DANA POINT, Calif. -- Marketers such as American Honda Motor Co. are increasingly fed up with sky-high prices associated with sports marketing. They warn a "day of reckoning" is coming when Madison Avenue will just say "No" to hyper-expensive sports programming such as the Super Bowl.
As one of the last bastions of DVR-proof TV, the price of sports -- from the prices paid by marketers for sponsorships and 30-second ads to TV rights paid by media companies -- continues to climb. But it's rare for marketers to publicly declare they're reaching the end of their rope. And to threaten to move their ad dollars away from sports media and into cheaper social and digital marketing.
But that's what they did during one panel at the 2014 IMG World Congress of Sports presented by SportsBusiness Daily. When Terry Lefton, editor-at-large for SBJ, asked whether marketers had finally reached a tipping point with escalating sports prices, several marketers sounded off.
Tom Peyton, assistant VP-advertising for American Honda, noted that the auto-maker devotes 18% to 22% of its annual media budget to sports. And the company isn't getting more sports for its money. It's just paying higher and higher prices. The time is coming when resentful marketers like Honda could decide enough is enough.
"It could go very quickly. Yeah, the day of reckoning is soon," said Mr. Petyon.
Advertisers have no input when TV networks such as ESPN, Fox, NBC and CBS pay astronomical prices for live sports rights. But they ultimately end up paying through the nose due to increased ad rates that networks charge to try to make these expensive deals profitable.
Harry Arnett, senior VP-marketing for Callaway Golf, pointed to Fox/Fox Sports 1's successful bid to take over U.S. Open golf tournament TV rights from NBC/Golf Channel for 12 years starting in 2015. The terms of the deal were not disclosed. But Golf Digest reported Fox offered the United States Golf Association $20 million more a year than NBC/Golf Channel.
Said Mr. Arnett: "The golf viewer is not increasing. But we see rights fees are. So we're trying to figure out other ways to talk to consumers. That aren't necessarily reliant on them seeing a really good commercial."
Lily Knowles, VP-product marketing for Vizio, predicted "brands will start to challenge different sports organizations to get more creative."
How? Mr. Lefton speculated sports leagues and teams will try to justify higher prices by giving sponsors TV exposure in places that were mostly ad-free in the past, such as player sidelines and the field of play.