Major Networks’ Gloom at Fall Ad Sales Prospects

12 March 2001

As representatives of the nation’s largest advertisers, agencies and TV networks prepare for talks about the so-called ‘up-front market’ (the annual springtime poker game to determine the cost of a 30-second ad spot for the fall schedules), two major question marks loom over the time honored ritual.

The main issue is that of the economy and its effect on the fast-softening US ad market. The second is the threatened strike by Hollywood actors and writers, which could seriously disrupt network program production. Each in isolation weakens the hands held by the TV companies; together they effectively deal a straight flush to advertisers and agencies as the multi-billion dollar stakes pile up on the table.

Leading media forecaster, New York-based Myers Reports, predicts that the seven broadcast TV networks will harvest significantly less cash than they did in the Spring 2000 round. Publisher Jack Myers estimates the shortfall is likely to be between 4% and 7%, the first significant decrease in the up-front market since the 1993-94 TV season.

The triple whammy, says Myers, is likely to be … “a laggard economy that some people call a recession” … “the possibility of less compelling [program] content”, due to a strike … and “the dot-com fallout”.

The situation was succinctly summarized by Jon Mandel, co- managing director at Grey Global Group’s MediaCom in New York: “I'd rather be on this side of the desk this year.”

News source: New York Times