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.
All this would seem to give advertisers the upper hand.
But experts believe the broadcast networks will be willing to hold back their inventory of commercial time if prices are not what they would like. It would be then offered down the road in the spot market -- a bet the economy will be in better shape at that time.
"Even if total volume is down at the upfront, we're confident that we will take share and maintain or increase our revenue," CBS Chief Executive Les Moonves said during a recent conference call.
CBS will unveil its new programs on Wednesday after News Corp's Fox on Monday and Walt Disney Co's ABC on Tuesday. NBC, owned by General Electric Co and Vivendi SA, introduced its new shows earlier this month, but will announce the precise schedule of its prime-time lineup next week.
In speaking to reporters and advertisers about the new shows, NBC executives were guarded in their forecasts for this year's upfront market.
"We're feeling anecdotally that advertisers are leaning forward getting ready to move," said Michael Pilot, president of NBC Universal sales and marketing.
"If you think about the recovery sometime later this year or early 2010, we're starting to see advertisers lean into that and get ready for that," he said. "But I'm not ready to call it one way or another. I think it's going to be interesting."
Advertisers will be looking for price breaks and will face less competition in bidding for advertising time, with key categories such as autos, retail and financial services scaling back or disappearing altogether. It remains unclear whether General Motors Corp, for instance, will participate in upfront talks at all this year.
"Here's a simple way to think about it," Procter & Gamble Co Chief Executive A.G. Lafley said during a call with analysts last month. "Auto industry, big media buyers, dramatic draw down. Financial services industry, big media buyers, substantial draw down. And I could name a few other industries that have moved down and even in some cases out. It's been a buyer's market."
TV executives will counter that television still has the broadest appeal to U.S. consumers -- and that, if money is tight, then buying commercial spots are the surest way to reach big audiences.
Both sides seem to agree on one point: Because so much is at stake, this year's market will move slowly. A year ago, most of the deal making wrapped up in early June. This time around, TV executives and advertisers do not expect business to wrap up until after the Fourth of July.
Additional reporting by Ben Klayman in Chicago; Editing by Andre Grenon