• by Paul Gough , June 2, 2004

While the main event is still hours or days away, a top broadcast network executive Tuesday said it has already completed a few rounds of 2004-05 upfront ad deals.

"We've already made a couple of deals last week," Leslie Moonves, the newly appointed co-president and chief operating officer of Viacom, said of CBS' upfront status. "We're a little ahead of the market."

Moonves' comments were the first public acknowledgement that the upfront has begun for CBS, which was expected to be the lead network in the broadcast network upfront, though media buyers have said that early deals with movie marketers and automakers have been under way for about a week.

Buyers and their network counterparts took a three-day weekend that, in some agencies, was extended to four days as many took last Friday off as well.

"We're all coming back from a holiday weekend," said one executive who asked not to be named. The executive expected the deals to start flying either today or Thursday, with the possibility of it having begun in the wee hours of last night. Various explanations have been floated for what some would consider a delay in the broadcast upfront--chief among them the contention that this year isn't abnormal in history, just slow compared to the frenzied pace of the past two years.

The big cable networks, meanwhile, were speeding along with the upfront. Tom Freston, co-president and co-chief operating officer of Viacom along with Moonves, said that MTV Networks was getting close to finishing. That's the consensus of several cable networks.

Few details were available on the initial CBS deals, although executives said they were happy with the CPM increases gleaned by the Tiffany Network. CBS is generally expected to reap the most benefits in the upfront, with estimates of CPM increases between 8 percent and 10 percent. That's not expected to change, even with the sudden resignation of Mel Karmazin--who as president of Viacom had been pushing for ever-higher CPMs and who famously shut down negotiations three years ago when it was clear CBS wouldn't get the prices it wanted. That year, CBS held back inventory and got it back--and more--by selling scatter inventory.

Karmazin's quick departure set a ripple through the media industry, putting a different spin on a broadcast network upfront that has already largely departed from the tenor of the past two years.

"We're going to see how it works out," said one agency executive, adding that the agency didn't want to say too much around negotiation time.

"Obviously, we don't want to piss anybody off," the executive said.

Peter Gardiner, partner and chief media officer of Deutsch, said that they were disappointed but not surprised by Karmazin's departure. Gardiner didn't think that there would be a huge effect, because he said that both Freston and Moonves were both eminently qualified to take over Viacom.

"These are two extraordinarily successful, respected, smart guys," Gardiner said. "With the exception of Mel's presence and sort of power in the press and his ability to make some headlines and make some people think, you couldn't look for two better" executives to lead Viacom.

And while Karmazin had been one of the odds-on favorites to take Viacom into the future after Chairman Sumner Redstone's retirement, those chances ended when Karmazin resigned. In a conference call Tuesday morning, Redstone praised Freston and Moonves and said that they were not only all personal friends, but that one of them was more than likely to succeed him when he retires in three years. Redstone, who is 81, seemed to take his 50-year-old daughter Shari out of the running to take over Viacom, despite rumors to the contrary. He said he would be surprised if either Freston or Moonves didn't run Viacom after he left.

"I don't want to go, but I am," Redstone said.

As for Karmazin, he was the silent man through most of Tuesday, save for a brief canned statement released by Viacom. Rumors swirled throughout the day that Karmazin might eventually end up replacing Walt Disney Co. Chief Executive Officer Michael Eisner after Karmazin's 60-day consultancy contract expires with Viacom. Two Eisner detractors--former board members Roy Disney and Stanley Gold--said the Disney board should hire Karmazin, but Board Chairman George Mitchell said Disney would stick with Eisner.

As for Eisner, he's scheduled to appear at an investors' conference Wednesday afternoon sponsored by Sanford C. Bernstein.

While an opportunity with Disney wasn't mentioned in two Viacom conference calls Tuesday morning, Redstone didn't seem to be worried about any competition with his former top executive. Redstone said Viacom had a top-flight executive team in place.

Buyers have raised slight concern about the ascension of both Freston and Moonves--who run programming, compared to Karmazin who came up through the ranks of sales, albeit in radio. Karmazin was widely regarded as the hard-charging force behind Viacom's take-no-prisoners attitude with the advertising community. Yet buyers have also been hearing that Moonves has also embarked on a get-tough policy that starts with his own sales executives, saying that programming has been undervalued by Madison Avenue despite its high quality.

But Gardiner didn't buy any lack of qualifications, calling Freston and Moonves incredibly talented.

"This is not a criticism of anybody--but remember, 10 years ago, Mel was a radio salesman," Gardiner said.

For his part, Moonves said Tuesday morning that Karmazin's departure wasn't going to change Viacom's good fortune.

"We're going to lead the market in the upfront. I don't think these appointments do a thing to change that. It only makes us a little stronger," Moonves said.