The Broadcast Market Is Moving

NBC, CBS write upfront deals, many buy C7

Three of the major broadcast networks have started to write upfront deals—NBC, CBS and Fox are all said to be signing contracts for inventory in the 2014-15 season. NBC is seeking—and apparently getting—8 percent increases for some of its broadcast prime-time inventory, according to multiple industry sources, while Fox is looking for lesser increases than it sought in 2013-14, when it earned gains in the 5-7 percent range.

Fox has one advantage in its corner this year: it has gotten GroupM to buy into C7 deals—albeit at a discount. (This seems to fit with the information about lower increases at the News Corp broadcaster, and another tidbit: some of the Fox deals are definitely guaranteed against C7 ratings.) No one close to the negotiations would comment on the size of CBS' deals, but it is said to be selling C7, too, as is NBC.

To understand the pacts at both NBC and Fox, a little background is needed: under ad sales head Linda Yaccarino, NBCUniversal is now a single entity, and it can leverage stronger networks to support weaker ones, as well as information gathered by parent company Comcast's cable boxes (which will be in nearly one-third of the nation's cable households if and when its purchase of Time Warner Cable goes through).

The latter advantage has given the network a product it's calling NBCU+ Powered by Comcast, which provides purchasing data matched up to ad deliveries à la third-party researchers like the recently bought-out PrecisionDemand and others such as SimulMedia. Sources say that NBCU isn't offering this tool widely, using it instead to reward big spenders and encourage broad buying across the portfolio.

NBCU also has the Super Bowl next year, and is said to be asking for $4.5 million per spot (a major increase over last year's $4 million) along with an investment of equal size across the rest of the company's assets—so that's an effective $9 million per, if you want a Big Game ad.

Fox's deal for C7 with GroupM (which appears to be writing at least some of today's deals) is shrewd in that it allows the company to take lower rates than it might otherwise seek in part because a longer lead time makes the ratings pie larger. And they need more GRPs to sell, especially with the decline of American Idol and the abrupt departure of Kevin Reilly, who greenlit the new primetime slate. Sources say that the cable world isn't thrilled about the switchover—it inflates the broadcast GRP pool—but it's a good way for a network like Fox to make up for viewership shortfall, and it's a way for CBS and NBC to press their advantages, and to get money for impressions they've been giving away for free.

Interestingly, among the dealmakers at Fox are movie studios. Presumably those clients aren't the ones buying C7 (Thursday's trailer timeshifted to Monday night probably isn't something, say, Paramount is interested in paying for), but they are definitely in the mix.