News

3Q Options Muddy the Upfront Waters

5/04/2001 8:52 AM Eastern

You couldn't blame television and advertising executives for reaching for
the Excedrin.

Faced with a May 1 deadline to exercise their third-quarter options, a number
of advertisers canceled orders, while others tried to extend their options in
deference to the continuing labor negotiations between the Writers Guild of
America and the Association of Motion Picture and Television Producers.

This round of cancellations of last year's upfront advertiser commitments was
less severe than the one that came earlier in 2001, most of the networks
contacted agreed. But the cancellations were still greater than those made at
this point in prior years.

As of press time, negotiations between the writers and studios were
ongoing.

Some network executives believe significant further cutbacks of third-quarter
commitments could cast a pall over this spring's 2001-2002 upfront market.

Lifetime Television executive vice president of ad sales Lynn Picard said
Thursday that 'a few clients wanted extensions until the end of [last] week.'
The network granted those requests.

Picard said she'd heard that some networks suffered from cancellation rates
as high as 15 percent from marketers who sought relief from year-ago upfront
commitments.

'We're a lot less than that because we're doing so well,' Picard added.
Lifetime was the top-rated basic-cable network for both the first quarter and
April, according to Nielsen Media Research.

Network ad-sales executives and Wall Street analysts have wondered for months
if major clients would seek further relief from their 2000-2001 upfront buys.
Earlier this year, General Motors Corp., Procter & Gamble Co. and others cut
hundreds of millions of dollars from upfront deals made last spring.

Back in April, Discovery Networks U.S. executive vice president of ad sales
Bill McGowan estimated that marketers earlier this year slashed some $300
million from cable's year-ago upfront and $400 million from their broadcast
outlays.

During last Thursday's 'BigTalk
' question-and-answer session on TVinsite.com

(the Web portal of Cahners Television Group), MediaCom Worldwide co-managing
director Jon Mandel said the effect of third-quarter options was still unfolding
in the marketplace.

'The short answer is we don't have answers yet,' he
said.

Want to read more stories like this?
Get our Free Newsletter Here!
March