• by Wayne Friedman , David Goetzl  @dgoetzl, June 16, 2006

Despite networks such as Fox and CBS making aggressive plays to boost ad revenue volume--and ratings-challenged NBC desperately trying to pull in the same amount as last year--the upfront is likely to end up with fewer dollars committed than last year.

With about 40 percent to 50 percent of all inventory sold so far, total dollars are now expected to fall some 5 percent to about $8.4 billion. But as experts have found out, nothing is certain in this marketplace. The wild card is still ABC--it is just starting to move, and could help the market eke out an overall increase with a strong performance.

The market garnered an estimated $8.9 billion last year. The would-be $500 million drop can be attributed to a range of factors from the CW not pulling in the same amount as the combination of UPN and The WB (CW is a merger of the two networks) to advertisers holding money back for scatter or other opportunities to an uncertain economy and higher oil prices.

Networks' volume grabs appear to be at the expense of CPM growth. While Fox maintains that they are getting CPM increases of 2 to 3 percent, others say some deals are being done at flat levels. CBS, which had a challenging year in the 18-to-49 demo, is said to be doing deals at flat pricing or in some cases, a negative 1 percent--although Chairman-CEO Les Moonves said this week he expects the network to get CPM gains. NBC's expected rollbacks are said to be in the 5 to 7 percent range, but could be closer to 9 percent in some instances.

ABC, on the backs of improved ratings and some blockbuster hits, could command up to 4 percent CPM jumps. That would place it higher than deals done at the high end at Fox. This would be in line with expectations that ABC would lead the market.

However, in a sign of just how murky upfront information is as rumors, innuendo, and spin permeate the media world, Moonves this week acknowledged the less-than-revealing volleying that goes on between buyers and network representatives. "It's a very interesting PR thing that goes on where the advertisers always say, 'Down CPMs' and we always say, 'Oh no, way up,'" he said. "And the truth is somewhere in the middle."

News Corp.'s Peter Chernin blamed the middlemen, calling the coverage by the press so far extremely "misguided."

One of the reasons for the varying reports about CPMs is that each network is indeed making deals at different levels based on variants such as dollar commitments, historical relationships, and commitments to other dayparts. For example, some media buyers and sellers insist that in order to prop up prime-time CPMs, CBS is sacrificing other dayparts by cutting package deals with CPMs cuts there.

Representatives for Fox, CBS, NBC, and ABC declined comment.

Merrill Lynch projects the Big 4 networks to post an upfront with a 4 percent volume increase, but when expanded to six networks--with CW and MyNetworkTV added in--it becomes flat.

Meanwhile, the cable market is yet to move into high gear (a smattering of deals are done), although it's expected to accelerate next week as the broadcast market wraps. Several cable sales-side sources said budgets are being registered and dollars are up.

Although ABC was in prime position to lead the market, the network was slowed by the debate over whether buyers would pay for DVR viewers, then got into some battles with buyers over programming mixes. Depending on the executive, ABC may have done 15 percent of its upfront deals or as high at 25 percent, but those figures may be high. Media buyers say there are still many agencies left to move for ABC.