• by Wayne Friedman , June 6, 2008

With virtually 85% of all broadcast network prime-time upfront deals completed, TV media executives are somewhat surprised that upfront advertising dollars seem to be slightly higher than a year ago. Estimates are that the broadcast prime-time advertising market might climb to at least $9.2 billion.

Last year, the market was $9.1 billion, according to some media estimates. All this comes as the broadcast networks collectively had one of their worst seasons in terms of viewership--losing anywhere from 12% to 15% of their overall viewership.

Still, other executives warn that any rise in upfront revenues will not tell the whole story about the health of the marketplace. The increase may just be a shifting of dollars that would have been spent in next year's scatter market. Or perhaps the networks are selling more inventory. A clearer picture will be established once the scatter markets start up in earnest, beginning in the fourth quarter.

Right now, ABC is on pace to book about $2.5 billion--up from $2.4 billion of a year ago, with some executives saying the network grabbed around 8.5% to 9.0% increases on the cost-per-thousand viewers (CPMs). An ABC spokeswoman did not respond by press time.

An executive close to NBC says the network has finished its upfront deal-making, reaching $1.9 billion--which would be $100 million more than a year ago. In addition, media executives are saying NBC got high-single-digit increases in the 6% to 7.5% range. An NBC spokeswoman declined to comment about the marketplace.

One media-buying executive said of the fourth-place network: "NBC was more reasonable in deals this year, possibly because of the year that it had. With the upfront, sometimes agencies work from the bottom up."

He noted that while NBC did not package cable deals into network buys, there were oral media deal promises made in regard to its cable networks, including USA Network, Sci-Fi Channel, Bravo, and Oxygen.

In regard to the Super Bowl, NBC sold out about 30% of its inventory--or about 18 units. (Around 62 units are typically sold in the Super Bowl). Historically, OMD USA buys anywhere from 12 to 15 spots in the big football game each year for clients. An OMD representative could not comment by press time.

NBC's high-level asking price for a Super Bowl unit--$3 million per 30-second commercial--was overplayed, said one media executive, with just a couple of deals done at that mark.

CBS and Fox are somewhat slower-moving this upfront period, say some media executives, who have yet to complete media buys. Other media executives from two different shops say deals have been completed with those networks, with CBS looking at 7% to 8% price hikes, and Fox taking 8% to 9% gains. CBS was at $2.35 billion, and Fox at $1.9 billion in total upfront revenue a year ago.

CBS and Fox spokespeople had no comment about their respective upfront activities.

The CW is lagging the big five networks in its deal-making. Last year the mini-network took in around $600 million for its upfront activities. This year, it has only 10 hours of prime time to sell versus 15 hours a year ago. (It sold off its Sunday night schedule to a third party).

Media executives say CW is garnering 8% increases on its core CPMs. CW had a tough 2007-2008 season, losing over 20% of its ratings versus the previous season. A CW spokesman had no comment.

Media executives expect all networks to sell off more inventory in this upfront--which would increase networks' overall upfront take. For example, networks typically sold around 75% of their prime-time inventory supplies in the upfront a year ago. This time around, media buyers are guessing that all networks will be around the low 80% level.