Upfront expected to finish at $9.2B, slightly below last year

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Once NBC has finished hunting for pennies under the sofa cushions, 2005 will be revealed as the year the TV upfront provided a much-needed market correction. It is expected to close a percentage or two down on last year at $9.2 billion.

That figure, based largely on the analysis of the networks, suggests that sales fell by around $100 million. While the majority view usually becomes the accepted figure, in truth the take may have fallen more than that, with a handful of media-buying agencies challenging several of the network figures-CBS's claimed $2.5 billion in particular-and suggesting the upfront will be down as much as $300 million.


Some marketers had complained that they were losing faith in the ability of the upfront marketplace to regulate TV pricing after years of double-digit price increases despite declining ratings. But Bob Liodice, president-CEO, the Association of National Advertisers, said this year the marketplace proved it works. "It's a big hooray for the marketplace. If the cost increases are too steep and delivery is inadequate ... we have alternatives. We'll use them appropriately."

ABC, apparently anticipating that total budgets would be down, was this year's big winner: It concluded its upfront in the blink of an eye; upped its take from last year's $1.6 billion to $2.1 billion; grabbed some big budgets that might have gone elsewhere; and generally set the pace for the upfront-annoying its competition greatly along the way.

In addition ABC is expected to reap $600 million in sports commitments, around half of that figure in long-term agreements. One sports buyer said the Super Bowl, airing on ABC next year, was between 65% and 70% sold out, with CPM pricing running above the 4%-6% that the ABC prime-time schedule commanded.

At the end of last week, NBC, the biggest loser in this upfront, was still negotiating with movie studios and smaller agencies to pull in the last bits of business. It is widely held to have booked around $1.9 billion, down from $2.9 billion in 2004, when the network included around $100 million of Olympic money. The network had no comment.

The drop for NBC is a seismic shift attributed not only to ratings declines but to share shifts, meaning that many buyers simply took their money elsewhere. Agency executives believe NBC would be wise not to sell as much inventory as it did last year, given the possibility it might have to offer make-goods.


CBS officials said its take was $2.5 billion, though there was widespread disagreement among agencies about the accuracy of that figure, with some agencies claiming that it was more likely between $2.3 billion and $2.4 billion.

There was much dissent about how Fox performed, given the network's decision not to reveal how much it sold this year. Some thought the network had done extremely well; others strongly disagreed. The News Corp. network brought in $1.55 billion but would not break out the percentage of inventory sold.

The smaller networks, WB and UPN, also managed to pull additional dollars, at $675,000 and $375,000 respectively.

Among the categories in decline were movie studios and movie DVDs, domestic autos, pharmaceuticals and package goods. Preventing a total calamity for the networks were other sectors which spent more than usual: fast food, consumer banks such as Chase and Bank of America and telecoms.

One question still remaining is what will next season's scatter market look like. Said one buyer: "It was definitely a buyer's market, the correction was definitely due. But the question is did the market adjust enough so that the equilibrium of scatter will be fixed?"

Last season, scatter pricing was often lower than upfront pricing levels. Upfront buying commitments are supposed to be offered at a discount to the scatter market. That was a problem for marketers, such as movie studios, who might have preferred the flexibility of just-in-time buying in scatter.

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