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Wild Week: TV Eyes Economy

Sep 21, 2008  •  Post A Comment

The crisis early last week on Wall Street seems to have television executives more concerned about their portfolios than their business—so far.
Most executives say that as of last week, advertising revenues are holding up and, while the stock market’s undulations are cause for concern, they don’t have plans to cut spending on programming or staff.
Speaking at an investment conference last week, CBS CEO Les Moonves and News Corp. Chairman Rupert Murdoch said advertisers have not backed out of commitments to buy commercials from their companies, according to published reports. They also said prices remain high on the scatter advertising market.
John Lansing, president of Scripps Networks, said the company continues to plan to spend money on programming.
“We want to drive our top by investing in programming to drive ratings,” Mr. Lansing said.
Scripps has pumped money into new Food Network shows, and the network has responded with record ratings and higher revenues, he said.
When ad spending fell in 2001, broadcast and cable networks laid off some employees and found other costs to trim, such as cutting back on overnight shipping and downsizing Christmas parties.
Now, television executives say, they always keep a watchful eye on expenses.
“We manage our spending so that we can ride out situations like this,” said Andrea Wong, CEO of Lifetime. While the TV business used to be known for wild spending, Ms. Wong said most companies have learned to “be more fiscally responsible.”
Similarly, Abbe Raven, CEO of A&E Television Networks (parent of A&E and History) said there were no new plans to reduce costs or payroll.
“We’ve been doing that all along,” Ms. Raven said.
TV ad sales executives say that outside of companies in the financial industries, which are relatively small ad spenders, most marketers have stuck with their TV plans despite the sagging market and the uncertain economy.
“In hard economic times, people go back to what they know works, and that’s television,” said David Levy, president of ad sales and sports for Turner Broadcasting.
Cable networks like Turner’s are in a good position if the economy worsens because their lower
prices relative to broadcast make buying there more efficient to advertisers, Mr. Levy said.
Turner was one of the leaders in a strong upfront market earlier this year, and Mr. Levy said the orders placed in the spring have almost all turned into real purchases of ad time for the fourth quarter.
Scripps, which owns HGTV and DIY Network, said that while the housing market is off, its home-improvement programming is still drawing sponsors. Companies like Home Depot may be cutting ad budgets overall, but not on Scripps networks, where they can reach a concentrated audience of their customers, said Jon Steinlauf, senior VP for ad sales.
Spending in many areas of television was strong in the first half of the year, when the overall advertising market was sagging. With the effects of the Writers Guild of America strike affecting their schedules, broadcast networks saw their ad revenue drop 6%, according to the Nielsen Co.
Conversely, cable spending was up 8.1%, syndication was up 7.2% and Spanish-language TV was up 4.5%, Nielsen said.

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