Keeping to its word, NBC will hold a brief upfront programming presentation on April 2 in New York City. NBC, the fourth-place network among 18-49 viewers, has said it would unveil not just a fall programming lineup but a 52-week schedule. The invitation listed Ben Silverman and Marc Graboff, co-chairmen of NBC Entertainment and Universal Studios; Mike Pilot, president of NBC Universal sales and marketing; and Marianne Gambelli, president of Network Ad Sales. The invite said the event, at NBC's New York offices, would run an hour, 1:30 p.m. to 2:30 p.m., with a half-hour question-and-answer period to follow. The April 2 meeting is somewhat similar to the May press briefing NBC does in the morning before its typical big afternoon major multi-hour program presentation to media executives at Radio City Music Hall. On May 12, the company will instead hold a toned-down upfront presentation that includes not just the NBC network, but all NBC Universal's different media properties. NBC had also said it would hold individual meetings with ad buyers and marketers afterward. Last year, NBC network did $1.8 billion to $1.9 billion in upfront deals in June 2007, about the same as it inked a year before.
Noting the critical importance of cable, and hoping to keep a key executive happy, NBC Universal named Bonnie Hammer president, cable entertainment and cable studio. Hammer had served as president, USA Network and Sci Fi Channel, since May 2004. She will continue to oversee these networks, reporting to Jeff Gaspin, president and COO, Universal Television Group, and Jeff Zucker, president and CEO, NBC Universal. Under Hammer's leadership, USA Network and Sci Fi Channel have performed exceptionally well. USA Network was the No. 1 basic cable network for the second year in a row in 2007. Sci Fi finished the year as the sixth-ranked basic cable network and had its best year yet among 18-34s. Hammer will now oversee NBC Universal Cable Studio, which is responsible for hit USA shows such as "Monk," "Psych" and "The Starter Wife," as well as Sci Fi's "Battlestar Galactica" and "Eureka." In addition to developing new scripted shows for the cable group, she will oversee NBC Universal's successful Emerging Networks, which includes Chiller, Sleuth and Universal HD. "Bonnie's achievements with USA and Sci Fi have been spectacular," said Zucker. "She's a multitalented executive who knows how to run a network, program it successfully, and inspire a team." Said Hammer: "It's an exciting new opportunity not only to manage creative assets from concept through development to final product, but also to help realize the enormous potential of the Emerging Networks group." Hammer led USA Network's "Characters Welcome" branding initiative and directed cable entertainment's first foray into the digital social networking space with ShowUsYourCharacter.com. Before joining Universal Television, Hammer was an original programming executive at Lifetime, producing several award-winning documentaries. Prior to this, she executive-produced "Good Day!" for WCVB in Boston, and produced the series "This Old House," "Infinity Factory" and "Zoom" for PBS.
One of the largest private equity buyouts ever of a major media company appears to be in jeopardy, as Clear Channel Communications' suitors, Thomas H. Lee Partners and Bain Capital Partners, find it increasingly difficult to raise the money needed for the acquisition. The failure of a $19.5 billion deal, first reported on the Wall Street Journal Web site late Tuesday, would undo 15 months of planning and negotiation. An unnamed source cited by the paper, said the private equity firms remain committed to the buyout, scheduled to close March 31st, but the banks tapped to lend the money -- Citigroup Inc., Morgan Stanley, Deutsche Bank AG, Credit Suisse Group, Royal Bank of Scotland Group and Wachovia Corp. -- feel it overvalues the company substantially at its current stock price. The private equity firms are offering $39.20 per share, a 20% premium over Tuesday's closing price of $32.56 and almost 52% premium over the after-hours trading price of $25.82. The banks would pay a high price for refusing to honor agreements to finance the deal, including expensive lawsuits and considerable damage to their reputations. The fact that they may still walk away suggests very deep reservations about financing the buyout, as credit markets tighten in the wake of the sub-prime mortgage meltdown. Their worries are compounded by the fact that the radio business seems to be suffering a secular downturn amid general fears of an economic recession. Clear Channel Radio, the largest radio group in the United States, said revenues fell 3% in the fourth quarter of 2007 compared to the same period in 2006, to $874.6 million, and in late January CEO John Hogan ordered a freeze on new hires and cut out research and ad spending entirely for the remainder of the first quarter, effective Feb.1. In a memo to employees explaining the freeze, Hogan conceded that, "No one anticipated how challenging Q1 would be for us," suggesting more bad news may be on the way. The bankers might not be the only ones getting cold feet. For months, rumors have circulated on Wall Street that the private equity companies themselves wanted to walk away from the deal. According to a separate report in the New York Times on Tuesday, the six-bank syndicate recently demanded stricter terms for the giant loan, but Lee and Bain refused, lobbing the ball (and financial burden) back into their court. The failure of the deal due to the company's low stock price would not be without irony, coming after long delays caused by investors who demanded higher prices from the private equity companies for the buyout. In November 2006 Lee and Bain first offered $37.60 a share, a roughly 25% premium over the previous six months, when the stock had gyrated between $28 and $32 a share. Protracted negotiations to raise the share price delayed shareholder approval by ten months, to September 2007.
