Tune-In Would Rise, But War Raises Costs

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New York— Big ratings for coverage of a war in Iraq won't necessarily translate into huge profits for the all-news networks.

Although Cable News Network, Fox News Channel and MSNBC would no doubt garner improved Nielsen Media Research ratings from such coverage, the networks will likely pre-empt advertising for major stories — especially during early days of the war, executives said last week.

And alongside the increased drumbeat for a conflict in Iraq from the Bush administration, there was talk early last week of advertisers like American Express seeking a "war clause" or other flexibility from broadcast and cable networks. That subject also came up during the Cabletelevision Advertising Bureau's Cable Advertising Conference in New York last Tuesday.

But later, even after renewed fears of related Al Qaeda domestic terrorism, various buyers and sellers claimed not to be pressing for the addition of such terms in their media-buying agreements — at least not yet.

Costly efforts

Madison Avenue maneuvering aside, the costs of covering the war — from equipping and transporting reporters and their crews to Iraq and the surrounding region to paying for satellite time — will also affect the bottom line.

But as the networks girded last week for the expected war, some executives insisted money isn't foremost on their minds.

"This has been one of those stories where our bosses understand that we have to fully cover it, and we are fully covering it, and I couldn't give you a number [estimate on how much the network will spend]," said MSNBC vice president of live news programming Mark Effron. "I don't think on any level anybody is thinking of this story as anything other than an extraordinary important series of events that MSNBC is well-prepared to cover, and that there's a public service in covering those kinds of events in the best way possible."

One advantage for MSNBC is the news network's ability to share costs with NBC News, and to rely on NBC reporters who are assigned to Iraq and the surrounding region.

MSNBC also has partnerships with The Washington Post
and Newsweek, and the network's coverage of the war will include reports from reporters from those print publications, Effron said. As such, he said it was difficult to quantify how many reporters MSNBC could ultimately use in the region.

During the Persian Gulf War, CNN had about 200 staffers assigned to the region, including several in Iraq. Spokesman Matt Furman said the network currently has about 100 reporters, producers and other staff in the area, and expects to more than double its deployments there in the event of a war.

Both MSNBC and CNN officials said they will have reporters embedded with the U.S. military in the field, but they wouldn't name the journalists who will travel with the troops. It's not clear what Fox News Channel's plans are — spokeswoman Irena Steffen didn't return calls last week.

CNN's crew in Iraq include reporter Nic Robertson, producer and correspondent Rym Brahini and producer Ingrid Formanek. Both Robertson, who was then an engineer, and Formanek covered the Persian Gulf War.

CNN has planned for a $30 million budget to cover the war in Iraq. Furhman said the network doesn't expect to lose money covering the conflict.

Fox News is evidently well-prepared financially for the costs of covering the war. While the network's audience and cash flow have grown significantly during the past year, it hasn't increased its spending. The network's parent Fox Entertainment Group reported last week that Fox News more than tripled its earnings before interest, taxes, depreciation and amortization during the second quarter, while its operating costs remained relatively flat.

Buyers take stock

Back on Madison Avenue, executives on the buying side were warily sizing up the situation.

"We're trying to get conversations with all our clients to understand what they want to do in response to whatever happens," said MediaVest Worldwide president of U.S. broadcast Mel Berning.

CNN executive vice president of sales and marketing Greg D'Alba said clients had made no specific requests with regard to coverage of the Iraq war. Nor has American Express made any so-called war-clause stipulation in its media buys, at least thus far, he said.

"We have a 'sensitive-advertisers' list" whose commercials would be yanked, he acknowledged.

In any case, he said CNN will undoubtedly bump advertisers and go commercial-free for at least the first three days, then resume with a moderate commercial-break schedule.

As for the entertainment networks under Turner Broadcasting System Inc., spokesman Jim Weiss felt that there would be less impact since "people will want to escape once in a while" after the news networks and broadcasters begin extensive coverage of the early days of the Iraq war.

Most advertisers won't yank commercials entirely, as they did after the Sept. 11 terrorist attacks, he said.

"We're very sensitive to advertisers and their needs regarding the war," Universal Television Group president of ad sales Jeff Lucas said.

USA contingencies

Lucas acknowledged that Universal's services — USA Network, Sci Fi Channel and Trio — have talked with accounts in the travel arena about contingency plans.

"We want to work with them and see that their interests are protected," he said.

Discovery Networks U.S. is "in the midst of making programming decisions as it relates to the war," a spokeswoman said last Friday. On the ad-sales front, she said, it's so far gotten just one query on the situation from a client, an airline.

A Lifetime Television spokesman said that as of press time, clients had not approached the network about war-related flexibility in their ad contracts.

An ESPN spokeswoman said only, "We will work with our advertisers to meet their needs, as always."

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