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May 22, 2003  •  Post A Comment

Upfront Estimates May Set Record

A buyers feeding frenzy is fueling a broadcast-upfront market that looks likely to set a volume record, with early network and advertising executives estimates exceeding $9 billion and perhaps reaching $9.3 billion.

And NBC, the upfront volume leader, is poised to become the first $3 billion network, according to Randy Falco, NBC TV Network group president. CBS is expected to follow with approximately $2.2 billion.

One deal that wasn’t made last week was the renewal of the largest single deal ever, last year’s one-year $1 billion-plus cross-platform deal between mega-agency OMD and the Walt Disney Co. ABC’s Mike Shaw, president, sales and marketing confirmed that the deal was not renewed, though he declined to offer specific reasons.

The deal wasn’t renewed because of changing marketplace dynamics, according to Ray Warren, OMD’s managing director. “There’s going to be business with Disney, [but] we’re not doing a deal on the same scale that we did it on last year.”

Another big OMD cross-platform deal yet to be made is with Viacom Plus, Mr. Warren confirmed. The elements of that mega-deal could include CBS Sports, CBS prime time and the MTV Networks. That also is likely to be a one-year deal, with options for renewal. Because of all the “moving parts” in the proposed deal, Mr. Warren declined to “put a number against it,” saying, “We’ll see if the rest of it falls into place in the next 30 days.”

Ad categories that are up at most networks include pharmaceuticals, retail, entertainment, quick-service restaurants and package goods. One significant category that is flat to down, according to several network executives, is automobiles.

Networks that are seeing upfront CPM increases of at least 16 percent in the fast and furious upfront include NBC, Fox, ABC, CBS and UPN, with The WB scoring increases of 20 percent and above, according to Advertising Age, a TelevisionWeek sister publication. The WB has done approximately $710 million in the upfront and is essentially soldout, according to Jed Petrick, the network’s president and chief operating officer.

As Memorial Day weekend approaches, the upfront market is awash in unexpectedly big-budget dollars released by defensive-minded advertisers who fear being caught again in last year’s scenario, in which scatter-market costs-per-thousand were up as much as 25 percent over upfront levels.

That fear, rampant among advertisers who were burned in scatter, has ballooned upfront budgets beyond most expectations. It also has created a fluid upfront, rather than the segmented upfront of recent years, with cable, syndication and Hispanic-network deals all being made concurrently with the broadcast networks. “Agencies are moving their Turner budgets concurrent with their broadcast budgets,” said David Levy, head of ad sales at the Turner Networks. “Volume is up across multiple categories [by] at least 10 percent,” he added, noting that he had thus far sold approximately 40 percent of the inventory earmarked for the upfront.

Broadcast networks, with the possible exception of CBS, are expected to conclude upfront before the Memorial Day weekend. Cable and syndication are expected to be essentially completed by the end of next week.

With upfront money at high tide, picking winners is easier than finding losers. “Everybody’s going to claim they won,” said Joe Abruzzese, head of ad sales for Discovery Networks, who last year headed ad sales at CBS. “‘I got the highest price,’ ‘I got the highest CPM,’ ‘I got the most money,’ ‘I got the biggest value,'” he chorused, illustrating the claims that could and would be made.

OMD’s Mr. Warren sees a $9 billion upfront when all is said and done. The question about upfront estimates, he said, is “how much of it is real … how much of it makes it all the way through the process of negotiating a deal, presenting it to a client, having the client approve it, then going back to the network and getting it all done the way it was originally said at 3 in the morning last night or the night before?”

Gralnick to Return to NBC News: Jeff Gralnick, a news producer who has worked at CBS, ABC, NBC and CNN, is returning to NBC News as the executive in charge of The News With Brian Williams, which airs at 7 p.m. and 10 p.m. on CNBC.

“I’m happy to be going back there. After two years of using four cylinders, I figured it was time use all eight again,” said Mr. Gralnick, who most recently has been an Internet and broadcast strategy consultant whose clients included CNBC, CBS News, Fox Sports and LiveWave.

Mr. Gralnick was executive producer of NBC Nightly News from 1993 to 1996, a period when the newscast moved into second place for the first time in its history and won its first Emmy for coverage of the Great Flood of 1993.

In 1993, he returned to ABC News as VP of news, after previously spending 22 years at ABC News in a number of key positions. As news VP he developed and launched abcnews.com and developed plans for a 24-hour ABC cable news channel. The news channel was squelched at the last minute by a corporate decision that a news channel would not pay off but a family channel would.He retired from ABC in 1999 to become executive VP of CNN financial news, a position he held until 2001.

His network career began with a 12-year stint at CBS News, where his assignments ranged from managing the New Orleans bureau and reporting from Vietnam to producing special events and being a field producer on 60 Minutes.

“We are extremely pleased that Jeff is returning to NBC,” said NBC News President Neal Shapiro. “He is a veteran news producer with a wealth of experience in the television business.”Bret Marcus, who has been executive producer of The News for two years, will work for Mr. Shapiro on special projects.

