Final Cable Upfront Tally Seen as Down 12 Percent

In what proved to be the softest summer market since 2001, cable saw its 2009-10 upfront take diminish by 12 percent, as the networks wrote $6.73 billion in business.

While the Cabletelevision Advertising Bureau has yet to issue a definitive tally, network and media agency sources concur with the estimate, which was derived from a base sum of $7.65 billion in the 2008-09 bazaar.

Contributing to the $920 million shortfall were a mix of battered client budgets, mid-single-digit CPM rollbacks and a desire on the part of ad sales executives to hold back inventory for scatter––a strategy that has paid off thus far in the fourth quarter, as avails fetch high-single-digit premiums over upfront pricing.

This year’s protracted negotiations made it impossible for the CAB to arrive at a sum before the start of Q4, although now that the last of the third-tier stragglers have crossed the finish line, the organization is getting closer to a final reckoning.
Two years ago, cable nailed down $7 billion in upfront business, up 6.5 percent versus the 2006 upfront.

As ad spending begins to creep back to pre-recessionary levels, analysts believe that cable will enjoy a significant lift in the near term. Earlier this week, UBS forecast cable ad sales will grow 6 percent in 2010, with Discovery Communications, Walt Disney Co. and Scripps Networks expected to see ad dollars increase 7 percent. The Turner nets and News Corp.’s cable properties should see a 6 percent uptick, per UBS, while Viacom could grow its ad sales revenue by as much as 5 percent.
“We believe that a return to the historical trend will lag into 2011, but … the bottom line is that the advertising spending trend will return to historical levels,” the UBS report concluded.  

Meanwhile, Credit Suisse estimates that broadcasters saw a 22 percent drop in volume, as the networks booked $7.2 billion in upfront business. All told, some $2.9 billion in TV dollars was left on the table this summer.