• by Wayne Friedman , June 14, 2007

NBC Universal's massive Group M upfront deal may have amounted to an eye-popping nearly $1 billion agreement, but the details of the pact might be less starry-eyed. First, media executives believe NBC got lower cost-per-thousand viewer price increases than the marketplace is currently estimating, in the 6% to 7% increase range over last year's upfront market program pricing.

That would be well below the double-digit CPM increases that networks like NBC were originally asking for next season's programming, according to media agency executives--and lower than what other networks such as ABC, Fox and CBS, realistically hope to get, in the 8% to 9% range.

Secondly, Group M's deal with NBC might not be a trend for the market as a whole. NBC isn't in the best of situations--being in fourth place among the big four networks, as well as recently undergoing a change in senior programming chiefs. Group M's decision to go to NBC was a price opportunity, say executives.

Third, while a billion dollars sounds big, veteran media agency executives say an $800 million deal actually isn't that large. One executive says $600 million could go to the NBC network; about $200 million for the USA Network cable group; approximately $20 million for Telemundo; and finally perhaps $10 million for all NBC's digital platforms.

This isn't to say there weren't gains by both parties. NBC may not have gotten the big price increases, but considering the network had perhaps the highest--along with Fox--average CPM program prices among 18-49 viewers, getting a 6% or 7% increase is pretty good, especially if ABC and Fox grab 8% or 9% CPM increases.

"It's not so terrible," says one veteran cable advertising sales executive. "Everybody got something. It's a realistic reflection of the marketplace."

From Group M's point of view, it got NBC and its cable networks to agree to upfront deals being based on the commercial ratings plus three days of DVR playback metric.

Another media executive merely shrugged when hearing about the deal. "The dollar volume is under-whelming," said one executive. "The deal isn't a shocker. Group M is hoping this kick starts the market."

Group M wants the rest of the industry to rally around its commercial ratings plus three days of DVR viewership metric. Group M has been vocal that this apply not just to broadcast networks, but all cable networks as well.

Commercial ratings have been a point of contention for many cable networks, saying they would rather stick with deals guaranteed on program ratings--at least until next season, when there is more research to analyze.

The NBC-Group M deal includes all media units at NBC Universal, including digital platforms as well as brand entertainment deals for some 60 to 75 upfront clients that Group M represents through its agencies, including its big three--MindShare, Mediaedge:cia, and Mediacom.

Executives say NBC syndication shows could be included in some future part of the deal.

Group M and NBC spokespeople would only confirm that a deal had occurred between the two--but not any details.