Networks wrap upfront sales

Rate increases mark strong TV market

The networks’ hopes for a strong upfront appear to have materialized as ABC, CBS and Fox wrapped deals with the major ad buying firms with rate increases in the 7% to 10% range.

NBC was lagging behind the other three on Wednesday, but still well on its way to finishing its upfront sales by the end of the week at increased rates of between 5% and 6%.

Robust rate increases are a change from the past few years when total upfront money was down and the networks had trouble achieving any increase. A struggling NBC suffered significant price drops amid a weak TV ad market — and last year, total dollars decreased from the year before.

Confusion over ad metrics added another layer of uncertainty, but high rates in the last-minute “scatter” ad market this spring gave the nets some hope that demand in the upfront would be strong. ABC, CBS and Fox are expected to book additional dollars due to CPM (cost per thousand) increases.

As expected, ABC appears to have secured the highest rate increases in the upfront, with a roster of returning hits such as “Grey’s Anatomy,” “Desperate Housewives,” and “Ugly Betty,” and total sales of $2.4 billion, a 5% increase over last year.

“We had more returning shows this year than in the last five years with good time periods to launch new shows right after them,” ABC sales prexy Mike Shaw said.

ABC registered CPM increases in the 8% to 10% range for primetime, where the network already had strong shows with high rates. In news, early morning and daytime, CPM increases were higher, helped by strong increases by “Good Morning America,” “The View,” and “World News with Charles Gibson.”

Following ABC in terms of rate increases was Fox, which inked deals in the 7.5% to 9% range. Sources said Fox expected to finish at $1.8 billion to $1.9 billion in upfront ad commitments. Fox has one less hour per night to sell in the upfront than the other nets and its total is lower accordingly.

Both networks said they did the vast majority of their upfront ad deals on Nielsen’s “live plus three” commercial ratings standard, an estimate of the number of viewers who watch commercials on programs within the first three days of initial broadcast.

One sector that did not do deals exclusively on that standard were the Hollywood studios, which bought on a variety of metrics including “live plus one,” depending on when the ad was to air relative to the release date. Sources said the studios also paid extra for “pod exclusivity,” meaning only one movie ad per group of commercials within a show.

Fox opted to sell less inventory in the upfront than last year, a hedge that the “scatter” market — last minute advertising buys later in the year — will remain strong as it was this year.

CBS had rate increases just below Fox but like last year likely will have the highest total with close to $2.5 billion in sales, a 5% increase from last year. It’s good news for the Eye, which took a $200 million hit in last year’s upfront because of weak demand and advertiser uncertainty over the impact of DVRs.

Sources said CBS had finished talks with all the major ad agencies and had written deals in the 8% to 9% range.

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