People outside the newspaper business (and even insiders) could be forgiven for finding the recent flurry of online network deals confusing. QuadrantOne's expansion last week highlighted the complexity, as competing newspaper networks sometimes overlap, producing strange bedfellows. But in the end, the governing principle is the same--an increasingly desperate "show me the money!" Before the arrival of the Internet, the Newspaper National Network provided a model for newspapers cooperating in a national ad network, using a single point of contact to make large-scale buys easier for national advertisers. In 1995, the same logic led Tribune, Gannett and McClatchy to found CareerBuilder, an online network for recruitment classifieds. Newspapers were already losing business to free services like Craigslist, and publishers figured they could make their online classifieds more appealing by scaling them up, offering national reach to both employers and job-seekers. CareerBuilder welcomed smaller newspapers and other Web publishers as affiliates, but only in exclusive relationships, meaning they couldn't share their classifieds listings with other sites. However, as business models evolved on the Web, and open partnerships became more common, CareerBuilder's seems to be losing some of its appeal for affiliates, according to Ken Doctor, a newspaper analyst with Outsell, Inc. Doctor explained that some newspapers were lured away by competing networks like Yahoo's HotJobs and Monster.com, which offer non-exclusive partnerships. The open, hybrid model offered by Yahoo and Monster.com extends the distribution of newspaper classifieds in the same way, without blocking publishers from peddling their listings elsewhere if they wish. Yahoo's newspaper alliance launched in November 2006. In the meantime, the network model was spread from online classifieds to display advertising, where newspapers can also benefit by offering advertisers combined national reach. Yahoo's HotJobs newspaper alliance proved to be just the first phase of a three-phase project to build a Newspaper Consortium, in which Yahoo would help newspapers sell display ads and newspapers would share local news with the Web portal. Here's where the mixing and matching begins. While McClatchy retains its stake in CareerBuilder, and won't share classified listings, it did sign up its papers for the second and third phases of the Yahoo consortium--cooperating with Yahoo in one arena while competing in another. Of course, with the growth of open partnerships, Yahoo isn't the only player in display ads for newspapers. One platform, Centro, offers some of the same advantages of a network chiefly by aggregating local newspaper Web sites into a single point of purchase for national advertisers. Predictably, many newspapers in the Yahoo consortium also participate in Centro's system. Now there's QuadrantOne, another national network launched in February. With a similar non-exclusive appeal, there's no reason for newspapers not to join QuadrantOne, which could help them boost display ads. But the proliferation of online networks begs the question: What's the difference? "Of course they will all tend to overlap and compete against each other," observed Doctor, "and that's really the point, for newspapers." Using yield management measures, Doctor said newspapers should be able to manage their relationships with the networks "to see where they can they fetch a higher CPM, and the best deal in terms of the percentage of revenue."
