‘Sold-Out’ Networks Still Adding To Upfront Numbers

The muddled television upfront marketplace was lagging last week, with cable still several weeks from the finish line, syndication barely started, and NBC, finally, just about done. But further confusing the already-convoluted picture of ad negotiations for next season’s inventory were reports from several broadcast network sources that certain media agencies were seeking and had committed to add-ons to the holds they had placed only a few weeks ago.

While tweaking upfront holds is not in itself unusual, what surprised many observers was the fact that agencies were returning to ABC, CBS and the WB to place more money down after those networks had proclaimed their upfront sales finished, while NBC was still in negotiations. This raised speculation that NBC may have lost even more money than was originally expected and reaffirmed the notion that the hard line taken by several cable networks regarding rate increases cost them additional upfront dollars.

“While it usually can happen while all the networks are still in negotiations,” said one network sales executive, “it is unusual to have all but one network done and have requests to add on to the networks that are finished.” The executive added that while it may not be enough additional dollars to dramatically change the upfront totals, “it does add up to millions.”

The fact that some of the broadcast networks were selling more inventory, when a few weeks ago they indicated they had sold as much as they wanted, had some media buyers wondering if the original sellout levels pronounced by the networks were to be believed.

“I thought the networks were sold out,” said one media agency executive. “Where is all this additional ad time coming from?”

Another media buyer said, “This doesn’t surprise me, because I believe [the broadcast networks] wrote less business originally than they had hoped to write.”

Added another agency executive: “It also wouldn’t surprise me if more money was moving away from NBC at the last minute. NBC is the highest priced network, and some agencies may not be getting the overall numbers they need to balance out their goals, so they are going back to the lower-priced networks.”

Another explanation could be that initial media buys with the broadcast networks were based on projected client budgets rather than actual budgets. Now that the actual budgets are coming in, buys are being adjusted upward a bit. “If a budget came across my desk right now that wanted me to expand broadcast spending, I would do it right away,” one buyer said. Another said client budgets are coming into the agencies later each year.

Whatever the reason, the add-ons certainly did not help NBC, which is expected to announce that its upfront total is between $1.9 billion and $2 billion, compared with $2.8 billion last year.

Despite NBC’s tough going in the upfront, NBC Universal chairman Bob Wright was able to joke about the network’s situation at an Advertising Educational Foundation event at which he accepted the AEF’s Media Award on behalf of the company. “We made history … a year ago with a record-breaking upfront. And this year we decided to make history again—it was just in the other direction,” he joked.

“But I have decided to retain ABC to handle the rest of our sales,” he added, referring to ABC’s solid performance during this year’s upfront.