ABC and The CW Follow Fox Onto Upfront Track

While Fox draws near finish line, two other nets make first moves

As Fox sprints toward the finish line, ABC and the CW have just exploded off the blocks, taking their first strides onto the upfront track.

Sources on Tuesday said that ABC began cutting its first deals late this afternoon. The CW has been active since late Tuesday morning.

ABC closed out the season ranked third among the demo, averaging a 2.5 rating/7 share, or 3.2 million viewers 18-49, in prime time. That marks a 7 percent decline from the 2009-10 campaign. ABC also finished third in overall deliveries, drawing an average nightly audience of 8.48 million viewers, per Nielsen.

While it may seem counterintuitive that broadcasters can command greater sums for airtime while their ratings decline, the TV marketplace adheres to basic supply-and-demand principles. As viewers drop off––some to cable networks, others to digital platforms (gaming, social media, streaming video)––they effectively remove supply. The fewer viewers in the demo, the fewer GRPs on offer, which leads to a higher cost to reach the remaining viewers in the sample.

With a seven percent decline in GRPs, and an estimated five percent uptick in demand, ABC should comfortably write CPM increases of at least 10 percent. Buyers cautioned that any assessment of how ABC will fare on pricing is premature, given that the networks are dealing from an lazily shuffled deck.

“They have the luxury of counting the house before they start dealing,” said one national TV buyer. “They ask to see the budgets ahead of time, while we really can only speak with any certainty to what our own clients have planned. It’s a lot easier for the networks to project who’s holding back money and who isn’t, and that’s a big advantage.”

While ABC as of late Tuesday afternoon had but a few deals in hand, analysts believe the network is poised to rake in at least $2.65 billion in upfront commitments, a gain of 10 percent versus last season’s bazaar. Along with the No. 1 comedy among adults 18-49––Modern Family averaged 4.94 million members of the demo in its sophomore run––ABC also puts up big numbers with Dancing with the Stars, Grey’s Anatomy, The Bachelor and Desperate Housewives.

That said, the two dramas are growing a little long in the tooth. Desperate Housewives bowed in October 2004, while Grey’s debuted as a mid-season replacement the following March. Together, the shows have been on the air for 305 episodes.

ABC has received high marks for some of its upcoming programming, as buyers said its Charlie’s Angels reboot has the potential to replicate the success of CBS’ newfangled Hawaii Five-0. Of course, the impulse to revisit classic TV series also has been rewarded with failure; witness NBC’s widely uncelebrated Bionic Woman (2007) and Knight Rider (2008-09) remakes.

The period piece Pan Am (Sundays at 10 p.m.) and the fish-out-of-water comedy Suburgatory (Wednesday, 8:30 p.m.) also piqued buyers’ interest, although many seemed to reserve the greatest anticipation for the mid-season entries Good Christian Belles and The River.

This year’s slate is the first to be introduced by former ABC Family president Paul Lee, who in July 2010 succeeded Steve McPherson as ABC’s entertainment president. The 2011-12 upfront is Geri Wang’s second as president of ABC Television’s ad sales and marketing (she succeeded Mike Shaw in February 2010). Wang has effectively steered ABC’s prime time sales for more than a decade.

Meanwhile, Fox is said to be well on its way to closing out the remainder of its upfront deals, writing low-double-digits CPM increases. Given its standing among viewers 18-49––Fox won the demo outright for the seventh consecutive season––the network is a perennial frontrunner.

With youth comes movie dollars. Given their particular needs (heavy Thursday buys, pinpoint target dates), movie studios tend to buy early and often. Celluloid accounted for much of the early rush on Fox’ stores, although retail appeared strong as well.

Along with its appeal to younger viewers, Fox deals a smaller supply of inventory and enjoys stewardship of one of the last remaining reach vehicles on TV that doesn’t involve blitz packages and mouth guards. During the most recent broadcast season, American Idol was the No. 2-rated program among the 18-49 set, averaging 9.76 million members of the demo, trailing only NBC’s Sunday Night Football (10.5 million).

Another game-changer for Fox is the Simon Cowell competition series, The X Factor, which should prove to be its strongest fall premiere in memory.

Fox was the first broadcaster to close out in last year’s bazaar, wrapping its final deal on June 3. The network commanded CPM hikes between 8.5 percent and 9 percent over ’09 pricing, an improvement that contributed to an overall volume increase of about 20 percent. All told, Fox nailed down some $1.98 billion in early commitments, a haul that could rise to as much as $2.11 billion, per analyst estimates.

Like Fox before it, the CW has been busy writing studio deals. Buyers estimated the net is also commanding double-digit increases, although the volume of inventory moved thus far has been limited. Last year, the CW finished its business shortly after Fox, boosting dollar volume by some 20 percent on gains in health and beauty, retail, wireless and autos.