News From The Cable Upfront

by Ken Liebeskind, Jul 18, 2001, 12:00 AM

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Scant news has emerged about the cable upfront, but it’s still difficult to determine what exactly is going on. Everyone knows it’s a soft market, but no one is willing to say just how soft.

MediaPost has spoken to a few media buyers and cable companies, but most of the sources it sought for the story didn't respond or wouldn't comment. The problem is that media buyers can't speak about the deals they've made because they're confidential and networks aren't willing to discuss the deals because they're still underway, so no conclusions can be reached about total sales or CPMs, which usually get reported after all the deals have been made.

Everyone knows it's a soft market. Media buyers speak of rollbacks - prices lower than last year's – and this has been reported with alarm, since everyone is used to the rising prices of recent years.

In this supply and demand market, "the supply is constant in terms of viewers, but demand is a function of the national economy which is clearly down," explained John Rash, senior VP of broadcast negotiations at Campbell Mithune Esty/Minneapolis.

But it’s too soon to worry about the downturn. Another media buyer MediaPost spoke with, who requested anonymity, said, "It's a correction, not a collapse," explaining that the upfront will generate less revenue than last year's but is still higher than 1999, which was "a pretty good year."

He says it's the first roll back since 1991, which may be cause for some alarm. But let's not get carried away.

Another buyer who requested anonymity says he was able to swing some awesome deals. "If you can offer the cable networks volume, they do a very attractive price with significant roll backs," he says. He declined to mention any specific deals, of course. He said about 75% of his work was done (can you guess who he buys for?), unlike most of the other buyers who say the market will roll on for perhaps two more months, or "until they're through talking," another buyer says. Last week there was talk of all deals being concluded this week, but that was obviously premature.

When asked to compare the cable upfront with the network upfront, one buyer said they were similar, but then said, "In some cases there's even better pricing reduction-wise with cable." Early indications were that cable wouldn't suffer as much because it had been gaining on network recently. "They were wrong if they thought that, because cable's better in terms of rollbacks," he said.

MediaPost called most major cable networks and got virtually no response. A spokesman for Turner was the only one talking, with most of its deals done, "pacing at last year's volume," he says. There have been reports that Turner made deals up to 30% below last year's CPMs, but the spokesman discounted them, calling them unsubstantiated. He wouldn't provide another number, but he claimed larger cable networks, like Turner, wouldn't suffer CPM-wise as much as the small and mid size ones.

Hopefully later this month we'll get the final numbers and know the real score.

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