• by Wayne Friedman , July 23, 2009

TV's upfront ad market has finally started to churn -- forced to move, in part, because of timing issues as the start of the fall season nears.

"Things are moving," says Aaron Cohen, chief media negotiating officer for Horizon Media. "[But] nobody will speak a word about deal levels."

So far, media buying and selling executives estimate that about 20% to 30% of broadcast upfront inventory has been committed to by TV advertisers -- somewhat lower levels of sell-out for cable networks.

All this comes a day after Ben Silverman, co-chairman of NBC Universal Entertainment, speaking at a West-Coast digital event, said the long-rumored NBC Universal/Group M deal had in fact "closed" -- only to be refuted by NBC spokespeople later.

"Things have been slowly and very quietly getting done for a while, I am now hearing," says another veteran media executive. Rumors have abounded that cable networks have been slowly inking some deals at modest cost-per-thousand (CPM) pricing rollbacks, anywhere from 5% to 9%. Now, according to executives, some broadcast networks are making a few deals.

Cohen figures that upfront deals will be completed in two weeks. "They have to be," he says, considering it is only a month and a half away from the start of the season. Program presentations need to be sent and reviewed by advertisers.

TV advertisers had been adamant about getting double-digit price decreases from many TV networks. But media agency executives say that will not come to pass. As has been reported, they estimate there will be some rollbacks, in the 2% to 7% range -- with CBS and Fox grabbing the lower end and NBC getting the worst declines.

Unlike previous years, there has been a huge time gap between the registering of budgets by advertisers and actual deal-marketing. Networks have known for weeks what the advertising volume levels of the market will be because of those registrations. TV advertisers had been resistant on only modest price declines.

Now, media executives say TV advertisers have succumbed to the pressures that pricing rollbacks will not be as extensive as initially realized. There is also the time squeeze -- the fall season of programming starts in mid-September.

In regard to the NBC/Group M deal, more than a number of executives now believe it was done some weeks ago. Neither side is commenting.

Key to that deal is a stronger NBC Universal cable channel, USA Network -- which is estimated to be incurring only minor price cutbacks, anywhere from 2% to 5%. One executive says doing an early deal with USA Network should be an easy decision: "Its ratings are high, and the costs [to advertisers] are low."

The executive believes USA Network may be further sold than other cable networks, perhaps as high as 50%.

Many media executives say information flow has been closely guarded this upfront. Delivering the new information, that price decreases aren't as severe, "would be very embarrassing to explain to the client," according to one executive.

Media insiders believe that broadcast will be down 20% in overall volume from the $8.7 billion in 2008 that advertisers committed to a year ago. Cable networks will be 15% lower than its $7.1 billion levels of a year ago.