How TV Got Sold

The art of selling in the upfront's early years

When compared to the spectacle of the old William Morris bash, today’s upfront soirees put one in mind of wartime austerity. Lobster tail has given way to the ubiquitous (and stomach-churning) frivolity that is chicken satay, and on the rare occasion that vendors trot out some desirable swag, a third-tier oddity like Andy Dick will ruin the fun for everyone else. (In 2005, Dick rolled up to the Lucky/Cargo hospitality suite at the Ritz-Carlton where he essentially made off with every high-end premium he could carry.)

Given that each upfront is essentially a narrative—market forces determine the teller of the tale—a little conflict between the protagonists is often unavoidable. The players air their grievances in the trades; in recent years, we’ve seen buyers carp about currency and sellers boast about the fat price hikes they were going to land.

“The sort of public engagement, where you see someone like [CBS Corp. CEO] Les [Moonves] telling people what kind of pricing he’s going to get in the upfront, that wasn’t really done years ago,” Semsky says. “Les is one of the great showmen. And I get the feeling he’s not talking to the clients so much as he’s talking to Wall Street. And Sumner [Redstone].”

Of course, back in the era when you could write a huge chunk of business on a cocktail napkin, there was no need to go out and bang your drum in the streets.

“One year at CBS, we had a goal of $1.6 billion at, say, 8 percent CPM increases and Magna had the most money out there,” recalls Joe Abruzzese, president, advertising sales, Discovery Communications. Abruzzese sold time for CBS for 22 years before making the unprecedented leap to Discovery in late 2002. At the time, some rivals questioned the notion of leaving the major leagues of broadcast for the bush league; then, as now, Discovery’s Dapper Don was right on the money. (Perhaps the most respected sales chief in the game, Abruzzese is also justly renowned for his exquisite taste in custom, hand-tailored suits. Put it this way: Abruzzese pulled in $1.25 billion in sales revenue last year, or roughly half of what he must pay for his dry cleaning.)

“So [former Magna Global chairman and CEO] Billy Cella called me up,” continues Abruzzese, “and I said, ‘Billy, you’re on my schedule. We’re going to a black-tie event.’ So, he had his forms, I had mine, and he said, ‘Suppose we did x amount with Johnson & Johnson and x amount with Microsoft,’ and we laid out $500 million in media at a cigar bar. Closed the deal that night.”

If buyers and sellers were once thick as thieves, the constant pressure to up the ante during the three-network era began to have a wearying effect on the clients. “You’d have years where the network guys were asking for mid-teen pricing increases and yet the mortality rate of the shows they were selling kept going up,” says Goldstein. “It’s the reality of the business—there are always more failures than hits. [In the early ’80s] there was an opportunity to spread the money around a little on CNN and TBS.”

Cable wouldn’t start wetting its beak in the broadcast feeder in any significant way until the turn of the century when a rush to invest in original programming transformed the space from a sleepy backwater haunted by reruns of Too Close for Comfort and bad movies to a platform for some seriously good content. In developing franchises such as Mad Men (AMC) and The Shield (FX), ad-supported cable networks demonstrated they could produce HBO-quality series, and in doing so, took a chomp out of the Big Four. As the shows got smarter and more engaging, some of the money started falling cable’s way.

By 2005, cable executives began portraying the broadcast networks as a place for derivative, soulless content. Broadcast was for your sainted mother out in Staten Island; cable was for the urban sophisticate. By the middle of the second Dubya administration, cable had become so disruptive to the old way of doing business that ESPN and Turner Broadcasting decided to jump the line, bum rushing their way into the week traditionally reserved for the network upfront shows.

The extent of the upheaval can be seen on the balance sheet. As late as the 1999-2000 bazaar, cable was still only taking in half the dollars booked by the Big Four. The new millennium saw the cable bucks trending up along a hockey stick graph, and while broadcast keeps adding to its pile, this year will mark the first in which the upstarts reach parity with the establishment guys.

Still, on the eve of the 2010-11 upfront, the broadcast network sellers are anticipating a real lollapalooza. Barclays Capital analyst Anthony DiClemente anticipates that the Big Four are likely to increase their upfront commitments by 7.5 percent year over year to $9.23 billion, beating the previous high-water mark of $8.8 billion in the 2008-09 bazaar. With the cable networks expected to book an equal amount of early commitments, the overall take for this year’s spring fling could add up to some $18.5 billion.

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