• by Joe Mandese  @mp_joemandese, June 1, 2004

Of the many folk stories that have circulated around network sales strategies during an upfront advertising marketplace, none are so telling as the one making the rounds last week, just as the 2004-05 broadcast network upfront was finally beginning to heat up. According to media buyers, NBC, which still claims to be the lead network, was sitting out the early round of prime-time negotiations because its sales chief Keith Turner was preoccupied with his daughter's graduation.

"NBC has publicly stated they're not going to issue plans until next week," one top buyer told MediaDailyNews on Friday, adding, "It's widely known that it's because Keith Turner's daughter has a graduation.

Whether the rationale is true or not was not clear, but the notion that NBC, a network owned by General Electric, a company that prides itself on sophisticated Six Sigma management systems, would base the timing of its most important advertising market around something so subjective as a sales executive's daughter's graduation, is either a bizarre market tactic or an incredibly casual approach to the upfront marketplace.

The ruse is also incredibly galling for agency executives, some of whom have had to put their summer vacation plans on permanent hold until 2004-05 upfront negotiations are wrapped up. But by the end of last week, it seemed evident that many might not need to delay their summer holiday plans much longer.

The network prime-time market began moving briskly, but orderly by the middle of last week, as lead upfront ad categories including movies and autos began wrapping up deals on most networks. Much of the activity was said to be with Fox, and the WB, though buyers said there also was some early activity with CBS, UPN and ABC. Buyers estimated that as much as a third of the anticipated $9 billion-plus in prime-time network upfront.

Given that early activity, some buyers expected that the prime-time sales action could heat up this week and that the market could essentially be wrapped up within days. One puzzling development that could disrupt that momentum, however, was news early Tuesday morning that Mel Karmazin had resigned as president-COO of Viacom. Karmazin was believed to be a key strategist behind CBS', UPN's and MTV Networks' upfront sales plans and was the man the networks' sales organizations were directly accountable to.

One thing was clear, Viacom was coming out especially aggressive in the early round of its upfront negotiations. The initial plans it submitted to ad agencies last week has CBS' prime-time CPMs up 10 percent to 11 percent over 2003-04 upfront ad deals.

Since most buyers believe CBS truly is the new lead prime-time network, the network's early moves are expected to be decisive for the rest of the marketplace, NBC included.

"The expectation is that CBS will set the tone and rest will tuck in behind it," said one top buyer, who nonetheless expected CBS to come down off its early price submissions. A more likely scenario, he said was high single-digit CPM gains for CBS based on its prime-time ascendancy, with the other networks coming in at mid- to lower single-digit gains.

Even so, there was some confusion late last week about how strong the broadcast upfront truly is, and whether the broadcast networks have misjudged the amount of upfront ad budgets that are available to them.

"Most of them have had an early read on the upfront form their cable networks. Viacom with MTV, NBC with USA, etc. And they all got a good first plush impression of where the money stood," said one buyer referring to the strong cable upfront ad demand. "But the big question is how to read that. Was cable up because all the upfront budgets were up, or was it up because of a reallocation of dollars from broadcast to cable?"