• by Wayne Friedman , November 30, 2005

With about two months to go, NBC still has a $150 million to $200 million advertising sales shortfall for its Torino Winter Olympics--which, according to media executives, could put NBC in a bind as well as having a ripple effect on other networks.

NBC's Torino Olympics, scheduled to start in February, will come in a marketplace that is still not totally warmed up in terms of major short-term scatter TV advertising dollars--with NBC still on the ropes in terms of ratings under-delivery commitments that need to be made to advertisers.

Right now, for example, in the November sweeps, NBC is posting a Nielsen Media Research 3.2 rating/8 share in the adult viewers 18-49 ratings race--down a big 18 percent versus a year ago.

NBC will be looking to make deals--which could mean some discounting. While this seems to be a headache for NBC, now advertising executives are saying that it could affect first-quarter scatter business for other networks.

"They'll take some money out of the market," said Aaron Cohen, senior VP-director of national broadcast for Horizon Media.

"Since the Olympics is more expensive than other programming, it's going to chew up more of the available money," said Lyle Schwartz, senior vp and media research director for Mediaedge:cia. A senior cable network advertising executive agrees that NBC's shortfall will hurt cable networks in the first quarter.

NBC's Olympics goal is around $800 million--an advertising target that is somewhat lower than other Olympics. Hurting NBC is its less-than-enviable sales position in prime time. This is the first Olympics in years that NBC has sold the big sporting event without a powerful prime time to be used as leverage in bringing in more advertisers.

NBC could also be looking to make deals guaranteed by a new rating product offered by Nielsen, called "Shifted Average Audience" estimates, or SAAs--which goes beyond the initial playback of a DVR-recorded show to include all subsequent playbacks.

An NBC spokesman didn't return phone calls by press time. Against this backdrop, TV's first-quarter scatter market activity has started--first-quarter selling usually starts the day after Thanksgiving.

Horizon's Cohen says it is too early to get a read, but expects a continuation of a moderate fourth-quarter scatter market. "There was more money in the fourth quarter than anyone expected," he said.

Media agency analysts reported that the fourth quarter witnessed a 3 percent to 6 percent gain in cost per thousand viewers (CPM) pricing versus that of the upfront selling period in May/June of this year.

Typically, the big four networks look for $100 million to $200 million per quarter from advertisers. Weak Olympics sales will only complicate this formula. NBC will cause other networks to recede from launching major programming moves during the 19 days that NBC airs the Torino Olympics from February 10 to February 28.

"The other broadcast networks are not going to put on their best programming against the Olympics," said Mediaedge's Schwartz. With that in mind, media analysts say, overall non-Olympic gross ratings points will be down versus a year ago in the first quarter--enough that non-NBC network sellers will see total scatter revenue flat to slightly down versus the similar period in 2004. Adding in scatter Olympic sales activity, however, will mean flat to a slight rise in TV advertising revenue for the period.

Joe Mandese contributed to this story.