Strike jitters unsettle network ad buyers

Webs work on contingency plans

Fears of possible strikes are not only rocking the production community: The blurb biz is upfront about its ad agitation.

The prospect of strikes by the Writers Guild of America and the Screen Actors Guild is looming large, and the broadcast networks’ upfront sales season is less than two months away. Ad buyers are wondering if the new shows the nets are pitching will make it to air.

Media buyers are concerned that they won’t be able to fill their client’s needs if there’s a strike — and might, as a result, turn to cable and syndication, which rely less on scripted program and are therefore more immune to a potential strike.

Initiative Media’s director of national media Tim Spengler says there will have to be a contingency worked into all network upfront deals in case of a strike.

“We don’t just buy rating points for our clients. We’re buying shows,” Spengler says.

Publicly, the nets are optimistic. At a pre-upfront sales presentation last week in Gotham, CBS prexy-CEO Leslie Moonves expressed confidence that the web can withstand a strike: “We have the news, we have the reality, we have the movies of the week and miniseries, which is a fail-safe plan. We’ll have a prepared schedule ready to go into the upfront with.”

This week in Los Angeles, the other broadcast nets will meet with advertisers to present their primetime development slates. Some nets, including the WB, plan on showing advertisers both their full slate as well as strike-proof programming.

“We’re working on a plan in case there’s a strike so we have something to take to the street,” says NBC sales prexy Keith Turner. “There’s no question this will be hard and confusing.”

The timing of the upfronts will heighten the uncertainty for nets if the Writers Guild is either on strike or threatening to hit the bricks, says WGA director of strategic planning Charles Slocum.

“To the extent that there is uncertainty, the advertisers can use that as leverage to force down prices during the upfront season,” says Slocum, who worked at ABC before joining the WGA staff. “The networks are in a tough spot.”

The looming strike, paired with the soft economy, almost guarantees that the nets will reap less money during this year’s upfront. Topping last year’s record upfront of more than $8.1 billion is not even an option. It’s also likely that nets will sell less of their inventory in the upfront market (maybe 50% instead of 80%) and hold back for the scatter market, hoping for better prices once the strike is resolved.

Still, even with the double dose of bad news, sellers are characteristically upbeat.

“It’s going to be a good year for the entire industry,” says WB prexy and chief operating officer Jed Petrick. “Last year was an anomaly. Just because we’re not matching the exception doesn’t mean it’s not good.”

According to a report from investment firm First Union Securities released last week, NBC would probably be the worst hit of the Big Four nets since it doesn’t own a studio and doesn’t have much in the way of reality programming.

It’s unlikely that the nets would decide to boycott the upfronts if advertisers demand deep discounts. The nets will need to have at least some commitments to the fall and winter seasons.

“Without revenue guarantees from the upfronts, the networks would create a lot of worries on Wall Street,” says Slocum.

Networks will view potential pilots in Los Angeles during the last week in April; the WGA contract will expire at 12:01 a.m. on May 2; networks will make presentations to major advertisers in New York during the first two weeks of May; fall schedules will be announced during the following week; and SAG’s contract will expire June 30.

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