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Dec 10, 2001  •  Post A Comment

Posted Monday, Dec. 10, at 11 a.m. (PT); last updated at 4:10 p.m.

McCluggage leaving UPN in Moonves’ hands

In a long-speculated restructuring of management at UPN, the network is coming under the CBS Television unit. CBS Television President and CEO Leslie Moonves will take over the UPN reigns from Kerry McCluggage, who announced that his resignation as Paramount Television Group chief would take effect at the end of January. Viacom and CBS officials said other details of UPN’s reorganization are still being discussed.

While a CBS spokesman confirmed that Mr. Moonves would gain broad oversight of UPN in addition to continuing broad purview of CBS, various sources say a new network head of UPN could also be in offing. UPN’s current chairman and CEO, Dean Valentine, who filed a lawsuit against UPN last summer, is said to be facing a tense, uphill battle in getting his contract renewed beyond its current December 2002 expiration date. That has led to widespread speculation that Greg Meidel, who is currently serving as president of programming for Paramount Domestic Television, could step up as chairman of UPN or Paramount Television Group (in place of Mr. McCluggage).

There is speculation that Jonathan Dolgen, chairman of Viacom Entertainment Group, who Mr. McCluggage reported to, could spread out the Paramount Television Group chairmanship among two or more division heads currently working at Paramount. CBS, Viacom and Paramount had no other comment on the remaining restructuring in store for UPN and Paramount Television Group.

The merger of UPN’s operations under the CBS umbrella, expected for almost a year, comes at a time when both are the only broadcast networks to show strong growth in key young demographics and households. Mel Karmazin, president and chief operating office of Viacom, said the announcement of the UPN-CBS restructuring is the “culmination of a process that began with the merger of Viacom and CBS and realizes new efficiencies to the broadcast business.”

Viacom officials said that UPN and CBS will maintain separate on-air identities and affiliate relationships. Sources say it is still likely that advertising sales, ratings research and some marketing functions could be consolidated under CBS and lead to eliminating redundancies in those areas at UPN. Sources within UPN are also discounting speculation that CBS could seek to repurpose UPN’s “Buffy, the Vampire Slayer” and “Star Trek” prequel “Enterprise” to help offset major programming investments in those and other shows — due in large part to higher residual payments and potential conflicts arising with each network’s affiliate bodies.AT&T giving bidders time to improve offers for broadband unit: AT&T is giving bidders on its broadband unit until Dec. 19 to improve their offers in time for another special board meeting. But increasingly, people close to the situation believe one of two results will occur.

The AT&T board met Saturday to review the first round of offers and has not dismissed anyone from the process. All of the principals involved declined comment and are bound to secrecy by confidentiality agreements. AT&T may be giving Cox Communications in particular more time to revise its bid, possibly by assuming more AT&T debt.

Sources close to the situation say AT&T may be partial to Cox because of its aggressive rollout of telephony, which was the driver for AT&T to enter the cable fray. The other likely scenario is that after all the machinations, AT&T opts to retain its broadband unit for now under recently installed new operating management.

The AOL Time Warner offer to combine its and AT&T’s cable operations in a publicly traded stand-alone entity will likely encounter regulatory resistance, and AT&T appears to have an unexplained aversion to Comcast, whose $50 billion-plus bid it rejected earlier this year. A losing bidder could wage a proxy fight or other legal challenges, or make a direct plea to AT&T’s powerful institutional shareholders. But at the end of the day, AT&T is free to do what it wants with its cable unit, and chairman Michael Armstrong already has signaled his intention to keep it.

In any event, Microsoft Corp. has made clear it is prepared to invest between $4 billion and $5 billion in the existing or resulting AT&T Broadband structure to keep its hand in the broadband cable game.

TV ad revenue down substantially so far this year, CMR says: Network television advertising revenue was down 8 percent and spot TV was off 17.9 percent for the first three quarters of 2001, according to the latest data from CMR, a Taylor Nelson Sofres company.

Cable, up 2.1 percent for the same period, was the only bright spot on the TV advertising landscape, according to the CMR data.

Only two of the top 10 national advertisers increased their overall spending for all media during the first three quarters. AOL Time Warner was up 11.9 percent and Ford was up 5.4 percent. The spending leaders, General Motors and Philip Morris, were down 28.4 percent (from $2.2 billion to $1.6 billion) and 20.6 percent (from $1.4 billion to $1.1 billion), respectively. Other top spenders, including Procter & Gamble, DaimlerChrysler, Walt Disney Co., PepsiCo, Pfizer and Johnson & Johnson, were also down.

Fox takes key demo in Sunday ratings race: NBC’s two-hour “SuperCroc” documentary lacked any real bite in the ratings Sunday night. Meanwhile, Fox won the night in adults 18 to 49, followed by ABC, as both networks still dropped by double-digit percentages week to week.

