A&E Exec Tasked With Turnaround

Dec 8, 2003  •  Post A Comment

Mel Berning, the new executive VP of advertising sales for A&E Television Networks, has his work cut out for him.
Taking over the 20-year-old cable network group, Mr. Berning will have to contend with advertiser apathy, some lackluster programming and A&E partners and management who don’t always see eye to eye.
Mr. Berning comes to A&E from MediaVest Worldwide, New York, where he was president of U.S. broadcast. Previously, he worked at NBC for more than a decade, rising to senior VP of pricing and planning. He couldn’t be reached by press time.
For more than two years Whitney Goit, senior executive VP at A&E Networks, had been searching for a new senior advertising sales executive-ever since Arlene Manos moved over to take a position as president, national ad sales, Rainbow Networks/AMC.
Mr. Berning brings to A&E “deep experience on both sides of the business,” Mr. Goit said.
That experience will be needed, since A&E has struggled in recent years to increase ratings and, as a result, advertising pricing for its shows. Cable programming competitors noted A&E hasn’t had a breakout show since “Biography” and the network is hardly a must-buy as far as Madison Avenue is concerned.
“They dropped pretty significantly in ratings in 2002,” said Derek Baine, analyst at Kagan World Media. Asked how much the addition of Mr. Berning can help A&E, Mr. Baine said, “Aggressive ad sales always helps but really what you need is hit programming. Their CPMs are close to $5 [in prime time] already, which is pretty good.”
A&E’s advertising revenues peaked in 2000 at $365.5 million, according to Kagan World Media. Ad dollars slid to $284.5 million in 2002 and are projected by Kagan to reach $290.9 million this year. Next year, Kagan forecasts, A&E’s ad revenues will be $311.2 million.
“The good news is this is a cyclical business,” Mr. Goit said. He said A&E is already staging a comeback, while the History Channel continues to show “significant growth.”
Mr. Goit said History Channel’s revenues were up 25 percent in the upfront, and its cost-per-thousand-viewer prices rose 8 percent. “A&E is in the midst of a solid comeback,” Mr. Goit said. In November the network was up 15 percent to 16 percent among viewers 25 to 54.
Mr. Goit noted that in today’s market, “which has become so complex, with added value, co-promotion and even co-production, having someone who’s been so much a part of guiding that evolution on the client side will be tremendously helpful.”
Mr. Berning has much experience in this area. In 2001 he was instrumental in putting together one of the most successful continuing large cross-platform media and marketing deals with a media company-a massive $350 million annual deal with Viacom for MediaVest client Procter & Gamble.
Mr. Berning will report to Mr. Goit and will be responsible for ad sales for all of A&E Networks’ platforms, including the cable networks A&E and History Channel.
During the past two years, there have been reports that NBC, The Walt Disney Co. and Hearst, which jointly own A&E Networks, have been disappointed with A&E Networks’ performance under President and CEO Nick Davatzes.
Ray Joslin, president and group head of Hearst Entertainment and Syndication and a member of the executive committee overseeing A&E, told TelevisionWeek in September that A&E has not met the board’s financial goals.
Mr. Goit said he wasn’t sure what Mr. Joslin meant, considering that in the current strong ad market A&E was having a good year financially. “Our revenues are pretty much on forecast,” he said, with the company ending the year within a few hundred thousand dollars of where it expected to be.
A&E will not, however, make its five-year ad sales plan, Mr. Goit conceded. A&E’s five-year forecast has been adjusted, he said, to give the networks’ programming changes time to rebuild its 25- to 54-year-old viewership base.
The History Channel has done better, however, than its forecast, Mr. Goit said. The network’s advertising sales dropped to $116 million in 2001 from $120 million in 2000 before climbing to $135.7 million in 2003, according to Kagan. This year, ad sales are expected to reach $145.3 million and grow to $165 million in 2004.
A&E’s recent performance has led to speculation within the industry that Mr. Davatzes, who has led the company for some two decades, may not be in charge for much longer.
Mr. Goit countered the speculation.
“Our management is pretty stable. Nick will be around two years,” Mr. Goit said.
When there’s a change to a new generation of management, “We [Mr. Goit and Mr. Davatzes] will be a part of that transition,” he said.