By Published on .

Most Popular
Spurred by the breadth of the $36 billion Viacom/CBS deal, ad agency media buyers, working through the American Association of Advertising Agencies, are getting ready to fight significant elements of the merger.

Members of the Four A's media policy committee said last week the first task will be to develop a standard that can guide Justice Department anti trust scrutiny of the merger's ad implications, especially in the six markets where the deal would give Viacom two TV stations: Philadelphia, Boston, Dallas, Detroit, Miami and Pittsburgh.

That still-to-be-devised standard would call for looking at the competitive impacts not just at the corporate level or station-by-station purchases in a geographic market, but of potential effects on individual demographic segments bought by advertisers.


"You do worry about choke points," said Alec Gerster, chairman of Grey Advertising's MediaCom, New York. "Where do they corner the market? The immediate question is what does it mean in local markets."

There were no immediate indications that marketers also would directly oppose parts of the deal. The Association of National Advertisers had no comment, and at least one ANA member voiced mixed feelings.

"Eventually, I think they're going to be able to charge more, but from an advertiser's point of view, there should be some benefit if CBS has links to other networks," said Arthur C. "Bud" Liebler, DaimlerChrysler senior VP-marketing. "They can put deals together and help you reach other audiences."

He continued: "If you're a global company, there haven't been many opportunities to reach your different regions" so "there could be opportunities."


Agency media buyers are worried about the U.S. impact, however.

Jean Pool, exec VP-director of North American media services, J. Walter Thompson USA, New York, said the agreement creates multiple problems.

Ad groups need to fight any Viacom attempt to retain both UPN and CBS, she said, and to look at the potential impact on competitiveness of combining Viacom's cable networks with local stations. In addition, they should hold out against attempts to allow companies to have 35% of national TV households and look at the impact of owning two TV stations in a market.

Ms. Pool, who has tangled before with CBS CEO Mel Karmazin on media-concentration issues in the radio industry, said she is very worried.

"That is ridiculous, having UPN and CBS [together]. Next it's NBC and then Mel takes over the world," she said.

She added, "We need to lodge a complaint with Justice that this is too much power in the hands of a few. It's not good for the advertiser; it's not good for the consumer. In some markets, they own the entire demographics. It is truly monopolistic."


"I don't like the over-the-air impact," said Allen Banks, exec VP-media, North America, Saatchi & Saatchi, New York. "These kinds of things that limit the competitive nature of the market are problems for us. . . . We are going to have look at this market by market."

As for Mr. Karmazin, Mr. Banks said: "The man is a genius, a guy who has sold his company how many times and winds up owning the company at the end of the day."

Neither agencies nor marketers opposed the so-called duopoly rules that FCC adopted on Aug. 5, which triggered the Viacom/CBS deal by allowing media companies to own more than one TV station in a market.

Now, amidst reports that NBC seeks to acquire part of Paxson Communications, and of newspapers publishers' requests that the FCC drop its ban on new cross-ownership of print and broadcast media in a market, fighting individual deals could be challenging.

The Four A's successfully urged the Justice Department to limit radio station combinations, but TV station deals are more complicated.

In radio combinations, some media companies tried to buy stations giving them more than 50% of ad revenues in a market. Agency complaints prompted Justice to examine the impact whenever one company gained 40% of ad revenue of a market or a demographic.


An analysis of the Viacom/CBS deal prepared by BIA Research's Media Access Pro shows it would cause its biggest concentrations in Philadelphia, Boston, Dallas and Detroit. But its maximum impact gives the merged company nearly a quarter of the ad revenue in Philadelphia (where CBS's KYW-TV would combine with Viacom's WPSG) and in Dallas, where CBS' KTVT would combine with Viacom's KTXA.

"We have a lot of work to do," said Ms. Pool. "It can't just be my opinion. The question is, 'How much is too much?' "

Mr. Banks said the media-buying community needs to be certain that a variety of scenarios are reviewed. CBS' earlier, pending deal to buy King World Productions, for instance, gives the company the opportunity to move popular game shows such as "Wheel of Fortune" to UPN and turn that network around.

"This can change in a heartbeat," he said. "We have to come up with something that will be helpful to the process.

In this article: