Fox, NBCU Join TV’s Early Upfront Sales Push (EXCLUSIVE)

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Fox Corp. and NBCUniversal have started to write early deals in TV’s upfront market, a sign that networks and at least one large media buyer have started to come to terms on pricing that could govern the flow of millions of dollars of investment from Madison Avenue.

Publicis Media, part of France’s Publicis Groupe, has started to wrap some business in this year’s market for advance advertising commitments, according to four executives with knowledge of current negotiations. These people noted that Publicis, which recently won the U.S. media business of Anheuser-Busch InBev and represents companies including Walmart and Facebook, has become a tone-setter in negotiations, owing to the growing volume of dollars it oversees.

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A spokesperson for Publicis Media could not be reached for immediate comment. Fox and NBCUniversal declined to make executives available for comment.

The activity suggests Madison Avenue continues to place importance on TV advertising, although executives say streaming video is also occupying a great deal of advertisers’ attention. Either way, a good portion of the most-watched content for either venue is made by traditional companies like Fox and NBCU, among others. Disney, another traditional U.S. media company with a substantial content portfolio, completed some deals last week in advance of the Memorial Day holiday.

One factor in this year’s negotiations is most networks’ acceptance of lower rate hikes than in 2021, according to people familiar with talks. At issue is the cost of reaching 1,000 viewers, a measure known as a CPM that is central to these annual discussions. In 2021, with ratings in decline across most broadcast properties but demand from companies on the rise after pandemic conditions subsided, the networks sought massive CPM increases ranging from 16% to 22% — whopping hikes even in more typical conditions.

In 2022, however, discussion about CPM hikes is hovering in the range of 8% to 12%, according to people familiar with discussions. The networks seem eager to take in whatever volume of dollars they can, and to do so, they are willing to pare back pricing increases.

The networks face a mixed bag in terms of spending. Pharmaceutical advertisers, who favor long-form TV ads because they need to disclose side effects related to the medications they sell, are ready to spend, according to executives familiar with the market. But TV networks remain concerned about auto spending, which has been crimped by supply chain issues. The networks are hopeful that automakers will seek to reserve time for 2023, when there is an expectation of new model launches. Technology  spending, a mainstay in recent years, is also seen as being shaky, as tech giants express concern about ad spending amid a choppy stock market that has clipped the shares of several big players.

At least one media company is being more aggressive than its peers. The newly formed Warner Bros. Discovery is seeking high commitments to get to its most-watched “premier” programming, which now includes top-tier sports like NBA, MLB and NHL in addition to Discovery mainstays like “Shark Week.” In a memo sent to employees last month, Warner Bros. Discovery CEO David Zaslav indicated that he wanted to “outperform” in upfront negotiations. With rivals eager to take in volume, the company may find maintaining its current stance to be a challenge.

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