Why There’s So Much Uncertainty Heading Into This Year’s Upfront

Buyers wonder what the biggest media companies will look like in a year

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For several months, Scripps Networks Interactive ad sales chief Jon Steinlauf was preparing for his annual upfront tour, while being unsure of exactly when Discovery Communications would officially acquire his company. “So we built our ‘business as usual’ presentation,” he recalled, “but we knew that somewhere along the line, the deal could close, and we could become Discovery overnight.”

That finally happened on March 6, leaving Steinlauf—who was named chief U.S. advertising sales officer of the combined company—with just two weeks to pull together the first of seven upfront events around the country for what is now known as Discovery Inc. Now, as buyers assemble on Tuesday for the biggest of those presentations in New York’s Alice Tully Hall, they have some pressing queries of their own; namely, exactly how will these two companies integrate their networks and their ad sales teams?

But the confusion isn’t limited to Discovery Inc., as major questions linger around nearly every major media company heading into this upfront: When, if ever, will Turner’s parent company Time Warner finally close its deal with AT&T? At what point will Disney absorb most of 21st Century Fox, and what happens with the leftover assets, tentatively known as New Fox? Or will Comcast throw a wrench in that deal with a its own bid for Fox? Will CBS and Viacom, which decided once again to explore a merger in February, finally make it to the altar? And whom will A+E Networks tap to replace CEO Nancy Dubuc, who announced her departure last month just three days before the company’s upfront presentation?

“This year, the dynamism of the market is unparalleled relative to the change that we’ve seen in years past. There are a lot of moving pieces."
David Cohen, president, North America, Magna Global

This has left buyers in a more uncertain position than ever heading into the upfront, as they contemplate their strategies for companies that could look radically different within the next 12 months. “This year, the dynamism of the market is unparalleled relative to the change that we’ve seen in years past. There are a lot of moving pieces,” said David Cohen, president, North America, Magna Global.

Then again, “change has been happening every year for us,” said Donna Speciale, president, Turner Ad Sales, who noted that last year’s upfront was overseen by new ad sales chiefs at Disney-ABC, Fox Networks Group, Discovery, AMC Networks and Viacom. “This year, most of the heads are the same. Now their companies are going through this transformation. None of this change is surprising to me because we’ve all believed there was going to be a consolidation. But did we think all of it was going to happen in the same year?”

Buyers are keeping their calm for now. Cohen said they have received “a very clear timeline” from some of the companies in play about when deals could close and how they could potentially impact the upfront. “Everyone has been straightforward.”

Because Turner, Fox, Disney, CBS and Viacom’s fates might not be resolved for some time—and upfront deals will be honored no matter how things shake out—another buyer suggests that the biggest upfront challenge will be Discovery Inc. Historically, Scripps was “always a tough one to negotiate with, because they negotiate from a position of strength,” according to the buyer. But with Discovery’s broader portfolio, “we usually didn’t get killed on pricing, and they usually did pretty well on volume on the networks they needed it on, and everyone walked away happy. With Jon Steinlauf overseeing all of it, what approach is he going to take?” Steinlauf told Adweek that he won’t finalize his upfront negotiation strategy or how he’ll integrate Discovery and Scripps’ ad sales teams until after his seven upfront events conclude on April 25 in Los Angeles.

Meanwhile, buyers agree that they’re least concerned about A+E’s vacant CEO position; Cohen said a single individual impacts the upfront far less than the “wholesale structural changes” at the other companies. “You could argue this will be the biggest year of change in the industry,” said Peter Olsen, evp of ad sales for A+E Networks. “Our stuff will look minor compared to some of these other things.”

This story first appeared in the April 9, 2018, issue of Adweek magazine. Click here to subscribe.

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