NFL ratings declines could impact CBS profits, Wall Street analyst says

Another Wall Street firm lowered its expectations for CBS shares this week amid ongoing ratings declines for the NFL’s television broadcasts.

NFL games are averaging roughly 14 million viewers per telecast through Week 6 of the 2017 season. That total marks a 7.5% decline compared to last season, when games averaged roughly 16.3 million viewers, according to Nielsen. The ratings decline is unfolding amid widespread debate about ongoing national anthem protests by NFL players.

While Credit Suisse maintains a positive “outperform” rating for CBS shares, analyst Omar Sheikh trimmed earnings per share estimates for CBS 5% to $1.08, short of Wall Street’s projections. Sheikh attributed to lowered projection to concerns about the network’s NFL coverage.

“We expect third-quarter network advertising to decline 3% (previously +1%), driven by soft ratings for both the summer schedule and for the start of the NFL season,” Sheikh wrote in a note to investors, according to Deadline.

While an ongoing war of words between President Donald Trump and NFL players has drawn renewed attention to the league’s television ratings, declining numbers have been a source of concern for both league officials and networks since at least 2016. Total viewership dropped an average of 8% last season, a decline that NFL executives attributed in part to unprecedented coverage of the 2016 presidential election.

Last month, JPMorgan Chase analyst Shawn Quigg urged investors to short CBS shares due to the declining TV ratings. Quigg’s note came just days after dozens of NFL players opted to kneel during the anthem after Trump called on NFL owners to fire any player who protests.

“NFL-related revenue is not trivial to CBS, and any decline in NFL viewership related to the national anthem debate may negatively affect future results. We view this weekend’s viewership results as likely a cleaner proxy in determining whether the Anthem debate may be a larger issue for the NFL, and CBS, or not,” Quigg wrote in a note.