Warner Bros. Discovery’s upfront negotiations are said to be lagging behind those of its peers as TV advertising negotiations near a close for many major network groups. At the same time, the ad sales team at the newly merged company is bracing for layoffs.

Two buyers with knowledge of Warner Bros. Discovery’s negotiations said the company is trailing the marketplace after initially pricing its premiere package with what multiple buyers previously described as overpriced CPMs, or the cost to marketers to reach 1,000 viewers. The company, they said, is attempting to use its newfound scale as a bargaining chip to charge more for the combined asset package. 

“I don’t think anybody could say that they’re in a comfortable place with them right now,” said one buyer. 

A second buyer said that most networks came to the table with much more reasonable rate increases versus last year, which led to a “relatively swift marketplace where there wasn’t a ton of haggling over price.” But Warner Bros. Discovery’s decision to enter negotiations with pricey rate hikes left it trailing its network peers. This person added, “That’s simply not where the marketplace is. They had to get realistic very quickly.”

“We’re kind of putting the finishing touches on most of our deals outside of Warner Bros. Discovery. They’re still just starting up,” the second buyer said.

Warner Bros. Discovery declined to comment.

A number of major networks this week said that they’re nearing a close on their upfront dealmaking. NBCUniversal CEO Jeff Shell said during a Credit Suisse investor conference that the company is “pretty much done” with its negotiations, coming out at “high single digits” CPMs during this year’s ad haggle. Fox and Paramount are similarly said to be nearing the end of negotiations. Paramount CEO Bob Bakish said this week that his company was “80% to 90%” wrapped with upfront negotiations.

Cost cutting plans

Warner Bros. Discovery is preparing to scale back its ad sales division through a voluntary separation package for eligible employees. The move follows a number of other cost-cutting initiatives, including shuttering the streaming service CNN+ just a month after its launch under WarnerMedia.

Sources close to the matter confirmed that a buyout is being offered to eligible employees across the entire organization within its ad sales division, meaning that the company isn’t necessarily favoring one ad sales team over another after the teams combined earlier this year. While mergers often see an acquiring company favoring its own executives in leadership cuts, having ad sales teams that are intimately familiar with both brands behooves Warner Bros. Discovery as it muscles its way into the streaming and linear spaces with its newly combined assets.

A spokesperson for Warner Bros. Discovery declined to comment on whether layoffs are imminent. The company also declined to comment about how many roles are expected to be eliminated, but disputed an estimation earlier reported by The Information that indicated as much as 30% of the company’s ad sales workforce could be cut.