"We all knew it was inevitable," said Doug Seay, senior VP-director of national broadcast for Publicis Groupe's Publicis & Hal Riney, New York. "It's probably a good business decision and gives them more options in an unknown marketplace. It's not good or bad for anyone. Putting it together could give [advertisers] more benefit in terms of budget leverage."
For many years, the consolidation of TV and other media entities has raised the ire of agency media buyers. Advertisers want more choice, more options, more competition among TV networks to keep prices down.
Mel Karmazin, Viacom's president and chief operating officer, has stated that consolidation among TV networks and other media is a direct response to media agencies' consolidation in recent years to gain advertising revenue leverage with media sellers.
Viacom last week announced it will integrate its two broadcast networks under CBS in January. But even when the CBS and UPN ad sales units combine, the networks won't necessarily be sold in package deals. Selling CBS and UPN together isn't a perfect fit right now. CBS skews to an older audience, 25-54 and 18-49, while smaller UPN skews to younger viewers, 12-24 and 18-34.
Combining the two networks will, however, help both, according to agency media buyers. UPN will gain relationships with CBS advertisers it doesn't do much business with-package goods and drug companies, for example. CBS will gain from UPN's list, such as movie companies and videogame producers.
CBS will run UPN under CBS President-CEO Les Moonves. UPN had been reporting to Kerry McCluggage, chairman of the Paramount Television Group, who resigned last week. CBS hasn't released details about staffing after the consolidation.
"For UPN, this is a smart move," said an executive close to the company. "Are they going to be run by broadcasters? Yes. Are they going to have money for development? Yes. Are they going to have money for promotion? Yes. This is something that should have been done a long time ago. It takes [UPN] further away from [competing with] syndication. Anyone who can deny that Les Moonves has done a terrific job is nuts. You can't fight with his track record."