• by Wayne Friedman , Staff Writer, July 3, 2006

Make it a longer than usual holiday weekend for syndication and cable executives.

Now that the broadcast networks have finished their three-week bumpy upfront ride, the rough road turns to syndication and cable with increasingly disturbing news.

AOL, and possibly American Express, have pulled out of the upfront. Both join Johnson & Johnson, which made its decision some weeks ago. While AOL isn't such a big player by itself (though, its parent company, Time Warner, is), J&J spends plenty across all TV venues--broadcast, syndication, and cable. American Express is also a decent upfront player.

But the problem is more than just three advertisers, as we all know. Marketing budgets are down everywhere. All this means syndication and cable sales executives should start thinking of moving their vacations to September.

There have been soft markets before, which have elongated the upfront process into July and August. But this year, marketers have actually put their money where their mouth and pockets are--that is, on the sidelines.

How high is the damage? For the broadcast networks, some analysts guess it comes to anywhere from $300 million to possibly $600 million. Now estimates are the $8.9 billion broadcast primetime upfront of a year ago could sink to as low as $8.2 billion--with possibly only one network, Fox, improving its overall take versus a year ago,

Unlike other upfront markets that have moved southward because of recessions, this softy comes amidst considerable economic growth (though not stock market growth). The surge is strong enough where the Federal Reserve thinks it needs to cool the economy down with higher interest rates.

Against this background comes a soft upfront. Like the stock market, the upfront is a predictor of things to come--but it isn't a long-term predictor. Last year, for example, the 3 percent to 5 percent gains for the top networks were stronger than this year's, which, at best, come in at 2 percent to 3 percent gains.

At worst? Already reports are that syndication and cable networks could be seeing steep decreases--as much as 5 percent or more for some shows in terms of cost per thousand viewer pricing.

And it's not as if AOL, American Express or Johnson & Johnson aren't going to buy television advertising this year. Johnson& Johnson said it just wanted to start its upfront activities in August. That still means J&J could most likely buy upfront time by September for the full broadcast season.

After the July 4th holiday is over, look for your local syndication and cable sales executive to be consistently available for business this summer.