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ABC, CBS Talk Tough as Upfront Negotiations Stall

Buyers unwilling to pay more than 7% increases, networks want same 9% as Fox got

ALSO READ: "Ad Buyers Balk at Turner’s Bid for 13% Hikes."

While the Fox network ad sales team will be off to early dinners on Friday, having completed its upfront deals with all of the media agencies, executives at two of the other networks ABC and CBS, NBC — are mired in debate over pricing.

While the stalemate may be broken by Friday night, it’s more likely that both sides will ponder their next moves over the weekend.

Fox, which has only 12 hours of primetime ad inventory per week to sell, breezed through its negotiations and got an average of 9 percent cost-per-thousand increases on its deals. Fox, of course, won the regular season ratings race among the 18-49 age demo, and also won 18-34 and teens.

But CBS and ABC are telling the media agencies that they want at least the same average rate increases as Fox — if not a little higher — while the buyers are offering 7 percent. That percentage of difference might seem small, but when one agency is spending $1 billion across all the networks, 1 or 2 percent difference can amount to a huge amount of money.

CBS is posturing that it is "the most watched network," winning this past season in viewers. It was also second in the 18-49 race, and argues that if "American Idol" is taken out of the Fox ratings equation, CBS would have won the 18-49 demo for the season. And CBS procedural dramas do better in repeat than any on television on a year around basis.

ABC has a mega-viewer producing show of its own in "Dancing With the Stars" and has several solid veteran dramas, along with the most upscale younger viewers. And ABC has successfully established Wednesday nights as a new night of comedy.

The networks are also pointing to the current scatter ad market, where advertisers are paying 25 to 30 percent more than they did for commercial time bought now than they would have in last year’s upfront.

The networks are saying if they don’t get the pricing they want, they will hold ad inventory back.

NBC, meanwhile, is expected to tuck in behind CBS and ABC, although the network can and does negotiate using NBC Universal’s cable networks, so that can impact its pricing.

The CW offers a smaller, but targeted young female audience, aged 18-34, and can often get some premium pricing because some advertisers just want to reach young females and don’t want to pay for older and male viewers.

In not-for-attribution discussions with assorted network sales executives, most believe CBS and ABC will end up doing deals at an average 8 to 8.5 percent increases, just under Fox, with NBC around 5-6 percent.

But buyers, who also did not want to talk for attribution, insist that they won’t budge beyond 7 percent for ABC and CBS — and lower for NBC.

Don’t expect the stalemate to last more than a few days, however, despite the tough talk. As one industry observer said, "There’s just too much money out there for the buyers to hold onto for too long. Once one major agency makes a deal, you’re going to see everyone go rather quickly."