Fox Kick-Starts the 2011-12 Upfront Market

Net seeing low-double-digit CPM hikes on movies, retail

With hours to go before the start of Memorial Day Weekend, the 2011-12 upfront market roared to life.

Sources said that Fox was first out of the gate, having finalized deals with at least two of the top media agencies. Early word has the network focused on landing movie dollars, which are a particularly good fit given its standing among younger viewers.

Retail dollars are also coming in.

Fox will finish the 2010-11 campaign ranked No. 1 among adults 18-49. Season to date, the broadcaster has notched a 3.5 rating in the demo, down about 4.8 percent from the previous season average.

With a 5 percent decline in GRPs, and what appears to be a 7 percent or 8 percent increase in demand, it stands to reason that Fox is writing CPM increases of at least 11 percent. Sources eyeball the rate in the low-double digits.

Fox was first to cash in last year, wrapping its final piece of business on June 3. Various industry sources estimated that Fox had 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.

Concurrent with last year’s upfront business, Fox moved an astounding 80 percent of its Super Bowl inventory. This time around, the network has already sold a healthy portion of its regular-season NFL avails and is believed to have wrapped up a good deal of auto business in both its Fox NFL Sunday pregame show and within its live 1 p.m. and 4:15 p.m. broadcasts.

All told, Fox is believed to have brought in $1.98 billion in prime-time commitments a year ago, making it the most lucrative upfront in its 24-year history. Fox moved roughly 80 percent of its inventory, slightly above historical sell-through numbers.

Although all five broadcast outlets have registered budgets in hand, sources say that Fox was the only network to move any upfront inventory thus far. Given its lighter load—two hours of prime-time programming from Monday-Saturday and three hours on Sunday—Fox tends to be fleet on its feet when it deals in the upfront.

Last year, the similarly lithe CW wrapped on June 4.

While analysts have made all sorts of predictions about the strength of the market based on scatter pricing, until the budgets were registered, the numbers put forth were merely speculative. For example, UBS analyst John Janedis said he believed that Fox, CBS, and ABC would look for CPM increases “of 12 percent to 16 percent vs. last year’s upfront.”

Barclays analyst Anthony DiClemente was more conservative in his assessment, eyeing CPM hikes of 12 percent for CBS and 10 percent for ABC and Fox. DiClemente also saw lagging NBC earning 8 percent increases. 

Deals were expected to heat up on Tuesday morning. Final budgets should hit cable next week. When the dust settles (likely in mid-June), the national TV upfront haul could add up to as much as $18 billion.

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