In Depth

NBC Finally Gets Into The Fray of the 2011 Upfront Marketplace; Also, Turner Testing the Upfront Waters

By Brian Steinberg
Advertising Age

NBC has begun writing "upfront" business in earnest, the last of the big broadcast networks to get under way in this year's haggling, while Time Warner's Turner has begun feeling out the marketplace with an initial but aggressive bid for pricing.

NBC had been holding back in the marketplace, according to ad-buying executives, trying to see if it could secure CPM increases in tandem with the lower end of the range notched by rival networks. Walt Disney's ABC has been writing some agreements with increases in the cost of reaching 1,000 viewers (or CPM) at around 10% or higher, according to ad buyers and other people familiar with the negotiations. NBC is doing some deals in the range of 9%, according to these people. Each year in the "upfront," TV networks sell the bulk of their ad inventory for their coming prime-time schedule.

The Peacock network has been pitching a story of revival, after seeing ratings decline for the past few seasons as well as a lot of churn of the executives who develop its prime-time schedule. Like the rest of NBC Universal, NBC is now controlled by Comcast Corp., which has pledged to invest more strongly in programming and has stated that a turnaround of the NBC broadcast network could take a few years' time.

NBC starts up in what has so far been a relatively robust market. News Corp.'s Fox has already completed its negotiations, doing a large part of its business with CPM increases of 10% to 11%, and securing $1.98 billion to $1.99 billion in ad commitments. CBS Corp.'s CBS has started doing some business with CPM increases ranging between 13% and 15%, according to ad buyers and other people familiar with the tone of discussions. CW, the network owned jointly by CBS and Time Warner, is said to be nearing completing, doing deals with CPM increases ranging between 10% and 12%.

Until this week, negotiations with cable networks had been relatively quiet. Yet one buyer and another person familiar with the situation said Time Warner's Turner had made an initial offer to several buyers asking for CPM increases ranging between 14% and 15%, a move one buying executive described as "aggressive." Like CBS, which made an initial ask last week seeking 18% price hikes, Turner may be simply testing the waters, knowing that if you don't ask for a certain price, you'll never get it.#