Paramount Upfront Is All But Wrapped With High-Single-Digit Price Gains; NBCU And Fox Also Near Finish Line In Mixed Overall Ad Climate – Update

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UPDATED with new details about Paramount’s upfront sales results. Paramount has nearly completed its upfront sales process, recording high-single-digit price increases compared with last year, according to a person familiar with the negotiations.

In addition to price increases, the parent of CBS, Nickelodeon, MTV and Paramount+ said volume was up across all platforms, but particularly in digital. In an appearance at a Wall Street conference earlier this week, CEO Bob Bakish signaled earlier this week that the company was nearing the finish line.

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Buyers responded well to the CBS fall schedule, according to the insider, as well as tentpole events and NFL broadcasts. Volume rose in every daypart on CBS.

Category-wise, travel and entertainment has continued to rebound after the severe pullback during peak Covid times. Pharmaceuticals, direct-to-consumer brands, banks and household/personal care have also shown particular strength.

The CW also has wrapped its upfront sales, according to a person familiar with the process. Volume up in digital but steady in linear primetime, but pricing increases of 9% to 11%. Paramount and Warner Bros Discovery currently co-own the CW but the companies are reportedly in discussions with Nexstar Media Group about the company taking a majority stake.

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Three leading media execs said upfront sales will wrap up shortly with Paramount and NBCUniversal seeing increases in the high single digits, according to CEOs Bob Bakish and Jeff Shell.

Fox Corp. CFO Steve Tomsic was on board with a 9%-to-12% range presented by analyst Doug Mitchelson at a CSFB investor conference Tuesday, noting the strength of the company’s news and sports. The execs spoke in back-to-back to Q&As.

Shell is “thrilled” with the increase since NBCU had expected a lower “mid-single-digit” boost coming in. Volume is comparable with last year. He said declines in “viewership and distribution due to cord cutting and everything else was offset by pricing at Peacock.” The addition of the streaming service has made NBCU the biggest advertiser at the upfront, he said, and sales are pretty much complete with only a “smattering” left.

Paramount is about “80% to 90%” done – “so almost there but not totally,” said Bakish, citing price increase in the “high singles” for both broadcast and cable, and digital volume up “significantly.” He thinks that’s partly from competitors “doing some things that are probably too aggressive on the linear pricing side — because we have seen agencies add digital volume as the upfronts go on.” He didn’t elaborate on who did what.

Tomsic noted “really, really strong levels of commitment, which are north of where we were at this time last year. And just as important in all of that, apart from doing it with all of our traditional linear nets, we’ve been able to get really really strong interest and commitments for Tubi,” its AVOD service.

It’s an executive window into an upfront season that’s been taking some time to close after presentations in May amid rather intense economic uncertainty.

“Net-net the market’s a little tough for sure,” Bakish said. “Visibility is mixed and there are some challenges given the economic headwinds. We are seeing some categories that are affected by things like supply chain and inflation, but we are also seeing some categories that are doing well – travel, movies, sports. And politics will be a huge plus in the second half of the year.”

Shell said NBCU is starting to see some weakness in the scatter market, but it’s very segment specific. Auto spend is extremely weak, likely driven by the lack of inventory — so a supply chain issue, not inflation, he said. Pharmaceutical advertising is also soft.

Inflation is near a 40-year high making goods and services of all kinds more expensive. There’s a fear of recession as the U.S. Federal Reserve raises interest rates to combat rising prices And the pandemic is having a lingering effect on global manufacturing supply chains. Companies, faced with higher costs and uncertainty, are trimming ad budgets.

Tomsic noted an “element of softness to things like linear entertainment, which is a relatively small component” of the Fox portfolio. “The whole macro world is trying to talk ourselves into a recession, but we’re really not seeing it from the perspective of what we’ve seen from the upfront.”

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