Fox Makes Headway as First Week of Upfront Deals Ends

Network sacrifices bigger CPM hikes for dollar volume

After jumping out to an early start on Wednesday, Fox steadily has been closing its 2013-14 upfront deals, writing business at slightly less inflated rates than in recent years.

According to media buyers, Fox is securing CPM increases between 5 percent and 7 percent above last year’s rates. That’s a bit of a dip when compared to Fox’s 8 percent bump in the 2012-13 bazaar and an 11 percent average premium in the previous year.

Given that it has less inventory to sell than in upfronts past (Fox closed out the broadcast season down 22 percent in the 18-49 demo), small compromises on price should yield more favorable outcome in overall dollar volume.

For all that, there is only so much Fox can do to pump up its early commitments for the coming season. Fox last year booked some $2.2 billion in advance business, and analysts believe that the GRPs squeeze could cost the network upwards of $300 million.

Of course, that’s why the scatter market is often a lifesaver. With the general economy on the mend and what is expected to be a robust automotive market in the wings, Fox and other networks may land much higher price increases outside of the upfront.

Sources said that Fox is sufficiently far enough along that it could be completely finished with its upfront bartering by the middle of next week. Last year, it took two weeks from the time Fox started moving inventory for it to cross the finish line.

ABC has completed its business with a few major agencies, cutting deals at slightly more favorable rates than a year ago, when it lifted CPMs by 7 percent. Also brokering the odd deal is The CW, which last June was the first broadcaster to wrap its upfront sales.

Ratings champ CBS is in talks with several agencies, but has of yet not rushed to cut any deals. “We are in active negotiations with major agencies across the industry,” a CBS spokesperson said late Friday afternoon. “We look forward to another successful upfront where we are confident we will lead in both volume and pricing.”

CBS closed out the season with an average nightly draw of 11.9 million viewers, beating runner-up ABC by a factor of 4 million. In doing so, CBS boasted the largest margin of victory in 24 years.

The network also cleaned up in the dollar demos, averaging a 2.9 among adults 18-49 and a 3.8 with the 25-54 set.

Because it has the luxury of the most ratings points to sell, the most stable prime-time schedule and a roster of many of the biggest hits on TV (including its late-Sunday afternoon NFL games), CBS can essentially let the market meet it on its own terms. Two weeks before the network unveiled its upfront slate at Carnegie Hall, CBS Corp. president and CEO Les Moonves said that his sales team would look to secure rate hikes in the “high single- to low double-digit” range.

NBC is also in talks with buyers, although the degree of difficulty in piecing together its cross-portfolio deals for the NBCUniversal cable and digital properties—not to mention the beefed-up asking price for USA Network’s Modern Family—is likely to keep things moving at a very deliberate pace. That said, NBCU has done some deals with smaller and mid-sized agencies.

But for Viacom, which has completed a good portion of its deals by offering much more tempered CPM hikes (3 percent to 4 percent, per one buyer), the major cable network groups are effectively idle.

All told, buyers expect that broadcast volume will be down a few ticks from last year’s $9.55 billion take, while cable stands to improve its lot by as much as 8 percent, or $1 billion, from the year-ago $9.8 billion.