Who'll blink in the upfront showdown?

Cue the Ennio Morricone music…

The standoff between the major networks and ad buyers for the upcoming season has made the mood on Madison Avenue akin to the last 20 minutes of a spaghetti Western. Everybody’s waiting and watching for the first flinch that sparks the big shootout.

At stake is $8 billion-$9 billion of advance advertising bookings for the upcoming TV season. The usually frenzied upfront ad sales process is typically wrapped up within a few weeks of the broadcast nets’ fall schedule presentations in mid-May. This year, amid the recession, the biz was braced for brutal negotiations and a drop in overall spending in the upfront.

But nobody expected the sides to dig in so hard that the start of serious dealmaking would be pushed beyond the Fourth of July holiday. The last time the process dragged into July was in 2002, after the twin blows of the dot-com meltdown and the Sept. 11 terrorist attacks.

The fundamental roadblock is, of course, money. Media buyers are pushing networks for as much as 10%-12% discounts in ad rates compared to last year, when ABC, CBS, Fox, NBC and the CW booked about $9 billion in upfront coin by mid-June. This year, CBS, ABC and Fox have — at least so far — linked arms to hold the line at discounts of no more than 2%-3% vs. last year, and none at all for top-tier programs.

NBC, meanwhile, is in its own unique pickle. Not only has the Peacock’s ratings perf lagged its competitors for years, making it more vulnerable to pressure to cut rates, but the network is gambling on five nights a week of “The Jay Leno Show” at 10 p.m. Anecdotal reports indicate that buyers are balking at paying primetime rates for a show perceived as little more than a 10 p.m. spin on “The Tonight Show.”

Cable, which has traditionally booked its sales after the broadcasters, could be a wildcard. But while major players like TNT and USA are eating away at the Big Four nets’ market share, cablers have no incentive to cut deals before the top of the market is established by broadcasters — unless ad buyers were to offer big rate increases, which is unlikely under the circumstances.

Another issue that’s held up the usual upfront wheeling and dealing: Amid the worst economic climate since the 1930s, execs at many companies that are heavy buyers of TV time are questioning their levels of spending and scrutinizing the return-on-investment figures.

“It’s something we’ve seen happening over the last few years, but this year it’s taking on far more drama than ever before,” says Jack Myers, media economist and publisher of the Myers Report.

Perhaps counterintuitively, the longer the impasse on pricing drags out, the more the leverage shifts to networks. Sure, the major showbiz congloms want the certainty of locking in upfront sales. But plenty of major advertisers also need the long lead time to plot marketing campaigns and make sure they have spots running at the right moment during the likes of “Grey’s Anatomy,” “CSI” and “American Idol.”

So the longer they wait, the more likely that advertisers will have to pay a premium by buying spots in the short-term scatter market, where prices fluctuate based on demand.

“If I were in the shoes of a network sales executive, I’d say: ‘We’re shutting down upfront negotiations as of X date. If you’re not in by then, you’re in the scatter market,’ ” Myers says.

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