NBC reportedly considering paying big price hike for Macy’s parade rights

NBC is working to shore up a renewal on the TV broadcast rights for the Macy’s Thanksgiving Day Parade at around triple the current yearly rate it’s paying now.

The network, which has broadcast the parade on TV since 1953, is reportedly paying around $20 million a year under its current agreement with Macy’s.

A new deal, which would take effect starting in 2025, is still being negotiated between the network and retailer but could raise that price tag to $30 million a year, according to Wall Street Journal sources.

Current discussions would keep the parade on NBC’s air and the Peacock streaming service for another 10 years, according to sources close to the discussions. The deal is also said to include NBC’s rights to the Macy’s July 4 fireworks events.

For this round of talks, Macy’s opted to have WME handle negotiations with NBC, instead of handling the deal directly, so the agency will presumably take a cut of whatever NBC ends up paying.

Such a hefty price hike may seem like something NBC would balk at, but the reported status of the current talks indicates how much NBC and other broadcasters see in live programming even as linear TV falters. 

In 2023, NBC brought in about $52 million in ad sales from its broadcast of the parade, with 30-second spots going for an average of around $865,000 each, according to the WSJ.

This year, the price is expected to pass an average of $900,000 per spot.

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NBC is likely to see its total profit on the parade sink a bit under the near deal thanks to the higher licensing cost plus increases in production costs. In the past, NBC budgeted around $4 million to produce the parade, but that cost has gone up to around $7 million, per the Wall Street Journal.

A significant factor in the increase is talent appearance fees, which can reach into six figures, including the televised entertainment used to supplement the parade itself, typically with live performances outside of Macy’s 34th Street store.

Despite it potentially bringing in lower profits, it appears NBC expects ad revenue to remain relatively stable into the coming years. 

The broadcast is also a key part of the network’s Thanksgiving Day programming lineup that also includes The National Dog Show and an NFL game, two other events that can still perform well in a streaming world, so even with the lower profits on the parade itself, shoring up the rest of the schedule with the popular, family-friendly and nostalgic parade broadcast is likely a good move.

The dog show is also reportedly very profitable for NBC and has lower production costs, even with its lower average ad spot of around $370,000.

Live events, including sports and special events such as the parade, have remained a strong point in what is otherwise a weakening linear TV market. Many broadcasters still see these types of events as more likely to draw live viewers — and therefore potentially see all that advertising it sells. 

The parade is also likely to continue to do well on social media thanks to the fact it’s visually interesting and, often, a zeitgeist of current culture trends. 

NBC recently snapped up the rights to “Rudolph the Red-Nosed Reindeer” and “Frosty the Snowman” from CBS to bolster its overall holiday offerings (both specials are slated to air in December 2024). 

CBS, meanwhile, has also removed its annual unofficial telecast of the Macy’s parade from its schedule. 

ABC, like CBS, has nearly no special Thanksgiving Day programming, though CBS does have a traditional Thanksgiving NFL matchup scheduled for that day (Fox is also scheduled to carry an NFL game Thanksgiving Day).

Macy’s is also facing its own set of challenges as it looks to a mix of store closures, increased ecommerce presence and focus on luxury and digital engagement strategies to continue to evolve away from its traditional department store model. The company has also faced takeover bids in recent years.

The parade was originally envisioned as a promotional vehicle for the department store. The event also brings in revenue for Macy’s through sponsored floats and balloons. 

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