CBS, affils get high-pressure ad sales pitch

Jun 4, 2001  •  Post A Comment

When the going gets tough, sales managers at CBS and other Viacom broadcasting properties had better get tougher.
That was the word from Viacom President and Chief Operating Officer Mel Karmazin, who said, “Most of our sales managers are wimps” for selling ad inventory at lower prices than last year, before the bottom had fallen out of the ad market.
“There’s always somebody who can sell it cheaper,” said Mr. Karmazin, who is adding personnel and pressure to Viacom’s sales organizations to keep the media giant on target to make $25 billion in revenue, leaving $3 billion in free cash flow, this year.
As long as national magazines are getting higher costs-per-thousand to reach fewer people, and while ads fill local newspapers that people spend less time reading than they do watching TV, Mr. Karmazin said he’s “never going to accept from our salespeople that their numbers are down from last year.”
Last year, the networks took in a record $8.2 billion in an upfront blitz that lasted less than a week.
This year, when some analysts predict a decrease of perhaps $1 billion, Mr. Karmazin vows to wait out the advertisers who are crying poor now and let them pay higher prices in the scatter market during the 2001-02 season, which he predicts will be “really strong.”
“There’s an awful lot of posturing going on right now between advertisers saying they don’t have any money and broadcasters sitting there saying, `We ain’t going to sell it to you cheap.’ So we’ll see what happens and who blinks.”
Mr. Karmazin said last week’s record deal in which Procter & Gamble will spend $300 million in one year to advertise across Viacom’s platforms is proof “it really is possible to convince large companies to spend money with us.” But he said consolidation on Madison Avenue has made it harder to leverage advertisers. However, he said, “There are many more [deals] coming up.”
In a ballroom full of some 340 affiliate representatives at odds with the network over a number of issues, including the networks’ determination to raise the federal caps on station ownership, Mr. Karmazin’s complaint was fraught with the same subtext that rippled throughout the two-day gathering-both sides determined to be more agreeable even as they continue to disagree.
The rhetoric, Mr. Karmazin said at lunch, “is probably something we can immediately improve on.”
Mr. Karmazin, CBS Television President and CEO Les Moonves and Affiliate Relations President Peter Schruth had played host to a select number of station-group executives at a private early-morning breakfast designed to close the rift that had blown wide open in March, when the Network Affiliated Stations Alliance petitioned the Federal Communications Commission to investigate a number of network practices.
CBS, particularly stung by not being alerted to the filing by its affiliates advisory board, pulled out of the National Association of Broadcasters-which it told affiliates last week it will not rejoin-and asked the affiliate body to reformulate the board. The network would prefer to see more station owners and fewer station managers on the board.
The affiliates rejected the network’s proposal. The network said it will work with the existing board, which was present for the “candid” and “very constructive” dialogue at the station-group chiefs’ breakfast.
“I think it was a return to the process of senior people trying in the best of faith to find business solutions to business issues,” said Andy Fisher, president of Cox Broadcasting and one of the principals in the NASA movement. “And I hope there will be a lengthier effort to see how many issues can be resolved in a fashion to allow the stations and the networks to focus on what really counts, which is the competition against all the other people trying to get our eyeballs and our ad dollars.”
“Having two avenues of discussion is really a smart strategy,” said Alan Bell, president of Freedom Broadcasting, “because you’ve got low beams that are scanning the highway right in front of you and high beams scanning the highway thousands of feet ahead. I applaud it and look forward to continuing that dialogue.”
Mr. Schruth-who described the ownership cap, which Viacom, NBC and News Corp. are fighting in court, as “a core nonagreement” issue-said another group-network meeting will be called “in the near future,” probably in New York.
He also said that CBS, the only network that didn’t cancel its traditional bash in the wake of the NASA filing, is likely to hold a similar gathering again next year.
Here’s a summary of the two-day meeting:
Mr. Moonves set the tone for the convention by addressing the NASA filing head-on. “To be honest, we think we got a bum rap,” he said. “What works for us works for you,” especially the 35 CBS and UPN stations that “face the same kind of marketplace pressures.”
He boiled down the network’s support on key issues: the “assured transfer of affiliations to qualified buyers,” “reasonable pre-emption caps for compelling local programs,” “reasonable and limited repurposing of network programs,” a “collaborative approach to the utilization of unused spectrum” and “agreement to disagree on the ownership cap.”
Mr. Moonves and CBS Entertainment President Nancy Tellem reprised their upfront presentation, with jokes intact and with frequent references to momentum. The big hit: extended clips from Jerry Bruckheimer’s “The Amazing Race,” a reality show in which 11 teams of two race to beat each other from continent to continent. CBS hopes “Race” will do for Wednesdays what “Survivor” did for Thursdays last season.
“It just kind of sucks you in,” said Ben Tucker, president of Fisher Broadcasting Co.
New media
Marty Franks, executive vice president of CBS Television, said the network has a “prudent and tactical game plan” that is growing its Internet operations to record traffic levels and that can accommodate affiliate participation by year’s end, if affiliates respond positively.
The plan would involve access to content throughout Viacom “on an a la carte basis” with nominal charges.
“Much of the dot-com sector may be in tatters, but does anyone think the Web is not here to stay, just awaiting a better business model and companies with the ability to execute? … A joint Internet effort can still be good for our business and a good business,” said Mr. Franks, who acknowledged that previous network efforts along these lines, while well-intentioned, had suffered “fits and starts.”
He also said interactive programming like the network’s efforts with freshman hit “CSI” and some sports and special events, is another area CBS hopes it can “develop and exploit” with the affiliates.
He touted the network’s lead in HDTV production and said both CBS and the local stations “can do a better job of selling it” in high-traffic venues and coming up with creative ideas for advertising and promotion of the high-definition format.
He asked the affiliates not to sell off chunks of their digital spectrum to data resellers, because it limits the ability to transmit HD programming, “the one current digital business plan capable of generating a profit.”
CBS News President Andrew Heyward got assists from “Evening News” anchor Dan Rather (in Las Vegas) and “The Early Show” co-anchors Jane Clayson and Bryant Gumbel in pitching ratings improvements.
“Mornings are finally on the upswing,” said Mr. Heyward, who added, “The best is yet to come,” with “The Amazing Race” expected to boost Thursday mornings as “Survivor” has done for Friday mornings.
Mr. Heyward also discussed News Path, which recently hired a Denver-based reporter and three regional producers. He also said a 20-station beta test of the Web-delivered News Path Now, which will give local stations instant 24/7 access to digital video by summer’s end, is under way.