Alphabet takes big bite of b'cast upfront market
NEW YORK — ABC hauled in $2.7 billion in advertising commitments for the coming season, a 30% increase from 2004, driven by a spate of hit shows including “Desperate Housewives,” “Grey’s Anatomy” and “Lost.”
The Disney-owned network’s tally, which included cost-per-thousand (CPM) rate increases of 4%-6%, represents a big bite out of the broadcast upfront market, which many analysts expect to be flat from last year.
Presuming CBS and Fox are also able to win substantial increases, the result could be painful for NBC, which so far has watched the dealmaking from the sidelines.
“When ABC makes that kind of haul, without anyone really competing, it means they’re (the other nets) going to have to scramble for what’s left,” one national ad buyer said.
$600 mil for sports
ABC began cutting deals soon after its upfront presentation and finished writing business late last week. The network pulled in $2.7 billion in commitments, with$600 million for sports, including “Monday Night Football,” NBA games and college football’s “Bowl Championship Series.”
“We had a relatively quick upfront,” said ABC sales prexy Mike Shaw. “The pricing wasn’t out of the ballpark. The minute the word got out we had started, all the agencies knew they had to get in.”
Advertisers said they opted to deal first with ABC driven by a desire for guaranteed placement on hot shows, the net’s impressive development slate, and rate increases they deemed reasonable.
“ABC came in with prices that were within the guidelines, and the buyers responded,” said advertising analyst Jack Myers.
Ad buyers said the pace was brisk; after ABC wrapped up, CBS, UPN, Fox and the WB began writing business late last week.
Eye set to wrap today
CBS expects to wrap up sales today with increases they expect to be slightly higher than ABC’s.
Advertisers said they expect to conclude most network upfront business by the end of the week.
“Going in, we thought the broadcast networks would be down slightly and the cable networks would be up, but given the price structure, some dollars could shift back out of cable into broadcast,” said Steve Grubbs, chief exec of PHD North America.
The biggest question remaining is what will become of NBC. The Peacock is accustomed to leading the market but now is apparently waiting on the sidelines as it attempts to hang onto as much ad business as possible in the face of a 17% ratings decline in the 18-49 demographic.
By Tuesday, NBC was the only network that had not cut any upfront deals.
“The market wants them to be down; the question is how much down,” Myers said. “If it’s a soft market and CBS and Fox go first, NBC could end up getting royally screwed.”
NBC took $2.9 billion last year but stands to see ad dollars diminish by as much as $500 million in this year’s upfront.
Buyers say that would represent a victory of sorts for the Peacock, which would still finish right behind CBS and ahead of ABC in total dollars.