Upfront marketplace still stalled

Deals haven't materialized despite rumblings

As a weary nation welcomed the respite of the holiday weekend, TV ad sales execs were particularly looking forward to taking in some Fourth of July fireworks as pyrotechnics have been in short supply thus far in this year's upfront marketplace.

But for a first deal between NBC Universal and Group M -- one that, as of Thursday, both sides continued to deny had actually closed -- little headway has been made.

"There was a lot of talk at the beginning of the week, but nothing of substance really got done," said one national TV buyer who, like nearly all execs reached for this report, spoke on the condition of anonymity. "If there was a sense that clients were nervous about getting their money down before the Fourth, you wouldn't have guessed from how slow it was all week."

Interpublic's Magna also is in advanced talks with NBC, although a substantive push for a deal wasn't expected until this week at the earliest.

While ABC, CBS and Fox wait on the beach to see what numbers NBC will draw with its primetime lineup, cable and syndication as yet haven't so much as put on their bathing suits. "Most of the guys who really matter will get budgets in by the end of this week," one cable ad sales chief said. "And by the week of the 13th, we should start having some serious back-and-forth about pricing."

As of Thursday, some small-scale cable upfront deals had been completed, and while none was comprehensive enough to suggest any prevailing trends, pricing was fairly consistent. One ad sales exec reported doing a deal at "a very low single-digit negative," while another was said to have done business at a CPM down between 2 and 3 percentage points from last year's average.

As much as NBC appears to be further along in its upfront sojourn, the eccentricities inherent in the network's slate have added an extra layer of complication to its negotiations. Media buyers say they'll fight having to pay a primetime CPM for "The Jay Leno Show," which bows Sept. 14 in its new 10 p.m. weekday slot. According to one national TV buyer, agencies will look to devise a "blended price" that values the 10 p.m. slot at a lower rate than 8 p.m. to 10 p.m.

NBC denied that it would sell Leno at a lower CPM despite acknowledging that the show isn't likely to outdeliver 10 p.m. dramas like CBS' "CSI: Miami" and "The Mentalist."

If nothing else, all three sides of the supply triangle seem resigned to this slow-moving upfront. In many cases, the budgets that are in remain in flux -- "We get a number in front of us and it changes, as one client adds and another takes some off the table," said one ad sales boss -- and buyers and sellers said there are certain benefits to proceeding at a more measured pace.

The delay in closing business should allow agencies the time to focus on the mix of shows while working out pricing. "That's been a luxury we usually don't have, and it should save us some time having to go back to deal with mix after the fact," said the head of one major media agency buying department.

Meanwhile, as clients demand increased flexibility, sellers for the first time are contending with requests for fourth-quarter cancellation options. "That's a nonstarter," one ad sales exec said. "Let's see where we end up on price before we revisit that issue."

A protracted upfront would necessarily preclude the exercise of options, one buyer said. "Sure, it's nice to have options, but when would you exercise them? Aug. 15? That's a month from now."

Anthony Crupi is senior editor at Mediaweek; Steve McClellan is media editor at Adweek.
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