Broadcast Network Upfront to End Down 22 Percent


“We anticipate scatter [for the upcoming TV season] will be stronger than upfront prices,” Moonves said.

Why then did the media agencies not spend more in the upfront if the networks are expecting the economy to turn around during the upcoming TV season? “Advertisers are not buying that far in advance,” Moonves said, pointing out that some upfront buying can take place 15 months before the advertising is schedule to air. “They are buying closer to air time.”

NBC was the first network to get some upfront deals done in mid-June followed by Fox. Both ABC and CBS took a harder line with media buyers, choosing to play a waiting game and call the buyers’ bluff. But it seems like early prime-time deals by NBC at -7 CPM rates held up as the low point of the market. Fox began doing deals a low single-digits in the -1 to -3 percent range, and eventually CBS jumped in and was doing deals in that same pricing neighborhood.

Sources said ABC continued to take a harder line, and several media buying agencies bypassed ABC and wrote business with The CW at -2 to -3 percent CPM rates. CW is usually the last network the agencies negotiate with. Media buyers said ABC will be the last network to complete upfront selling.

“The networks that were more flexible were the networks that were able to do earlier deals,” said one source familiar with the negotiations. “The networks that took a harder line might have gotten stung a bit.”

NBC, which has done early deals in the past several upfronts, did so again. Sources familiar with the network's negotiations said overall, combining NBC Universal’s broadcast, cable and digital properties, including all dayparts, the company took in just south of the $4 billion it took in last year.

“It seems like NBC Universal overall wound up having a much stronger hand to play than the media agencies thought they did,” said one industry source.

Sources said NBC sold the new five night-a-week prime time Jay Leno Show as part of packages with other shows rather than selling it separately and worked out adjustments on its rates to fit into those packages. The network also did several product integration deals in the show.

NBC, sources project, sold about 10 percent less inventory than it did last year in prime time, selling about 70 percent of its available units. The CW, sources sold about 65 percent of its prime-time ad inventory this year, compared to 77 percent last year.

ABC  CBS and Fox, which sold about 75-80 percent of their prime time in the upfront last year, were each said to have cut back between 10 to 15 percent this year.

Related: CBS Nearing End of Upfront Sales

Related: CBS' Q2 Profit Drops 96 Percent