Nets impress bucks-up buyers

Advertisers have money to spend but might not put it all in the upfront

In a soft market, nets have rolled out strong schedules. Despite the troubled economy, most advertisers are not drastically cutting their national TV budgets for next season, a signal that might bode well for the broadcast networks — if they don't take hard-line positions regarding rate increases.

Although many analysts project the primetime broadcast-network upfront revenue haul could decline by 20% or more compared with last year, most media buyers said the slippage will fall in the 5%-8% range. Even if the money is not allocated in the upfront, they added, it will get spent in the scatter market. Last year's upfront take floated around $9 billion, and most buyers said this year's total will fall to $8.2 billion-$8.5 billion.

"Advertisers and agencies are lying if they say they don't have a lot of money to spend," one media buyer said. "Ad budgets for TV will be close to last year. We just won't spend it all in the upfront unless we get the right pricing."

ABC, CBS and Fox are seeking price hikes similar to last year's levels: 7%-10%. Buyers flatly refuse to consider hikes and have said they will do business at flat-to-negative CPMs compared with last year.

"If the networks refuse to budge, we'll hold the ad dollars and spend them in scatter," one buyer said. "The networks have to understand there are no must-buy shows anymore and that by waiting for the scatter market, no advertiser is going to get shut out of a show."

The same buyer said even Fox's juggernaut "American Idol" no longer is a mandatory upfront buy. " 'Idol' is very high-priced, so it's not for every advertiser," the buyer said. "Even if an advertiser comes in during the season and 'Idol' is sold out, if enough money is on the table, you can bet that Fox will add an hour or two to the schedule. They have that flexibility."

Ironically, the broadcasters face a steep uphill battle on pricing in a year when buyers give them high marks for one of their best development seasons in decades.

Larry Novenstern, executive vp and director of electronic media at Optimedia, said: "Anyone who thinks the Golden Age of television was in the 1950s is wrong. The writing, acting and creativity is at its best right now."

He wasn't alone in his praise.

While all indications are that this upfront will drag well into the summer, some buyers said that's not a given, despite how far apart the sides seem to be on pricing.

"All it takes is one major agency to do one deal that everyone else looks at as defining the market, and things will move quickly," one buyer said.

John Consoli is senior editor at Mediaweek.