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Cable Upfront Wrestles with Slow Start

7/28/2006 9:33 AM Eastern

The dog days of summer are approaching and cable still has a lot of work to do in wrapping up a languishing upfront-advertising marketplace.

After almost six weeks of protracted negotiations, ABC closed the broadcast side of the annual Madison Avenue bazaar just before the Fourth of July weekend.

The upfront -- during which ad agencies secure schedules for their clients during the upcoming TV season -- was slowed out of the gate by the Alphabet’s initial insistence that live-plus-seven-day viewing be the measurement metric of choice and then tough negotiating over prices in which media buyers managed to keep vendor CPM (cost per thousand homes) gains to a minimum.

The upshot: The five broadcast networks rang up just under $9 billion, down 1% from $9.1 billion the prior year.Moreover, CPM-pricing increases topped out at 2% and 3% for Fox and ABC, respectively. However, media buyers disputed those ratios, and therein lies a problem for cable.

“Some broadcasters got 1%-2%. We held the line there,” an executive at a media-buying agency said. “The best cable is going to get is flat or 1%.”

Given that mindset on the buying side, moves by some clients to hold more dollars for the scatter market and the fact that the medium didn’t take center stage until after the Independence Day holiday, the cable market is playing catch-up in terms of chasing dollars and closing deals.

Merrill Lynch media analyst Jessica Reif Cohen reduced her upfront estimate for cable to a 3% increase to $7.3 billion from an earlier forecast of a 5% advance.

Some industry watchers believe MTV Networks has written up to 90% of its upfront business, and TNT and TBS, through Friday, could have closed on as much as 70%-75% of their upfront action, with the latter’s CPMs either flat or edging up 1%.

Elsewhere, sources said A&E Network is up over last year’s upfront levels, driven by solid sales against syndicated acquisitions The Sopranos and CSI: Miami.

All of the aforementioned cable programmers declined to comment about their upfront status.

Elsewhere, executive vice president of advertising sales Steve Gigliotti reported that Scripps Networks -- which includes Food Network, Home & Garden Television and DIY -- has “done some deals and is almost completely registered” with the rest of the agencies. “We’re just beginning to negotiate those plans,” he said. “We’re extremely pleased with where we are.”

Hallmark Channel executive VP of ad sales Bill Abbott said his team has adhered to an upfront game plan to “bring up pricing” on the network, which, he added, is below market standards, particularly given its family-friendly fare and ratings ascent.

Abbott said Hallmark had done about “one-quarter of its upfront business” by Friday morning, adding that the remainder is “ready to close. It could all come in a three-day spurt. It will be an August, rather than a June, upfront.”

September