Late Thursday Report

RECORD UPFRONT SALES REPORTED

ABC, NBC and Fox Finish Deal-making

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LOS ANGELES (AdAge.com) -- In what appears to be the strongest TV upfront ever, ABC, NBC, and Fox have completed their deal-making. Only CBS, in the network's typical strategic
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manner, is trailing behind, perhaps looking for even greater revenue gains.

For the broadcast TV prime-time upfront, media buying and selling executives project networks will now bring in a record $9.2 billion, almost 14% higher than a year ago, which set a record at $8.1 billion.

Affirming the network model
"We are very pleased that advertisers are voting with their pocketbooks. It's a strong affirmation of the network model," said Mike Shaw, president of advertising sales and marketing for Walt Disney Co.'s ABC Television Network.

Networks try to sell between 75% and 80% of their commercial airtime ahead (or "upfront") of the new fall TV season. Networks unveil their new shows and program schedules to media executives to entice them to buy commercial time for their clients during prime-time, when the price of an ad is higher than at other times of the day.

Quick pace
The deals between media and TV executives took almost two and a half days to complete, reminiscent of upfront markets during the 1990s that also were completed in such a short time span. Media buyers and sellers worked through Tuesday and Wednesday nights to complete deals.

All the major networks had asked for program increases of 20% or more cost per thousand viewers (CPM) but got somewhat less, though still high, at increases of 16% to 20%. Networks that saw increases of at least 16% include General Electric Co.'s NBC, News Corp.'s Fox, Viacom's CBS and UPN and ABC. The WB, part of AOL Time Warner, inked deals worth more than 20%.

Cable upfront
Major cable networks, according to media executives, have inked perhaps 20% to 30% of their deals. Those networks should complete deal-making by next week. Early projections are that cable networks will ink deals in the 5% to 9% range. Syndication business started moving on Wednesday.

Overall, media analysts are projecting that the network upfront will break down this way: NBC will grab $2.8 billion. CBS will improve with a $2.1 billion take. ABC will come in around $1.7 billion and Fox $1.65 billion. The WB will get to $700 million and UPN will post a gain of $250 million.

Despite predictions that major media agencies would shift significant advertising dollars to cable because of expected high network prices, the agencies stayed with the networks.

"Given the size of the market at $9.2 billion, I don't think [a significant shift in] money moved to cable," said one veteran media executive.

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