Fox, CW finish the upfront with 7.5%-9% increases


Fox and CW said they have completed their upfronts for the coming TV season, as ad buyers said the rebounding economy boosted prices from last year. Advertisers have also started buying some cable ad time in Conan O’Brien’s coming late-night show, set to debut on TBS in November, the network said. The show is securing rates that are close to, but still short of, those for Jay Leno on NBC or David Letterman on CBS, according to a WSJ article.

The deals stand in contrast to last year’s recession, when haggling dragged on through much of the summer and networks were forced to accept lower rates.

Fox was able to secure 8% to 9% increase in CPMs, while the CW wrangled about 7.5% increases, according to the story.

Other networks that air more hours per week, including ABC and CBS, were actively making deals with advertisers 6/4, but not complete.

People close to Fox and the CW told WSJ they saw increases in the dollar value of their upfront commitments. Fox sold about 80% of its inventory, grabbing an estimated $1.8 billion and $1.9 billion in ad commitments, one of those people said. The CW won commitments for around 70% to 75% of its inventory for between $365 and $380 million.

Last year, Fox brought in $1.63 billion and CW took in $350 million, according to estimates last month from Jessica Reif Cohen, an analyst at Bank of America Merrill Lynch Global Research. She projects the five biggest English-language networks will see upfront commitments rise 15% from last year to $7.78 billion.

Meanwhile, Marci Ryvicker, analyst at Wells Fargo Securities sent out an update to clients 6/4: “TELEVISION: Latest reports suggest that the upfront has broken, with the CW and FOX (NWS – covered by J. Janedis) selling more inventory (65+% for CW and 80% for FOX) at higher CPMs (+7.5% for CW and +8-9% for FOX) than last year. CBS and ABC (DIS – covered by J. Janedis) are holding out for low double digit CPM increases.”

The “covered by J. Janedis” notations are for the mega-media companies, News Corp. and Disney, which are covered by John Janedis for Wells Fargo Securities. Marci covers the pure play broadcast and outdoor companies, including (as far as the Upfront is concerned) CBS. She made no mention of NBC, which of course is currently under GE, which would be yet another Wells Fargo analyst.

RBR-TVBR observation: Our guess would be that, given their success this past season, with scatter up more than 20% from the Upfront, Les Moonves and Bob Iger would be willing to hold onto inventory at CBS and ABC again if they can’t get CPMs at least 10% above last year’s Upfront. That gamble certainly paid off this past season.