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ABC SIGNS $2.1 BILLION IN UPFRONT DEALS

Appears Headed for Best Year Since 2000

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NEW YORK (AdAge.com) -- ABC has taken in prime-time commitments from advertisers worth $2.1 billion during the upfront and has at least 20 new advertisers on board for next season, according to the network.
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Could be up 30%
If the $2.1 billion figure bears out when advertisers convert commitments to actual orders this summer, ABC could be up 30% over last year, when the it booked $1.6 billion in ad commitments, excluding sports, for its prime-time programming.

The network's sales president, Mike Shaw, told AdAge.com that the Walt Disney Co. network saw strength in a number of ad categories, including new luxury autos, financial services, technology and entertainment. "Those dollars were up significantly vs. a year ago," he said.

However, Mr. Shaw said the overall broadcast network market appeared flat in general. Last year's broadcast upfront raked in a total of $9.3 billion.

Expects strong scatter
Mr. Shaw confirmed that ABC sold slightly more inventory than last year, 80% compared with 77% in the previous upfront, and said he still expects to see a strong scatter market next season. The network confirmed that average CPM prices were in the 4%-6% range, though ABC's most popular shows commanded much higher CPM pricing.(CPM refers to the cost of reaching a thousand viewers.)

Mr. Shaw said the rush by advertisers to close business with ABC was much quicker than he had anticipated, but that interest was fueled by the quality of its programming, rather than the attractiveness of the pricing. He said buyers had shown support for many of this year's midseason replacements and that Walt Disney's CEO-elect, Bob Iger, had backed a strategy of allowing for additional investment in new programming. ABC ordered five new shows for fall and six for mid-season.

According to Mr. Shaw, among the most popular shows among marketers next season are: Commander-in-Chief, starring Geena Davis as president of the U.S.; the thriller Invasion and Emily's Reasons Why Not, a sitcom debuting in January starring Heather Graham.

Best since 2000
The network said this is the first upfront since Who Wants to Be a Millionaire caught fire for the network in 2000 that it has seen such positive numbers. That year, ABC had booked advance advertiser commitments worth around $2.45 billion, partly as a result of the huge Internet boom.

Once the network adds in sports programming, such as Monday Night Football, it could add $600 million to its upfront haul, along with an estimated $150 million typically associated with Super Bowl advertising commitments. The network will air next year's Super Bowl. ABC says that sports revenue would bring its total take closer to $2.85 billion.

In addition to selling the network, ABC also wrote some cross-platform deals as part of ABC Unlimited, and sold Disney cable channel SoapNet, ABCNews.com, Disney.com and enhanced television products such as HDTV.

While ABC has done brisk business, Viacom's CBS has also written the bulk of its sales, according to industry executives. General Electric Co.'s NBC had no immediate comment, nor did News Corp.'s Fox.

Relatively low CPM prices
The potential impact of relatively low CPM increases on the general entertainment broadcast networks is turning eyes toward how negatively that will affect general entertainment cable channels. Cable networks such as Tiem Warner's Turner Broadcasting and viacom's MTV Networks along with NBC Universal's USA and Sci-Fi Channel are sometimes used by agencies as cheaper stand-ins when broadcast network CPMs are unfavorable.

CIBC World Markets analyst Michael Gallant said, "Expectations for ABC's upfront this past few weeks have been high. Investors are trying to get a better read on whether the broadcast upfront is on plan or ahead? Is there incremental growth or is it at the expense of cable." Mr. Gallant said Wall Street was tightly focused on cable's upfront performance given that cable stocks make up many media company portfolios.

"People are more willing to pay their increases to the niche [cable] guys," one ad buyer said. "MTV Networks is looking at CPMs of plus-five [percent] tops. What happens if NBC goes negative and cable hasn't moved down?" The reference to NBC "going negative" alludes to pressure placed by buyers on the network to decrease its CPM rate, given that NBC finished the season fourth among the big four networks in the key advertiser-coveted 18- to 49-year-old demographic.

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