NBC about to kick-start upfront

Close to deal with GroupM for primetime inventory

The television upfront marketplace is starting to move after being stalled for more than a month, with NBC Universal and GroupM close to finalizing a major ad deal for next season. The deal is said to include broadcast primetime inventory, but any discussions over cable time are in the embryonic stage.

GroupM executives are vigorously denying that any deal is close to consummation.

Sources familiar with the negotiations say under the deal currently being discussed, GroupM is negotiating to secure an average cost-per-thousand rate that is dramatically lower than last year for its prime-time inventory. Though sources said the CPM average is minus-7%, it could end up well below that.

GroupM executives declined to discuss any pricing levels.

It's difficult to pinpoint where NBC's average CPM will fall to, as its prime-time pricing varies significantly across its schedule. Complicating matters this year is NBC's eclectic programming, which includes the Winter Olympics, Sunday Night Football and Jay Leno's entry into prime time.

Representatives for both GroupM and NBC denied any deal has been finalized. It's not clear yet the amount of dollars in play. NBC took in an estimated $1.85 billion in the 2008/09 upfront.

"GroupM has not completed an upfront deal with NBCU," said GroupM rep John Wolfe. When asked if a deal was close to being done, Wolfe said, "A deal is either completed or it isn't, and this one isn't."

NBC was the fourth rated broadcast network, averaging a 2.8 among adults 18-49 for the 2008-09 season. Most industry observers believed NBC would have to move first due to its weaker bargaining position.

None of other major broadcast networks -- ABC, CBS and Fox -- are said to be close to cutting deals. Until recently, they had insisted they would not cut deals below last year's upfront rates. But their stance has softened in the last several days.

"My sense is the other networks don't care what NBC does, believing NBC is in such tough shape ratings wise, that they don't have to capitulate like NBC," one industry observer familiar with the negotiations said. "The other networks may be more willing to take their chances next season in scatter rather than sell their inventory at negative CPMs."

If history is any guide, however, a deal as big as GroupM/NBC could easily spark the market for all networks, broadcast and cable.

GroupM is known for cutting early upfront deals. Two years ago, the media agency conglomerate teamed up to cut an all-encompassing $800 million upfront deal with NBCU's broadcast and cable properties that moved the upfront marketplace, and established the C3 ratings metric as the currency.

Mediaweek senior editor Anthony Crupi contributed to this report.