P&G in talks on $300 mil Viacom deal

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Procter & Gamble Co. is in talks to craft a ground-breaking, market-moving $300 million pre-upfront deal with Viacom's cross-media sales division, according to industry executives close to the talks.

The Viacom Plus deal would be one of the largest TV cross-divisional deals ever, and most likely encompass an array of Viacom properties-CBS, MTV, TNN, VH1 and BET as well Viacom's syndication divisions, Paramount Advertiser Services and King World Media Sales.

The deal, if it closes in the next week, would be considered a pre-upfront deal because the upfront TV market is generally considered to begin after network presentations of their programming lineups, scheduled this year to begin May 14. A CBS spokesman would not comment. A P&G spokesman also had no comment.

P&G is also talking to a number of other media giants about cross-media deals, including AOL Time Warner, Walt Disney Co.'s ABC Unlimited and NBC Connect. Such integrated, cross-platform programs are expected to sweep the industry in the wake of consolidation among marketers and media companies. An aggressive move in that direction by influential P&G could spur other advertisers to craft similar deals.

Details of the Viacom pact aren't well known and it is unclear what pricing P&G would receive. One person familiar with the matter described the cost per thousand rate P&G would pay as lower than average in exchange for spending more total money with Viacom in a down market. Overall, P&G is likely to spend more with Viacom than it normally does, but not significantly more, said executives close to the deal.

Last year, P&G spent $135.2 million on CBS, according to Taylor Sofres' CMR; $42.4 million on MTV; $9.4 million on BET; $6.3 million on Nickelodeon; $4.3 million on TV Land; $1.9 million on TNN (The National Network); and $800,000 on VH1.

P&G also spends heavily in syndication. Viacom's King World represents shows such as "Wheel of Fortune," "Jeopardy," "Hollywood Squares" and "The Oprah Winfrey Show." Paramount Advertiser Services sells "Entertainment Tonight," "Frasier," "Spin City" and "Judge Judy."

In the past, P&G was known for "bottom fishing"-booking low prices for programming, according to industry executives. But in the past few years during the bull market P&G waited a bit, particularly with cable, leaving sellers to cut deals with other companies ahead of them.

This left P&G with less inventory to buy than it wanted, said an ad executive familiar with the deal.

P&G appears to be moving early to guarantee all its intended money for TV is committed. Though the marketplace is weak, and advertisers seemingly are in no rush to buy programming, P&G's action could be viewed as an extra insurance policy.

Viacom Inc. President-Chief Operating Officer Mel Karmazin has said he would not sell inventory at bargain rates and would hold back inventory if necessary to maintain pricing. He also said that Viacom Plus is working on major pre-upfront deals.

From Viacom's perspective, the media conglomerate has to balance its desire to unload inventory in a weak market with the risk of selling too much at low prices, especially if the economy picks up, according to industry executives.

The estimated $300 million to $400 million Viacom Plus deal is being negotiated by MediaVest Worldwide, New York, a Starcom MediaVest Group media division. Executives there wouldn't comment about any possible deals.

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