Upfront totals near record high

Jun 10, 2002  •  Post A Comment

The Peacock is justifiably proud of its $2.7 billion upfront take, which smashed predictions and led all comers.
Estimates for the size of the overall broadcast marketplace itself vary, but the high-end figure is $8.1 billion, which, contrary to all pre-upfront expectations, would bring broadcast all the way back to the record set in 2000.
But NBC has gone further than preening about how well it did. A senior network executive has declared that NBC did a full billion dollars more business than second-place CBS, and moreover he has said that NBC’s upfront numbers, not only for itself but for the other broadcast networks as well, are unassailable.
Of course, that did not dissuade the other networks from assailing them at once. CBS in particular contends that it did as much as $2 billion in the upfront, $300 million more than the NBC estimate.
There is disagreement as well among the broadcast networks about the size of the overall market, with totals ranging from $7.45 billion to $8.1 billion. These are NBC’s summary numbers for the just-concluded upfront:
NBC says it did $2.7 billion worth of business in the blistering sales marathon, selling 83 percent of its inventory for the new season, compared with 78 percent last year. NBC put ABC’s take at $1.3 billion, Fox’s at $1.1 billion, The WB’s at between $500 million and $550 million and UPN at between $220 million and $250 million. The entire broadcast upfront market will total $7.5 billion, well up from last year’s $6.5 billion, according to NBC’s data. By comparison, 2000’s record broadcast take was approximately $8.1 billion.
“We’re gratified by how the upfront broke,” said NBC Entertainment President Jeff Zucker.
CBS, the second-biggest beneficiary of the advertisers’ largesse, was happy too. “This is the largest upfront in the history of CBS,” said Leslie Moonves, the Eye Network’s president and CEO.
CBS pegged its own take at between $1.9 billion and $2 billion, with “slightly more” than 80 percent of its inventory sold, said Joseph Abruzzese, president of sales for CBS Television.
CBS finished this season third in adults 18 to 49, just behind Fox by a tenth of a ratings point, according to Nielsen Media Research.
CBS’s cost-per-thousand increases, around 10 percent, led the industry, Mr. Abruzzese said. As for revenue, “This was a record year for us,” he said.
As for NBC’s contention that it would do a full billion dollars more business than CBS in the upfront, “It didn’t happen,” said Mr. Abruzzese, though he did agree that NBC could very well do $2.7 billion itself.
The overall marketplace could “easily” be $8 billion, he said, and it might reach $8.1 billion. CBS probably will do just under $2 billion, he said. Emphasizing that he was speculating, Mr. Abruzzese put ABC’s final total at $1.4 billion, Fox’s at $1.3 billion, The WB’s at $550 million and UPN’s at $250 million.
“We thought it would be a good marketplace, but it turned into something of an exceptional one,” said Jon Nesvig, Fox’s ad sales president, summarizing the prevailing sellers’ view. Fox itself puts its own upfront take at $1.3 billion, with CPMs up about 8 percent over last year. Like the other networks, Fox is reporting a sell-out level in the low 80 percent range.
Even ABC, which had expected to be punished for its ratings tumble last season, benefited from the exceptional upfront to the tune of $1.5 billion, with more than 80 percent of its inventory sold and CPM levels up about 5 percent over last year.
“This was a pretty broad-based recovery, if you will,” said Mike Shaw, president, sales and marketing, ABC Television Network. “We’ve got basically every category coming in above [last year],” he said, specifying auto companies, movie studios, pharmaceuticals, quick service restaurants and packaged goods.
Contrary to both CBS and NBC, ABC pegs the overall broadcast upfront at between $7.45 billion and $7.5 billion.”
As for NBC’s $2.7 billion, “I don’t have any evidence that it’s not [true], but it just sounds like a fantastic number,” one senior network executive said.
Movies, autos and retail were the top three categories at NBC; telecommunications, financial and computers were also up. Those were the same categories that the other networks were reporting generally led in their own upfronts.
NBC said it turned away business, putting up the “sold out” sign; The WB made the same claim, saying it turned away $50 million in advertiser dollars. Those sellouts and turn-aways, in turn, supercharged the other networks’ upfronts, according to some observers.
The WB said it did better than its rivals predicted by selling $575 million in the upfront, with CPMs up 15 percent to 16 percent. UPN, which is now being sold by CBS, where it is considered essentially another daypart, did $250 million.
If it seems odd that the broadcast networks can’t even agree on the overall size of their own marketplace, consider this: There is still no general agreement on the size of last year’s upfront marketplace, with equally authoritative estimates differing by as much as $300 million.