month, while Ford shares remained in a shallow trading range from $7.77 to $6.75, closing at $7.21 on Sept. 30. Chrysler is a privately held company and does not trade on the exchanges.
Can you hear me now? Telecommunications also remains a big spender. Sprint Nextel pumped $82.1 million, Verizon spent $64.2 million, and AT&T spent $64 million. That will buy a lot of rollover minutes, but didn’t really have an impact on the stock. Sprint (S) traded in a range from $3.53 to $4.14 during the month, closing at $3.95. Verizon opened the month at $30.37 and finished the month at $30.27, although it channeled higher ($31.35) and lower ($30.58). AT&T moved the most, going from $25.89 to $26.99.
Southwest Airlines continues to be the nation’s leading source of budget air transportation. Southwest put $66.2 into NFL advertising in 2008 and gave viewers the freedom to move around the country. Southwest (LUV) stock moved higher to start the month like a quarterback against a porous defense, going from $7.86 to $10.13 before settling down in the $9.60 range. But, to be honest, credit for the increase probably should go more to the fact that oil prices lessened a bit early in the month.
Yum Brands spent $51.5 million with the NFL in an effort to drive viewers to Kentucky Fried Chicken, Pizza Hut, Taco Bell and Long John Silver’s. Yum has been in a slight downtrend, but has held pretty tough, ranging from $33.72 to open the month and closing at $33.76 to end the month.
There are many other regular advisers on NFL broadcasts that are seen on a weekly basis. Who can forget those clever Burger King ads with Darius Rucker? Who can forget those Campbell Chunky Soup ads, even though we’d certainly like to try? And with professional football, Visa is the credit card or debit card of choice since it takes you everywhere you want to be.
Don’t look for the trend to change. People continue to watch NFL football and the sport shows no signal of losing its stranglehold on the American public. In fact, this fall the league is taking a regular-season game to London and it has long been rumored that the NFL might eventually place a franchise in England and place the game on an international stage.
And while a game’s popularity may draw advertisers, who seek to hit their target audience, it doesn’t necessarily show up with bigger results on Wall Street. So it’s probably a good idea to enjoy the game, support your favorite team and patronize the sponsors. But when it comes to your stock portfolio, don’t make a purchase just because they’re affiliated with the NFL. You’ll probably end up disappointed.
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