BARTER CRAZE ENTRENCHED IN SYNDICATION

The barter syndication business is following the rule, "Time is money." Despite robust local station revenues through the first two quarters of this year, barter continues to thrive. "The growth of barter hasn't even stopped. As far as we're concerned, it is out of control and has been for years. It will continue," says Dick Kurlander, VP-director of programming for the rep firm Petry Television. In barter syndication, TV stations return commercial time to the show's syndicator and pay smaller cash license fees. Rick Levy, senior VP of the barter sales firm One World Entertainment, expects 1995 to yield the greatest amount of barter syndication commercial inventory ever. If that happens, the industry is in line for a banner year. According to the Advertiser Syndicated Television Association, barter ad revenues should hit a record $1.6 billion this year. That would be a 7% increase from last year's $1.5 billion, itself a record. The current trend to increased barter bucks the historical relationship between the economy and barter. Normally, improved local broadcaster fortunes mean fewer barter agreements and more cash-based deals for syndicated fare, as stations elect to pay for their programming and recoup the cost through local advertiser revenues. However, with syndication programming and ratings reaching parity with network shows, syndicators have grown to like having the national ad time. "If local stations continue to do well, it makes sense from a logic point that stations will ask for more cash shows because they want the inventory back," Mr. Levy says. "But the syndicator has grown to accept that off-network or first-run syndication shows have barter. They accept it as part of the deal and that is a hard habit to break." For example, terms for two forthcoming off-network runs, Columbia TriStar Television Distribution's "Seinfeld" and Buena Vista Television's "Home Improvement," involve barter time along with sizable fees. Each weekday half-hour showing of "Seinfeld," for example, includes five minutes of ad time for stations, plus one minute held back for national barter sales. Stations that want to keep successful first-run series or acquire what they think will be the top off-network shows must comply to barter aspects of the deals, particularly if competing stations bid for the properties. "The only way it will change is when stations say selling the inventory locally is more valuable to us and they don't want syndicators to have it and will pay what the syndicator sees as appropriate license fees," says Dan Cosgrove, president, Group W Productions Media Sales. "It's not ready to happen yet," Mr. Cosgrove says. "Part of the reason the spot market is good is because barter has taken up what has previously been spot avails and helped tighten the market."

BARTER CRAZE ENTRENCHED IN SYNDICATION

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