Tag Archives: Nbc

Top U.S. networks wrap ‘upfront’ sales on upswing

LOS ANGELES (Reuters) – The three leading U.S. television networks said Monday they have concluded the bulk of their prime-time advertising deals for the upcoming 2008-09 season with prices for commercials running unexpectedly higher than last year.

The networks’ “upfront” market — an annual springtime round of negotiations accounting for roughly 80 percent of their advertising business — drew to a close more quickly and robustly than anticipated given the industry’s recent ratings slump and the shaky U.S. economy.

ABC, owned by the Walt Disney Co , said its cost per thousand viewers, the basic pricing unit for TV ads, was up about 9 percent from last year, with about $125 million more in total sales — most of that from ads booked in prime time.

CBS , meanwhile, is reaping price increases of 7 percent to 9 percent, though its overall sales volume in prime time is about the same as last year’s level, according to a source familiar with the network’s negotiations.

Advertising for sports broadcasts was not included in either network’s figures.

News Corp’s Fox Broadcasting Co., newly ranked as the most watched U.S. TV network, issued a terse statement saying it had concluded its prime-time upfront sales “at volume and pricing levels consistent with the No. 1 network.”

No further details were given, but sources last week told Reuters that Fox, flying high from the blockbuster success of “American Idol,” was estimated to have booked year-to-year price increases as high as the low double-digits.

NBC, a General Electric Co unit ranked lowest in ratings among the four major networks, was said to have closed upfront deals ahead of its rivals last week with $1.9 billion in prime-time ads sold, up about $100 million from last year.


Network officials and industry analysts said much of the unexpected price strength was driven by advertisers shifting more of their spending into upfront deals after paying hefty increases last season for leftover ad inventory in the so-called “scatter” market.

Some of the higher scatter-market prices resulted from supply shortages created as networks dipped into ad inventories for “make-goods” used to compensate advertisers when ratings fell below guaranteed levels last year.

Broadcast viewership last season was down 7 percent overall, and 10 percent among the young adults most prized by advertisers, as growing competition from cable TV, the Internet and video games continued to take its toll on the industry.

The TV landscape was made even more rocky by the lack of breakout hits and a 14-week screenwriters strike that halted production on prime-time comedies and dramas, forcing networks to run a glut of reruns and reality shows at midseason.

Contrary to the expectations of many analysts, however, advertisers “still very strongly believe in the power of network television to build brand awareness,” said Shari Anne Brill, a senior vice president for media buying agency Carat. “That’s where you get the mass reach.”

While this year’s upfronts were marked by a greater number of deals tied to Internet advertising, “the vast majority of the business is still done on the broadcast networks with the traditional 30-second announcement,” said Mike Shaw, ABC’s president of sales and marketing.

Although many analysts had predicted that “certain advertisers (would) cut back, they did not,” Shaw added.

Last year, the networks signed roughly $9 billion in ad deals combined during the upfronts, or roughly 80 percent of all prime-time commercial time booked for the season. Total volume this year was reported to be running about the same.

Source: Reuters

Vivendi stays 20% in NBC

PARIS, December 14 /CNW/ – Vivendi has informed GE of its decision not to exercise its exit rights with respect to NBC Universal in January 2007. Vivendi will remain a shareholder in NBC Universal, in which it has a 20% stake.

Simultaneously, the agreements between Vivendi and GE have been modified. The timeline of Vivendi’s right to demand an IPO of NBC Universal and of GE’s right to call Vivendi’s interest have been extended.

Vivendi’s demand right can now be exercised in November each year from 2007 to 2016 with the closing at market value taking place over the following

year. Similarly, the call option in GE’s favor can be exercised in May each year from 2011 to 2017 with a floor price of $8.3 billion that will increase

each year from May 2009 based on the US Consumer Price Index.

Lastly, Vivendi’s liquidity right in the first year has been increased to $4 billion (from $3 billion) and remains $4 billion each year thereafter.