NBCU Cable Clinches Record Upfront Haul

Sales chief Cassaro gets big rate increases for USA, Bravo

There are a few stray deals to wrap before a final 2011-12 tally may be formulated, but for all intents and purposes, the upfront marketplace is closed for business.

All told, the national cable networks hauled in as much as $9.45 billion in total upfront commitments, surpassing broadcast’s $9.2 billion and marking the first time cable beat out the Big Five.

While the usual suspects put up some terrific numbers—Discovery Communications, Viacom’s MTV Networks, Time Warner’s Turner Entertainment, and News Corp.’s FX Networks all boasted at least one property that increased volume by as much as 20 percent—it appears that NBC Universal’s cable nets enjoyed the biggest year-over-year increases.

“The clients are voting with their dollars,” said Dave Cassaro, president of cable advertising sales, NBCU Cable. “For our overall portfolio of cable networks, we saw huge volume increases, over 25 percent. And demand for USA Network and Bravo generated some of the highest price increases in the marketplace.”

This year marked Cassaro’s first at the helm of the NBCU Cable sales team. The former president of Comcast Network Advertising Sales, Cassaro was picked to lead NBCU Cable’s sales efforts in November 2010, a few months prior to the FCC’s approval of the merger.

Heading into this year’s bazaar, one of Cassaro’s primary directives was to boost USA’s prime time rates. For years, the top-rated cable network has been almost criminally undervalued; for example, two years ago, USA’s Burn Notice commanded roughly half the CPM that rival TNT earned with The Closer.

By all accounts, Cassaro wrote deals that reflected USA’s status as the most-watched cable network on the dial. (According to Nielsen, USA in 2010 averaged 3.16 million viewers in prime time, of which 1.25 million were members of the 18-49 demo.) Media buyers said USA’s prime time CPMs rose as much as 19 percent versus last year’s spring fling. 

Despite warnings that the economy seems poised to take another nosedive, Cassaro said he believes the television market will hang tough, noting that third quarter scatter remains strong and the indicators for Q4 remain encouraging.

While macroeconomic issues remain dicey (consumer confidence, commodities prices, unemployment, etc.), Cassaro said that perhaps the most important factor to assess in the coming weeks and months is corporate profits. As long as the marketing partners are bringing in huge profits, there will always be a robust TV market—and the efficiencies inherent in cable make it a particularly attractive option.

Thus far, analyst concerns have been unfounded. Last month, UBS number cruncher John Janedis warned that cancelations could be in the offing. “The scatter market has finally started to slow, which could impact results as early as Q3,” he said. “Higher cancelations could also be a factor.”

As the deadline for Q3 cancelations has come and gone, and because options are off the table in the fall, Janedis’ fears may be groundless. That said, Japanese automakers have pulled back on third-quarter commitments, as the country’s supply chain remains disrupted by the March 11 disaster.

Procter & Gamble has also pulled out of some of its TV commitments. Far and away the biggest TV spender, P&G last year invested $895 million in national cable buys and another $710 million in broadcast.

“While there is likely a lingering element of posturing related to the recently wrapped upfront, our sense is that lackluster economic growth and elevated fuel/input costs are finally starting to impact marketers’ budgets,” Janedis said.

Cassaro doesn’t see things in that light. In fact, having just closed the books on this year’s upfront, he’s already looking forward to 2012-13.

“I truly believe that next year’s cable upfront will likely exceed $10 billion,” Cassaro said.