CBS, UPN AND ABC NEARLY FINISH UPFRONT TV SALES

All Sold Less Inventory Than Last Year

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NEW YORK (AdAge.com) -- Broadcast networks CBS, UPN and ABC announced the conclusion of the bulk of their upfront sales negotiations yesterday, with CBS up from last year and ABC slightly down in a market that, overall, was flat at best. However, both networks sold less inventory this year than during the 2003-04 season.

CBS and UPN, which are owned by Viacom,

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took in significantly more money than last year, with CBS adding the largest chunk of additional upfront money. The network was up 9% from last year, taking in between $2.2 billion to $2.4 billion this year, though that figure is still an estimate as the network has yet to complete deals with smaller media-buying agencies.

The "upfront" refers to the buying bazaar that takes place each spring as the TV broadcast networks try to sell between 75% and 80% of their commercial airtime ahead, or upfront, of the new fall TV season.

Gains for UPN
CBS' president of ad sales, Jo Ann Ross, who also oversees UPN's ad sales, said she expects CBS' prime-time haul to be $2.4 billion and between $300 million and $350 million for UPN, up from last year's take of between $250 million and $260 million. As for how much inventory the network sold, Ms. Ross said the network sold less than last year, at anywhere between 80% to 85% of its volume, while UPN sold around 85% to 89%.

ABC, owned by the Walt Disney Co., said it completed its upfront sales negotiations, taking in a prime-time entertainment figure of $1.6 billion, down from $1.7 billion last year. The figure excludes an additional $500 million to $600 million in sports and specials, such as the 2005 Academy Awards ceremony.

The Viacom- and Disney-owned networks were last to wrap up their upfront talks because of pricing disagreements with Magna Global, part of Interpublic Group of Cos. and GroupM, part of WPP Group. The two media-buying giants are estimated to control up to half of the total market.

CPM increases
Ms. Ross said average increases in the cost-per-thousand (CPM) viewers were in the double digits but conceded some deals were done at plus 9%. Ms. Ross refused to comment directly on whether the network had come to an agreement over CPM prices, but an executive close to Magna said the company had not made agreements with CBS at double-digit increases, but would not give further details. Ms. Ross said UPN was also getting CPM increases of 9% on the back of strong programming such as America's Next Top Model. The network will air two seasons of the show in fall and spring, with a new show starring rapper Missy Elliott airing in between. The untitled show is a hip-hop talent contest that has the contestants living together as they progress through the competition.

ABC is said to have stuck to its demand for CPM increases of plus 5%. Mike Shaw, president of sales and marketing, said in a statement: "Historically, over the last 11 out of 12 years, the scatter marketplace for all networks has seen increases over upfront pricing, so selling more in scatter has been an advantage for the networks."

The scatter market is when networks sell remaining ad space at a premium to marketers who need to run ads as the need arises.

Remaining networks
Separately, General Electric's NBC was reported to have brought in an estimated $2.9 billion, $100 million less than last year, while News Corp.'s Fox took in an estimated $1.6 billion, around the same as last year. Time Warner-backed WB network attracted $675 million, down from $710 million the previous year. Taken together the broadcast network haul is roughly on a par with last year at $9.3 billion.

"We felt early on we'd be the market leader and the market bore that out," Ms. Ross said. "It's a good story all round for the networks, good for network TV." When asked whether the announced resignation of Viacom's president and chief operating officer, Mel Karmazin, had affected negotiations, she said the news "didn't affect any dealings. Not to minimize the fact that he left, for us it was OK, business as usual."

The syndication market and the second tier cable negotiations are expected to kick into high gear this week.

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