Sirius Satellite Radio and XM Satellite Radio got their biggest boost to date on Monday with the Department of Justice's approval of their proposed merger, which removes one of the last remaining regulatory hurdles for the deal. However, the merger still requires approval from the Federal Communications Commission--whose chairman Kevin Martin has blown hot and cold on the subject, and may make a couple of demands of his own. During its deliberations, the FCC has come under intense pressure from Congress and lobbying groups like the National Association of Broadcasters, which is bitterly opposed to the deal. It argues that the satcasters' merger is monopolistic and won't benefit consumers. Chairman Martin has been castigated by members of Congress and consumer advocates for taking an overly permissive stance on media consolidation in general over the last year. He's already in the political doghouse for rushing through rule changes that relax restrictions on cross-media ownership, and faces an ongoing investigation by the House of Representatives' Energy and Commerce Committee. The investigation was instigated, in part, by the complaints of Martin's two Democratic colleagues on the five-person FCC--a hint of how rancorous deliberations have become behind closed doors. So while Martin is unlikely to go against the DOJ decision, it's quite possible that he will append some conditions that will mollify his opponents in Congress and fellow commissioners. While the NAB continues to oppose the merger outright, terrestrial broadcasters are hedging their bets with a somewhat softer compromise offer. As a condition for the merger, the HD Digital Radio Alliance has demanded that Sirius and XM receivers be required to include chips to pick up HD broadcasts. While Sirus CEO Mel Karmazin opposes this plan, Martin could sell it to Congress and the public as a victory for consumer choice. Martin could also demand even greater flexibility in the satcasters' proposed a la carte subscription plan--allowing consumers more choice, lower fees, or both. Finally, Martin could also support another HD Digital Radio Alliance demand that both satcasters cancel their exclusive agreements with automakers, which represent the main future growth area for satellite radio. This would open up opportunities for HD radio manufacturers to push their own product, thus building their "installed base" of receivers.
If networks have questions about what will work when TV shows come back in full force next month, just talk to CBS. The net scored by putting Britney Spears in prime time. Spears, guest-starring in CBS' "How I Met Your Mother," pushed the show to its season's best rating: a 4.5 rating/12 share among 18-49 viewers. Spears has already spread the wealth to TV outlets. When her marriage and crazy antics hit the tabloids, the ratings for syndication magazine shows soared. CBS got some Spears spin this time. Along with a new episode of "Two and a Half Men"--which earned a 5.1/13 rating--and a new "CSI: Miami" episode, which took in a strong 4.8 number, CBS took a somewhat surprising Monday win. CBS averaged a 4.4 rating among adults 18-49 for the night. All this bested what was thought to be ABC's night with a two-hour "Dancing with the Stars." The show, which has given ABC good fortune--especially on nights when it is not running against "American Idol"--took in its steady 5.2/13. This wasn't ABC's only downfall. A sub-par "The Bachelor: London Calling" earned a slow 2.9/7, losing a good chunk of the lead-in viewers for "Dancing." That landed ABC in second place, averaging a 4.2/11. NBC and Fox tied for a distant third at 2.4/6. NBC's best came from "Deal or No Deal" at 9 p.m. and "Medium" at 10 p.m. Each grabbed a 3.0/8. At 8 p.m., a new NBC reality show was barely noticed. "My Dad is Better than Your Dad" took a 1.2 rating. Fox wasn't big on the night either--but it wasn't really trying that much. A "House" rerun earned a 2.7/7, while its new drama "New Amsterdam" continued to look like history--only a 2.0 rating. Univision was fifth at 1.7/4, and CW took sixth at 0.6/2.
