Cable network sales executives anticipating a surge in upfront sales activity last week remained disappointed, as there seemed to be more negotiating than deal-making at the annual Madison Avenue bazaar.
Alternately describing the upfront either as stalled or developing, many sellers continued to speak as much about budget registration as actual deals. Nor were buyers in a hurry to push matters along.
"The news is there is no news," said PHD New York executive vice president and general manager Tom DeCabia last Thursday.
The reason: an ongoing battle over pricing. Agencies have been pressing the networks — especially the general-entertainment networks — to lower their costs per thousands (CPMs) and programmers stubbornly have been trying to hold the line.
Jack Myers, CEO of Jack Myers LLC, which publishes the daily newsletter Jack Myers Report
, last Thursday agreed: "The buyers and sellers are at an impasse on CPMs right now. But, I believe the buyers will be forced to blink first.
"Although USA went to the market early with CPMs that were down 10 percent, most networks are holding the line on positive CPMs," Myers said. "Overall, including USA, the market should be flat to plus 2 percent in CPMs."
That's what others on the network side were maintaining last week.
"We've written some business this week and all have been in the positive CPMs," Fox Cable Networks executive vice president of ad sales and entertainment Bruce Lefkowitz said. "But like everybody else, there aren't a lot of deals being done."
Industry standard-bearer Turner Broadcasting Sales Inc., whose various network properties have historically accounted for as much as 25 percent of network upfront volume, also put a sanguine face on the sales ritual.
"Things continue to go well. We've closed several more [upfront] deals — all positive [CPM] deals," spokesman Jim Weiss said. "Volume is up substantially."
Many industry sources said last week that Turner's agency negotiations had stalled over CPMs, something that may be holding up other dealmaking or paving the way for contracts.
"Turner's position is indicative of the mindset of the vendor community. Holding out for CPM increases legitimizes their and our position," said one network executive. "But they haven't done deals with three or four major buying shops. Something should break one way or the other soon."
Other networks also wrote business last week.
Discovery Networks U.S. inked a cross-media upfront deal with Procter & Gamble Co. Some industry sources put that buy, via MediaVest, at some $50 million.
According to a Viacom Inc. source, last week was an active one for TNN, "with a lot of business for the shows appealing to adults 18 to 24, like wrestling and animation, that the broadcast networks couldn't accommodate. There has also been some deals for some of the older-skewing programming. Pacing and volume are strong, way ahead of last year. [CPM] pricing is good."
Hallmark Channel executive vice president of sales Bill Abbott said: "We've written some 52-week bigger-picture, sponsorship deals across various holdings. Deals are being done at positive CPMs. We're about 25 to 30 percent done."
The targeted networks, particularly those reaching the young adults, have been enjoying a solid upfront. Last Thursday, Taco Bell Corp. announced a $15 million upfront deal with MTV: Music Television.
Sources said that E! Entertainment Television had scored a number of deals over the past few weeks, amounting to about two-thirds of its upfront allotment.
The younger-skewing networks have been helped by the same categories that were active during the broadcast and syndication upfronts: movies, autos, retail, cosmetics and beverages.
But the types of movies (action-adventure) and autos (trucks) that have been in play haven't necessarily been a good match for the female-oriented Lifetime Television, according to executive vice president of sales Lynn Picard.
Nevertheless, she said the company's upfront was "pretty much done. We're still working on some calendar deals."
Lifetime's deals ran the gamut on a CPM basis. "We didn't do CPM deals without big volume gains. We certainly took some dollars out of the marketplace," she noted. "If the market is up 10 percent and supply [with more networks selling avails and improved ratings stories] is up the same, it's about share."
Despite many of the aforementioned deals and the significant positions from USA, Lifetime, MTV and, to a lesser extent, Turner, several network executives estimated that only 40 percent of the industry's upfront avails had been accounted for as of late last week.
For his part, Myers continued to project that cable's upfront will grow anywhere from 12 percent to 20 percent beyond the year-ago $4 billion volume.
"The broadcasters sold 85 percent to 90 percent of their inventory," noted a veteran seller. "Cable will get the business now in the upfront, or later in scatter."