Upfront Begins to Heat Up as Fox, ABC Cut First Deals

Auto, movie dollars jumpstart the 2012-13 bazaar

The 2012-13 upfront marketplace sleepily shook itself to life today, as Fox began piecing together a wave of preliminary commitments.

Sources say that the network is doing business with two of its most stalwart categories, writing deals with auto manufacturers and at least two movie studios. As the leader in delivering adults 18-to-49, Fox tends to have first dibs on movie dollars.

Retail is also said to be in play.

Auto is expected to be strong throughout the upfront sales period, while studio dollars may run a little lighter than last year—largely because there are fewer prospective blockbusters on the calendar.

The early run of business is an encouraging sign, given that media buyers indicated clients had been slow to register their TV budgets. That delay ended earlier today as budgets began flooding into the top agencies.

If this perhaps was not the same sort of dam-bursting start Fox got off to a year ago, when it closed deals with two major agencies right before the start of Memorial Day weekend, the sudden uptick in activity suggests the market may move faster than buyers had anticipated.

Fox did not confirm word of its early deal-making.    

ABC and the youth-targeted CW are also writing business, although details about where those networks stood in relation to Fox were unclear. Like its rival, ABC is currently focused on nailing down auto and studio dollars.

With a median viewer age of 37 years, the CW also attracts a broad swath of movie money. Moreover, it is believed that the network began securing commitments from retailers this afternoon.

Fox thus far is writing business at high-single-digit CPM increases, in line with the premiums it secured in the 2010-11 marketplace under longtime ad sales chief Jon Nesvig. In his inaugural season at the helm, Fox ad sales president Toby Byrne last year commanded an average CPM hike of 11 percent.  

The first to begin writing deals, Fox last year was also first to reach the finish line. By June 2, a mere seven days after getting the ball rolling, Byrne had folded his tent. A week later, ABC, CBS and NBC had wrapped their respective business, making it one of the fastest-moving upfront bazaars in memory.

Along with its eight-year winning streak in the all-important 18-to-49 demo, Fox also boasts a relative scarcity of inventory. (The network airs 15 hours of prime-time programming per week, whereas the original Big Three nets offer 22 hours.) As such, Fox tends to get its ducks lined up much faster than its competitors.

One national TV buyer said that while the networks and agencies weren’t terribly far apart on price, there is some concern that at least one network will push too hard for double-digit CPM increases.

“You look where demand is—at best it’s up 1 or 2 percent in certain categories, at worst it’s down a few points,” the buyer said. “Anyone who says they want a 10 percent price increase is way off base.”

By and large, it’s been a quiet spring, almost wholly devoid of the chest-pounding rhetoric of yore. That’s largely a function of the relative softness of the scatter market. A year ago, networks were commanding Q2 scatter prices that were between 30 percent and 40 percent higher than the rates established in the previous upfront; this year, scatter is only up in the low teens. 

“I’m not saying there hasn’t been money in scatter, but it’s been slow to come,” said one TV buyer. “Some guys are filling buckets and some are not. And that tends to keep people from crowing about pricing.”

The initial deals were hashed out a day after CBS Corp. chief financial officer Joseph Ianniello told investors that CBS had yet to complete any of its upfront deals.

“Look, it’s still early,” Ianniello said during a media conference in London. “It’s still too early for business to break. Obviously, we’re going to hold out for what we deserve. Our ratings are up in every single key demo and we have a steady schedule. So we feel pretty good about the opportunity ahead.”

In a vacuum where dollar volume is perfectly commensurate with demand, the Big Five English-language nets should expect to rake in as much as $9.45 billion in advance commitments.

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