The Hallmark Channel has released a study it commissioned indicating the baby-boomer audience it attracts accounts for significant buying power. The network hopes that finding will seed some doubt among media buyers that the 18-to-49 demo may not be as critical to reach as conventional wisdom holds. Furthermore, the study (by Millward Brown) shows that baby boomers (described as the 35-to-64 demo) are more "engaged" with the TV screen and less likely to switch the channel--a likely consequence of less familiarity with tech-forward products such as a DVR. Data does show that the Hallmark Channel has very little audience erosion during commercials and performs well in the new "C3" ratings, which take into account DVR-enabled commercial-skipping. The study was conducted via telephone and included some 1,200 cable and satellite viewers. On the DVR-usage front, it found that some 55% of boomers feel that new technologies, such as the time-shifting devices, are "complicated," while only 31% of the younger millennial, 18-to-34 demo felt so. Also, 45% of millennials use DVRs "regularly/fairly often" compared to 24% of boomers. And 87% of millennials indicated that when they use a DVR, they make regular use of the fast-forward functionality. One argument circulated about the benefits of targeting 18-to-49 year-olds is their presumed brand loyalty. But the research would seem to contradict that, showing that 61% of boomers feel that in today's marketplace, "it does not pay to be loyal to one brand."
Hal Riney, the San Francisco-based ad executive who built and sold his namesake agency to Publicis Groupe in 1998, died Monday. He was 75. Riney help craft brands ranging from Gallo wines to Saturn automobiles, but is perhaps known best for helping to shape one of America's greatest political brands: Ronald Reagan. As a member of Reagan's so-called "Tuesday Team," he played an integral role in electing and reelecting the two-time President of the United States. He was the voice behind colleague Phil Dusenberry's memorable "Morning Again In America" spot that epitomized the Reagan reelection campaign, and created the "There's A Bear In The Woods" spot, an effective allusion to the lingering threat of the Soviet Union, that some say was the turning point in the campaign. Among other things, Riney was also responsible for accelerating the career of David Verklin, a bright young executive in Young & Rubicam's media department, whom he recruited to become Riney's media director, and who ultimately became the agency's manager before being raided by Aegis Group to run Carat.
Wandering through the mall monstrosity attached to the Renaissance Hotel in which the OMMA Global Hollywood conference was held, I saw a group of tweens gleefully kicking one of those ground-based ads that change when you step on them. I asked the kids to look up for a second--and without peeking--tell me what the ad they were beating to death was about. Not one had a clue. That pretty much sums up my takeaway from two deep dives into the Digital Frontier this month. (The other was the 4As conference in Florida.) I missed the Ad Age "digital summit" in New York. And I just got an email about yet another one from Min. If I were in media or marketing, I'd start a digital summit business. Anyway, I had two weeks of media industry antics to get up to speed on, so I fired up the laptop and surfed the cyber-waves for something new to write about. And you know what I discovered? Yogi Berra once noted: "When you come to a fork in the road, take it." But when American media and marketing come to a fork in the road, they impale themselves on the fork. Ergo, a digital drifter is confronted with a frothing tide of listless commercial communications and tepid entertainment options (not including the digital summits, of course). I read a story on the Los Angeles Times site about how summer house rentals in Malibu are going as high as $150,000 a month. This was played up as prominently--more prominently when local TV got its hands on the story--as the announcement that the death toll for U.S. soldiers in Iraq has reached 4,000. Another milestone in the unmaking of an informed populace. Bank of America moved its media to Starcom two years after launching an all-Omnicom marcom team, saying reliance on only one holding company had hamstrung its efforts. Who could have seen that coming? Everybody but BofA, I imagine. Mitsubishi launched a creative search, and three-year incumbent BBDO said it would not defend. The fact that Mitsubishi loses marketing executives faster than Hillary Clinton changes campaign strategies probably had something to do with the review. Two more triumphs for agency scapegoating. Speaking of nasty clients, the Ad Age site reports that Chrysler's Deborah Wahl Meyer is recruiting 2,000 consumers to tell the alleged automaker what to do. Here's a hint: Make cars that don't break down after 35,000 miles. And so much more: Twitter looks poised to replace social networks as the next thing the industry will get hysterical about. Alex Bogusky wrote a column for Adweek congratulating himself for living in Boulder. A deaf actress, Marlee Matlin, is the frontrunner on "Dancing With the Stars." Online, nobody can hear you scream. But I found relief in the news that a Vanderbilt University study found aggression to be as rewarding as sex, food and drugs. So I'm going to reward myself by posting anonymous blogs about creative executives on Nina DiSesa's Web site and going back to the Renaissance Hotel to find those tweens--and beat the living hell out of them.