70% of Fox Ad Inventory Sold

NBC, CBS Not Far Behind, but ABC Sales 'Slow to Develop'

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NEW YORK (AdAge.com) -- News Corp. Chairman Peter Chernin has told analysts the Fox network has sold 70% of its ad inventory at increases of 2%-3%, and said other networks aren't far behind.
News Corp. Chairman Peter Chernin said the strategy was to 'go for volume.'
News Corp. Chairman Peter Chernin said the strategy was to 'go for volume.' Credit: Fox

"Our strategy going into this upfront has been to go for volume," he said. "Our entertainment ratings have increased 15%-16%, and we looked at the CPM structure, and we -- and NBC -- have a higher CPM than anyone else, at about $30. CBS is 10% below us and ABC 10% below them. So our strategic view is not to go for huge increases in CPMs but to go for volume, to try and monetize as much of the ratings."

Mr. Chernin confirmed that Fox probably would end the upfront up from last year, when the network won cost-per-thousand-viewer increases of around 4% and brought in around $1.6 billion. "We'll end up higher in raw dollars is my guess," he said. The News Corp. network sells 15 hours of prime-time programming compared to the other networks' 22.

What to expect
Mr. Chernin predicted that, with the exception of ABC, Fox would see the largest CPM increases. He added that CBS and NBC are also 60%-70% done with the upfront.

Executives close to NBC said the General Electric Co. network is 40% sold and expects to end the upfront period with sales close to last year's $1.9 billion. A network spokeswoman said NBC had no comment.

CBS Corp. Chairman-CEO Leslie Moonves described this year's upfront as a "wait-and-watch" game, and said all the networks this year are looking for volume. But Mr. Moonves said the amount of inventory sold in the upfront wasn't as meaningful as most commentators suggest. In previous years, he said, CBS has sold as little as 65% of its schedule but ended up gaining more dollars because of a strong scatter market. "It's a very interesting PR thing that goes on when our advertisers always say 'down CPMs' and we always say 'way up' and the truth is somewhere in the middle."

Separately, Walt Disney Co. Chief Financial Officer Tom Staggs said ABC sales were "very slow to develop." It is unclear if the network has written any business. It had no comment.
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