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ESPN Reportedly Owes Advertisers A Lot Of Money Because The CFB Playoff Ratings Were So Bad

ESPN's logo in red and white.

The College Football Playoff being on New Year's Eve is reportedly costing ESPN millions of dollars. 

According to a report by Broadcasting & Cable, the network owes advertisers roughly $20 million in makegoods because the ratings for the two semifinal games were much lower than estimated. 

Neither the Orange Bowl between Clemson and Oklahoma nor the Cotton Bowl between Alabama and Michigan State performed well on TV. The ratings suffered a massive drop from last season, recording scores nearly 35 percent lower than the previous playoff. 

">January 8, 2016

From the report:

Despite the efforts of the College Football Playoff committee and some media outlets downplaying the financial hit ESPN took by being forced to televise the two national championship semi-final games on New Year’s Eve, media buyers say the network owes upwards of $20 million in ad makegoods for ratings shortfalls for the two games.

ESPN may have gotten a bit greedy when setting its ratings estimates and offering higher guarantee levels to advertisers for the two games, knowing audiences might not flock to their TV sets, despite the optimism of the CFP committee. However, advertisers are concerned about next season’s potential audience levels for the games, which will also be televised on New Year’s Eve. Even if the ratings guarantees by ESPN are set lower, advertisers would prefer the games be moved to New Year’s Day or even on consecutive primetime nights, exclusive of New Year’s Eve, when more people would likely watch.

You can read the rest of the report here. It goes into much more detail about how ESPN can pay the advertisers and what can be done to fix the College Football Playoff's TV ratings going forward.