The current network TV scatter advertising marketplace has become very flexible, according to top media buyers, and the outlook for the 2020-21 upfront may be one of the lightest ever in terms of the percentage of network ad inventory sold. That's the finding of "ad checks" conducted over past week with top industry executives by the equities research team at BMO Capital markets.
"Broadly, networks are working flexibly with long-term advertising clients and not strictly enforcing commitments or contract terms," writes BMO analyst Daniel Salmon in a note sent to investors.
He added that all eyes are on May 1, which is the deadline for third quarter options, when upfront advertisers have the right to cancel as much as 50% of last year's ad buys for the third quarter.
"Those with a view into the upfront expect volume to be more in the 40% to 60% range of total inventory, versus more typical portions sold in the upfront, likely closer to 70% to 80% normally," Salmon said, adding, "With the lack of new pilots and visibility into live sports, one speaker noted they think upfronts will functionally turn into a series of short-term/quarterly guarantees across a TV network group, rather than for specific shows."