Stakes are high in TV deals, even if money is down

Fri May 15, 2009 1:36pm EDT
 
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By Paul Thomasch

NEW YORK (Reuters) - It has all the trappings of a hit TV reality show: intrigue, power plays and money.

But the stakes will be far higher next week when the top U.S. broadcast networks introduce their 2009-10 prime-time schedules and get down to negotiating billions of dollars worth of deals with advertisers.

The early prediction from industry pros: ABC, NBC, CBS and Fox will collect much less than the roughly $9.2 billion they received a year ago, perhaps 15 percent less, and negotiations will be more contentious and stretch out longer than usual.

The results from this year's upfront market should go a long way toward determining whether advertising spending has begun to recover. Advertisers, after all, will be making decisions about spending commitments through next spring and may want to take advantage of lower ad rates.

"I think the upfront marketplace will be fascinating," said Cathleen Campe, director of broadcast & video investment for RPA, the Los Angeles-based media agency.

"The key is how much money comes into the market. Advertisers might say: 'Gosh, this is a great opportunity, we can never usually afford to get into the upfront, but at these prices, maybe we should.' But can they predict budgets for 18 months? That's a long time the way the world is right now."

Not only are television executives tasked with selling advertising time in an ugly recession, they continue to face questions about fragmenting audiences. Collectively, ratings for prime-time broadcast television are down again this year.

Only CBS, part of the CBS Corp, has seen an increase in viewership, a development that is so notable that CBS launched a full-fledged ad campaign to trumpet it.   Continued...

 
<p>Les Moonves, President and CEO of CBS Corporation, speaks in New York February 6, 2007. REUTERS/Chip East</p>