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NBCU Seeks Massive Ad-Rate Hikes for Megyn Kelly’s Morning Show (EXCLUSIVE)

NBCUniversal hopes Megyn Kelly lures new viewers to its morning schedule when she launches a program there in the fall. But the company wants her to bring new money to the time period as well.

The Comcast-based media conglomerate is seeking massive hikes in the rates advertisers pay for the 9 a.m. slot, according to two people familiar with current negotiations. NBC has said it will launch a new show anchored by Kelly in the fall at that time. One of these people said NBC is pressing for increases in the cost of reaching 1,000 viewers – a metric known as a CPM that is integral to talks between TV networks and Madison Avenue – that could reach as high as 30%. In contrast, CPM rates for ads in broadcast primetime this season are at present expected to rise between 8% to 9% at most.

NBCUniversal declined to make executives available for comment. The company is making its Kelly pitch as part of TV’s annual “upfront” negotiations, when U.S. TV networks try to sell the bulk of their commercial inventory for the coming programming cycle.

NBCU appears to be continuing a years-long effort to get advertisers to assign higher value to TV time that has typically been seen as deserving lower cost. Last year, NBCU sought to get primetime ad prices for its late-night mainstay “Saturday Night Live” after announcing it would trim the show’s ad load by approximately 30%. In 2013, NBCU made a bid for significant CPM increases for its airing of “Modern Family” repeats on USA.

The company has reason to seek new dollars for Megyn Kelly’s new program. The average cost of a 30-second commercial in the 9 a.m. hour of “Today,” which the popular anchor’s show will replace, was a paltry $12,745 between January and April, according to Standard Media Index, a company that tracks ad spending and costs. And the price hasn’t moved upward recently. The average cost of a 30-second ad in the show in 2016 was $12,786. Top advertisers in the hour last year included Johnson & Johnson, Dannon, Progressive Insurance, Novartis and General Mills, according to Kantar Media.

The strategy of pressing advertisers for better rates on bold programming maneuvers is one that has long been utilized by Linda Yaccarino, NBCU’s chairman of advertising sales and client partnerships. In 2010, when she ran ad sales for the entertainment-cable networks of Time Warner’s Turner, the company sought ad prices for Conan O’Brien’s new late-night TBS program that were in the ballpark of what sponsors paid for a 30-second spot on either CBS’ “Late Show with David Letterman” or NBC’s “Tonight Show with Jay Leno.

But the maneuver is not without risk. What if advertisers don’t see the value that NBC does in the non-prime inventory? NBCU met with resistance, for example, when it tried to convince ad buyers that “Modern Family” reruns merited broader-than-normal rates. And there is a danger that NBC could get higher deals, only to find viewership for a show is not what it guaranteed its clients. Rivals could also woo potential sponsors by offering narrower rate changes. Last year’s effort behind “SNL” would seem to have paid off: The show had its best ratings in more than two decades.

NBCU’s efforts put a new spotlight on how much the company is betting on Kelly. The former Fox News anchor came to greater fame in recent years while hosting her primetime “Kelly File” and tangling with then-presidential candidate Donald Trump during Fox-hosted Republican debates.

The morning program is just one of the bold NBC News effort which Kelly will helm. NBC is pitting her against Kelly Ripa and Ryan Seacrest, who host ABC’s syndicated morning program, “Live…” This coming Sunday, Kelly will anchor a weekly newsmagazine that will be set up against CBS’ “60 Minutes” over part of the summer. The show, “Sunday Night with Megyn Kelly,” will go on hiatus during football season, and return next year.

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