UPFRONT BAZAAR ABOUT TO BEGIN

Much Posturing Marks the Start of Negotiations

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LOS ANGELES (AdAge.com) -- Mel Karmazin is mounting an upfront offensive again.

Viacom's president and chief operating officer, who directed CBS, Viacom's broadcast network, to hold back inventory last year because of soft pricing, has requested a high 12% cost-per-thousand viewers increase over last year's upfront pricing, according to one media executive.

Setting rates
Thus marks the unofficial start of the upfront, the time of year when networks set ad rates for their upcoming programming.

CBS' double-digit

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figure is an greater increase than NBC's, which viewed as the most desirable network because of its industry leading adults age 18 to 49 demographic rating. The Peacock network is offering an initial price jump of 8% on CPMs over last year. ABC is low in single digits at 3% to 4%.

Fox, which saw ratings declines last season, opened negotiations requesting a surprisingly high CPM rise in the 9% to 10% range for some categories including movies and video games. A Fox spokeswoman had no comment.

Throughout the industry, media buying agencies submitted budgets to networks en masse and some media plans have been returned to agencies with pricing offers. For example, number of Hollywood studios have already registered budgets this week with all networks.

Posturing
But these are all initial offers and put forth largely as posturing -- the first foray into negotiation. The high number posted by CBS, for instance, could signal that Mr. Karmazin may opt to hold back inventory again this year.

Network and media agency executives expect some deals to be inked tonight and tomorrow -- launching the annual upfront bazaar.

NBC and CBS are still expected to be the pace-setters and establish where the market rates will settle. "It's really a two-horse town," said an executive. One media executive said NBC had closed some business with a CPM jump of 7% to 9%. NBC executives weren't available for comment.

Catbird seat for NBC
NBC is in the catbird seat in particular -- and it has moved more quickly with movie studios, traditionally the category that pays the highest CPMs. Movie studios, which saw their business increase 20% through the first five months of the year, are expected to boost spending, as well as foreign auto markers, according to executives.

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