Patrick Burkey, the senior producer of the newscast on which Mr. Williams was to polish his act as the successor to Tom Brokaw when Mr. Brokaw steps down after the presidential elections of 2004, will be in charge of The News on a day-to-day basis under Mr. Gralnick’s oversight.

“Together, Jeff and Pat make a formidable team and will provide new opportunities for the broadcast to excel and innovate,” Mr. Shapiro said.

McCain Uncertain About Fin-Syn Rules: The prospects for the Hollywood creative community’s campaign to win new fin-syn regulations dimmed significantly today when Sen. John McCain, R-Ariz., announced that he didn’t see how new rules could be legally adopted. The creative community’s campaign to win regulations that would limit the ability of major TV networks has also received a cool reception from Federal Communications Commission Republicans.

Legislation to force the FCC’s hand on the issue would have to be approved by the Senate Commerce Committee, which Sen. McCain chairs. But at hearings before the committee this morning, Sen. McCain said the FCC’s former rules on the subject had been canned by the courts as unconstitutional. “I don’t think you’re going to see a return to fin-syn,” Sen. McCain said.

In a follow-up session with reporters, Sen. McCain said he is sympathetic to the creative community’s cause, but that he doesn’t see how he can attack an issue that is “clearly unconstitutional as judged by the courts.” Continued the senator, “I don’t know an answer. Until somebody comes up with one, I don’t know what to do about it.”

Also at the hearing, Sen. Barbara Boxer, D-Calif., disputed News Corp. chief Rupert Murdoch’s contention that his Fox News Channel offers fair and balanced coverage. “I do think it’s fair and balanced, between the right and the far right,” she said. Mr. Murdoch was in attendance to testify in support of News Corp.’s acquisition of DirecTV.

Plestis Upped at NBC Entertainment: Craig Plestis was named VP of alternative programs, NBC Entertainment. He moves to the programming side from promotions. He had been VP, on-air promotions, The NBC Agency. He will report to Jeff Gaspin, executive VP, alternative series, long form, program strategy and Bravo, NBC Entertainment. Mr. Plestis will develop and oversee alternative series including For Love or Money, The App
rentice and Who Wants to Marry My Dad?

TNT Adds ‘Boomtown’: Turner Network Television has snagged the early off-network rights to NBC’s Boomtown, which will join the TNT lineup Monday, May 26.

The deal with NBC Enterprises calls for TNT to have an exclusive window to air all the first-season episodes this summer and a second window for season two episodes, which are expected to begin their TNT run in Jan. 2004.

The series, produced by DreamWorks Television in association with NBC Studios, begins its second season on NBC this fall.

The Boomtown announcement was made by Ed Wilson, president, NBC Enterprises, and Steve Koonin, executive VP and chief operating officer for TNT and TBS Superstation.

‘Idol’ Finale Pushes Fox to Sweeps Win in Demo: An average of 33.7 million viewers tuned in to see Ruben Studdard crowned the second American Idol. Two hours of Idol pulled a 14.6 rating among adults 18 to 49 and a whopping 35 share, according to Nielsen Media Research fast affiliate data.

The show propelled Fox to a May sweeps win in the demo, pushing its 4.4/13 May sweeps average through 27 days up to a 4.7/14, ahead of NBC’s 4.4/12. Nobody even came close to touching Idol from 8 p.m. to 10 p.m., and the final half-hour of the show drew 39.7 million viewers and a 17.6/38 in adults 18 to 49.

The finale gave Fox its highest Wednesday night ratings ever in adults 18 to 49 and total viewers and the network’s second-highest-rated night in history with entertainment programming, behind only the finale of Joe Millionaire.

The 9 p.m.-to-10 p.m. hour finale-which Fox counts as a separate program from the 8 p.m.-to-9 p.m. hour-outperformed the finale of American Idol 1 by 55 percent in adults 18 to 49 and 64 percent in total viewers. Last night’s finale outperformed CBS, ABC and NBC combined by 33 percent in adults 18 to 49 and 2 percent in total viewers.

Mr. Studdard edged out Clay Aiken for the Idol title by 130,000 votes, although host Ryan Seacrest incorrectly reported that number on air twice, first as 13,000 votes and then as 1,300 votes.

NBC stunted with three hours of Law & Order, including the series’ 300th episode and season finale. From 9 p.m. to 10 p.m., L&O came in second in adults 18 to 49 with a 5/11 and second in total viewers with 15.9 million. From 10 p.m. to 11 p.m., L&O finished first with a 6.7/16 in the demo and 19 million viewers.

For the night, Fox won in adults 18 to 49 with a 14.8/35, followed by NBC (4.8/12), ABC (4.2/10) and CBS (3.5/8). Fox also won in total viewers with 33.7 million, followed by NBC (14.7 million), CBS (12 million) and ABC (9.8 million).