Is This New Sport Responsible For NFL’s Ratings Slide?

The unlikely rise of a new professional sport is playing a role in the National Football League’s ongoing television ratings tumble, according to a new report.

Once a fledgling attraction, the eSports industry is now a legitimate challenger to traditional sports leagues – particularly among the millennial consumers already prone to “cord-cutting.” The pro gaming industry has embraced digital streaming, rather than television, as its primary method of reaching consumers.

A new survey conducted by market research company Newzoo found that 76% of eSports enthusiasts claim their interest in professional gaming interferes with the time they would have spent watching sports on television. That’s bad news for networks like ESPN (NYSE:DIS) and FOX (NASDAQ:FOXA), who spend tens of millions of dollars annually to secure the NFL’s television rights.

The NFL’s TV viewership was down 11% overall through the first month of the 2016 season and more than 20% on ESPN’s primetime “Monday Night Football” broadcasts. This year’s polarizing presidential race, ongoing player protests during the National Anthem and the rise of other entertainment options have all been posited as reasons for the ratings plunge.

"In 2000, during the campaign between George W. Bush and Al Gore, all four NFL broadcast partners suffered year-over-year declines -- Fox was down 4 percent, CBS was down 10 percent, ABC was down 7 percent and ESPN was down 11 percent," NFL media executives said earlier this month in a leaked memo obtained by ESPN.

While audiences for professional sports appear to be on the decline, eSports audience figures are expected to rise from 148 million enthusiasts in 2016 to 215 million enthusiasts in 2019, according to Newzoo’s research. Industry revenues are projected to spike from $493 million to $1.1 billion over the same period.

At present, it’s premature to cite eSports as a major drag on the business of major sports leagues. The NFL reportedly earned about $13 billion in revenue last season, and league officials are aiming to reach $25 billion in revenue by 2027. Moreover, 56% of the NFL’s viewers are older than 35, while nearly three-quarters of eSports fans are younger than 35.

Just 8.7 million fans consider themselves enthusiasts of both the NFL and eSports, according to the firm’s research. But that intersection should only increase if eSports continues its trajectory into the mainstream.