Welcome to economics 101 for business reporters. Reuters told us today that: "NBC has sold all but two ad spots for its Super Bowl broadcast, despite the pressures of economic recession." Okay, what does this mean? Is NBC doing well with its ad sales because 4 days before the big game they have managed to offload all but two spots, "despite pressures of economic recession?" Suppose NBC had to sell half its spots for $10 a minute, would that still be good for the networks profits? This one requires just a little commonsense. NBC will be showing the Superbowl on Sunday and it has already set aside a certain amount of time for commercial breaks. It will eventually sell all these spots, because the marginal cost to NBC of running an ad at this point is close to zero. The real issue is the price that they are able to sell the ads for. The Reuters piece provides no information on the prices paid for the ads, therefore readers can have no idea as to whether NBC has been successful with its Superbowl ad sales.
--Dean Baker
