Tough Economic Times Yield Strange TV Advertising Decisions -- And Lawsuits

Growing TV stations and networks will do the unusual to lift advertising sales.

WADL, in the Detroit DMA, allegedly wrote a check for $1.5 million last April to Petry Media's Blair Television sales rep division, with a promise that WADL would get more than that from big national spot sales revenues.

Since October 2007, when the agreement was signed, WADL says only $253,000 has been booked by Blair -- well below its supposed guarantee. WADL admits it is atypical for a TV station to write a check to a rep firm -- let alone to pay an upfront fee of $1.5 million.

Perhaps small stations are not the only outlets desperate enough to make such an agreement. Struggling local media outlets -- TV, radio or newspapers -- will take big chances to get big advertising sales. WADL was a small station in a big market looking to grow out its virtually all-infomercial format.

Let's be realistic. The marketplace -- especially the local TV market -- has seen a plethora of bad news in recent months.  All this is not to discredit the station's assertions, especially if promises were indeed made.

Admittedly the deal was made well before the economy started to tank. Yet we have a lawsuit by a TV station's owner, Adell Broadcasting Corp., against a national TV rep firm that, according to one report, accused "them [Blair] of accepting the fee."

I haven't seen the lawsuit. But I can't imagine anyone twisting Adell's arm in signing that agreement. They didn't have to "accept" the deal either.

We have seen station group bankruptcies, stock market de-listings, billion dollar write-downs, and other financial machinations. Trending into 2009, expect more unusual advertising decisions in the months to come.

Some predictions:

 -- Cash back? Some networks/stations are bound to get in a big hole coming from too-good-to-be true ratings guarantees.  Make-goods will only take you so far.

 -- Lawsuits by marketers against the media? Not likely. Yet you have some incredible statements by major TV advertisers like Procter & Gamble saying it wants to renegotiate all its media contracts because of the economy.

 -- More infomercials in prime time?  Hey, some of the biggest TV networks like NBC say it's all about "margins."

Perhaps that's a germ of an idea for a TV show -- about a financially troubled executive living in these rough economic times. Call it "Living in the Margins."

I'd bet TV advertising sales and buying executives would be its core audience



2 comments about "Tough Economic Times Yield Strange TV Advertising Decisions -- And Lawsuits ".
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  1. Walter Graff from Bluesky Media, December 22, 2008 at 10:57 a.m.

    Sometimes you have to take your old hat off and look at the future in a different way. Everyone is waiting for the stock markets "return" failing to see that fundamental ways of operation have changed so that "wait" will be long and disappointing. The same is true for Television. Some fundamental changes in the way we operate are different, changed, old ways gone forever. So expecting things to return to "normal" will see a lot of disappointed faces. It's a new world, and we haven't found solidity and structure yet. We will and somethings will be the same and others very different. Be prepared!

  2. Paula Lynn from Who Else Unlimited, December 22, 2008 at 8:26 p.m.

    "Follow the money." as they say in Washington....ay

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