NBC’s 7 p.m.-to-9 p.m. (ET) airing of the National Geographic special “SuperCroc” turned in bottom-ranked scores in households (4.4 rating/7 share), adults 18 to 49 (2.1/5) and total viewers (6.8 million), according to preliminary Nielsen Media Research fast national data.

CBS took the opening half-hour (7 p.m. to 7:30 p.m.) thanks to a roughly 15-minute overrun of its National Football League game coverage, which was estimated to have scored top-ranked averages in households (12.3/21), adults 18 to 49 (5.2/15) and total viewers (17.7 million). The football carryover also allowed “60 Minutes” to uncharacteristically win the 7:30 p.m.-to-8 p.m. frame with a top-ranked 4.5/12 in adults 18 to 49, in addition to taking households (12.4/20).

Fox’s run of new episodes of “Futurama” (3.4/10) and “King of the Hill” (3.9/10) allowed the network to finish second in adults 18 to 49 for the 7 p.m.-to-8 p.m. frames. Originals of “The Simpsons” (6.2/15) and “Malcolm in the Middle” (5.9/13) kicked Fox into high gear with typical wins in adults 18 to 49 for the 8 p.m.-to-9 p.m. time slots.

ABC’s “Wonderful World of Disney” presentation of “Santa Who!” came in second for the 7 p.m.-to-9 p.m. frame in households (6.5/10) and total viewers (10.9 million), but dropped to third in adults 18 to 49 (3.4/9).

Things worked out better for ABC in the 9 p.m. and 10 p.m. hours, where freshman drama “Alias” won adults 18 to 49 (4.5/10) while “The Practice” (5.9/15) took the closing frame in typical form. Marking a continuing troubling trend of weekly erosion for Fox, “The X-Files'” second-ranked 4.4/10 in adults 18 to 49 dropped 5 percent from its previous week’s average (4.6/10).

NBC freshman drama “Law & Order: Criminal Intent” turned in a third-ranked 3.5/8 in adults 18 to 49 from 9 p.m. to 10 p.m., up 17 percent week to week. NBC’s lead-out drama “U.C.: Undercover” came in with a second-ranked 3.5/9, up 25 percent week to week.

CBS’s presentation of the “Hallmark Hall of Fame” telefilm “Seventh Stream” posted a second-ranked 6.9/11 in households and a third-ranked 2.6/8 in adults 18 to 49, marking 16 percent and 24 percent dips, respectively, from last week’s movie presentation of “Jack and the Beanstalk.”

For the night, Fox won adults 18 to 49 (4.7/11) but was down 17 percent week to week. ABC followed with a 4.3/10 in the key demo, down 23 percent week to week. CBS won households (8.5/13), but was down 9 percent week to week in adults 18 to 49 (3.2/8). NBC was flat week to week , with bottom-ranked averages in households (5.5/9) and adults 18 to 49 (2.8/7).

ESPN launching new net in Europe: ES
PN is launching ESPN Classic Sport in Europe. The new 24/7 network rolls out first in France with a launch set for early 2002. Other Euro Classic Sports nets are planned for additional European countries that are yet to be announced.

Like ESPN Classic in the U.S. and ESPN Classic Canada, the new Euro nets will offer a mix of historical highlights, full-length events and original retrospective programs. Each individual country’s Classic net will have programming tailored to that country’s particular favorite sports. ESPN Classic Sport is 70 percent owned by ESPN and 30 percent owned by Sports Capital Partners, a private investment firm. ESPN Classic U.S. now reaches 43 million homes.

New cop on the ad-agency beat: MediaAnalysisPlus, a new company headed by Jim Surmanek, proposes to engage in post-analysis third-party audits of advertising schedules bought by agencies for advertisers. The post-analysis process consists of checking the actual cost of a TV schedule against the advertiser’s previously approved budget, plus verifying the actual media delivery of the schedule.

“When it comes to determining whether their advertising schedules actually ran as they were supposed to, this critical oversight task is left to [advertisers’] agencies — the same people who bought the schedules,” Mr. Surmanek said. “This is like letting rabbits carry your lettuce.”

Errors that can creep into the ad-buying system include program pre-emptions, station trafficking errors, unacceptable or inopportune make-goods, mistakenly coded prices and mistakenly coded times, according to Mr. Surmanek.

Third-party auditing of the advertising process “purveys the entire industry” in Europe, Mr. Surmanek said, but is nearly nonexistent in the United States. His company, formed by Cable Audit Associates, has handshake deals with three advertisers, who do not yet want to be identified for fear that auditing will jeopardize their relationships with the agencies. One is a tech company, Mr. Surmanek said; the other two are package-goods advertisers.

“There could be a temptation to mask error,” he said of agencies’ procedures, “but I would like to think that all agencies are honest.” The company’s “initial bent” will not be on fraud or dishonesty, Mr. Surmanek said, but rather inefficiencies and honest mistakes.