With Upfronts Over, Let the Haggling Commence!

The networks' upfront presentations to advertisers are over — now the haggling begins.

Fox was the first of the Big Five English-language broadcasters last year to wrap up its business, and is likely to be first again. That means its negotiations will set the pricing levels for the other networks.

Despite declining ratings overall, largely due to continued fragmentation of audiences because of so many cable networks, the broadcast networks are expected to do brisk business, and negotiations are likely to be completed no later than mid-June.

The networks have not publicly said where they plan to open negotiations, but network sources have told TheWrap that Fox, CBS and ABC will be looking for primetime price increases of at least 15 percent. Media agencies, which refused to pay more than 9 percent last year than they had the year before, believe that Fox and CBS could average 12-13 percent increases for primetime inventory this time, agency insiders told TheWrap.

NBC's efforts to recover from Jay Leno's debacled move to 10 p.m., meanwhile, have resonated with buyers. While NBC is not expected to get the same rate hikes as Fox, CBS or ABC, it will still take in a good chunk of upfront dollars.

"The first few deals do set the tone for the market," one executive for a major media agency told TheWrap. "And there is pressure on one of the higher-rated networks to do at least a few deals before the lower-rated networks do to prevent the latter from establishing a lower price ceiling."

Here's a look at each of the networks:

FOX

Fox took in $1.9 billion in primetime ad dollars from last year's upfronts. It made slightly less than ABC or CBS last year because it has an hour less programming per night, but still made more than fourth-place NBC.

Fox is usually the first to do upfront deals because it reaches a sizable 18-34-year-old demo, is tops in 18-49 (though CBS is most-watched overall) and has the highest-rated show on television in "American Idol."

But last year it surprised many by being the first network to wrap up all of its business two weeks after the official upfront programming presentations to media agencies and advertisers.

Why will Fox likely do it again this year? In addition to its younger, harder-to-reach male demo, and "Idol," it will premiere another reality show this fall, Simon Cowell’s "X Factor," for which advertiser demand is expected to trump commercial availability.

Though Fox plans to price commercial time for "X Factor" close to "Idol" levels, buzz for the show has many advertisers telling their media buying agencies to make sure to get them into the show.

While Fox is expected to price commercial time in "X Factor" aggressively, one industry observer told TheWrap, “I don’t ever recall a show like 'X Factor' which was this highly anticipated going into an upfront.

'Idol' became an unexpected hit in the summer, after the upfront. This show already has star power in Simon Cowell, who has a proven track record with Fox, and with Paula Abdul, his fellow judge who he clashed with when they were both on 'Idol.'"

Another plus for Fox in this upfront is the uncertainty of the National Football League season and whether it will start on time. With the lockout in place as of now, NBC’s "Sunday Night Football" in primetime may not start as scheduled in early September.

Fox’s Sunday night animation block from 8-10 p.m. skews heavily male and could benefit as some advertisers hedge their bets and pull some money from football to put it into the animated shows.
Expect movie companies and auto advertisers to do the first deals with Fox, with advertisers in other categories then jumping in.

CBS

CBS made $2.4 billion in upfront ad buys last season. This year, several media buyers praised CBS’ new shows for the fall and believe that its five new programs will add to the attractiveness of its already stable schedule. It could be right there with Fox in doing some of the first deals.

The network's stable, "if it ain't broke" slate makes it a reliable buy, but CBS also has high hopes for its new shows. Entertainment president Nina Tassler said Wednesday that the new "Person of Interest" was its highest-testing drama pilot ever, and that the new comedy "2 Broke Girls," which will share Mondays with a rebooted "Two and a Half Men," was the best-testing pilot for the network ever, comedy or otherwise.

ABC

ABC took in about $2.3 billion in upfront sales last year, second in volume only to CBS’ $2.4 billion.

ABC is adding four dramas and three comedies for fall, and media buyers were uncertain how they would affect the kind of price hikes the network can earn. Just as Fox has "American Idol," ABC has a viewer juggernaut in "Dancing With The Stars."

NBC


The fourth-place network, which made $1.6 billion in upfront primetime buys last season, will offer three new dramas and three new comedies for the fall. However, media buyers are sympathetic to NBC’s ratings declines under past General Electric ownership and believe the network’s new shows and new Comcast management are a step in the right direction.

NBC seems to have found its own reality hit in singing competition "The Voice," which has had a strong spring run and will return January, when it can surely expect a premium rate increase.

Several media buyers were unhappy that NBC’s previous executive team under GE made the ill-fated move of moving Jay Leno to 10 p.m., which left the network with five valuable hours of unfilled programming time when the Leno flopped in primetime.

“It is going to take them several years to recover from that and rebuild the 10 p.m. hour,” one buyer opined to TheWrap. “It’s hard enough to come up with programming to fill the normal number of holes each year in a schedule, but NBC had to add five more hours on top of that.”

Another buyer said, “NBC in this upfront development season and with their new schedule did as much as they could to become more competitive. They didn’t overpromise. But it is going to take some time to get back to where they were.”

A humble Bob Greenblatt, NBC’s new entertainment chairman, told buyers during the upfront presentation that he is hoping “to rebuild the network show by show.” And in a rap at his predecessors, said, “we want to be strong in the 10 p.m. time period after it was almost abandoned last year.”

The CW

The CW, which offers just two hours of primetime programming per weeknight, made $400 million in primetime ad buys last season.

It has always gotten decent rate hikes because it has a high number of hard-to-reach younger viewers. And while the network’s TV ratings are down, and small compared to the other broadcast networks, the CW’s ability to reach its audience via time-delayed DVR viewing and other platforms is keeping advertisers investing solidly in the network.

At its upfront presentation, the network pointed out that its drama "90210" doubles its live TV audience when seven-day DVR viewing numbers are added in. And this past season’s streaming of all its shows with commercials online was a huge success. The network said 55 percent more viewers watched its shows online this past season than last season and the amount of viewing time increased 175 percent.

Only 7 percent of the viewers watching the shows online were duplicate viewers from the TV airings.

Then there was the stat advertisers like best — 94 percent of the commercials in the online shows ran to completion, meaning those watching the online versions watched the commercials too.