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Upfronts: TV Nets, Buyers Waiting For Final Ad Budgets

Viacom makes early promises while buyers dither about USA's "Modern Family"

Last week, the nation’s biggest TV networks made glitzy “upfront” presentations to advertisers in the hopes of tempting them to sponsor this fall’s TV slate. This week, so far, marketers are keeping their wallets in their pockets.

Ad buyers and other executives familiar with the pace of upfront discussions said advertisers are still registering budgets and analyzing pilots. As such, the networks continue to hold discussions with potential sponsors, these people said, but little if any money has been committed as of yet.

“We are still getting a handle on client budgets. Every day that goes by, we get a little bit clearer picture of what our client needs are,” said one ad-buying executive. “I don’t think we feel we’re ready to move, but I also don’t think we feel a big rush to move.”

The sentiment is typical of the preliminary part of the late-Spring haggling session known as the upfront, where TV networks try to sell the bulk of their ad inventory for the coming fall season. Last year, the buying didn’t get into full swing until early June, with Fox and ABC doing some preliminary deals at the very end of May.

The broadcast networks wrapped the majority of their 2012 upfront sales by mid-June, securing ad commitments of between $8.8 billion and $9.3 billion.

Ad buyers said Viacom has begun doing some early deals by offering to beat whatever terms cable rivals such as Time Warner’s Turner or NBCUniversal take to the market. Viacom has notched some early volume as a result, according to people familiar with the situation.

One emerging point of contention, according to ad buyers, appears to be USA’s fall schedule, which will be filled with reruns of sitcom “Modern Family.”

NBCUniversal’s USA cabler is pitching the program as something as valuable of reruns of popular laffer “The Big Bang Theory” on TBS or “Two and a Half Men” on FX: a proven and popular show that brings younger viewers to the network and scores well among broad audiences and is, therefore, worth a premium. “Modern Family” will displace long-running reruns of crime procedural “Law & Order: SVU,” and changes much of the typical USA programming grid, according to a person familiar with the situation. Since the schedule will be so different, discussions about its value ought to be as well, this person said.

Certain ad buyers, however, seem to be balking – at least initially. These buyers said USA is making the case that sponsors cannot buy a schedule on the network without running some ads during “Modern Family.” The reruns are – like “SVU” before it – expected to take up a significant amount of time on the cabler’s schedule. But the higher price being sought for the sitcom means advertisers would have to pay more for USA overall, no matter what their needs, these buyers suggested. Addition of teh One buying executive said clients had the option to buy “Modern Family” on ABC or in syndication on local stations for more appealing terms.

The next several days will reveal whether buyers are merely trying to spook NBCU or actively prepared to put dollars down elsewhere.

Buyers say their eyes are now on Fox. The network’s limited inventory (it only airs two hours of prime-time programming Monday through Friday and “American Idol” takes up a good portion of it) often spurs early interest from automotive marketers and movie studios fearful of not getting good schedules and missing out on the net’s heavy base among younger viewers between 18 and 34.

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