Conan O’Brien, NCAA deal put Turner Broadcasting into TV big leagues, David Levy says

For more than four decades, the broadcast networks have set aside a week in May for staging splashy presentations in Manhattan to unveil their fall schedules for advertisers. The annual ritual kicks off television’s ad sales season, known as the upfronts, when the networks sell more than two-thirds of their commercials for the coming season.

Cable powerhouse Turner Broadcasting System two years ago crashed the party. The division of Time Warner Inc. decided to pitch its shows on TNT and TBS during the week reserved for major broadcast networks ABC, CBS, Fox and NBC. Turner’s message: It was now one of the big boys.

It might have a point. In recent months, Turner Broadcasting landed comedian Conan O’Brien, who will bring his show to TBS in November, and struck a $10.8-billion deal to televise the NCAA basketball playoffs along with CBS for the next 14 years.

Company Town met up with David Levy, president of Turner Broadcasting sales, distribution and sports, to discuss the advertising market and outlook for the TV business.

A year ago, the ad market was in the dumps. What’s surprised you about the turnaround?

Certainly, there are signs that we are coming out of the recession, but there are challenges ahead. A year ago, advertisers weren’t sure how strong their businesses were going to be, so they kept dollars back. Since then companies have reorganized, closed brands that were unsuccessful and come out of bankruptcy. They reset their targets and goals for sales. Now there is more clarity and visibility. Advertisers are getting back into the competitive race. This upfront you are going to see more volume. Demand is going to be strong.

How long will the broadcasters maintain their ad rate advantage over cable networks?

There is only one genre left, entertainment, where there still is a difference. There are no differences in [advertising rates] in sports, news or kids programming, which has become a cable business. As we add Conan O’Brien, George Lopez, the NCAA, shows like “Fallen Skies” and “Glory Daze” and other original programs to our lineup, we will continue to close that gap.

How did the NCAA deal come together, and how is that going to be a game changer?

We looked at [bidding] as an individual company and we looked at doing it with partners. We thought the best possible partner was to stay with the incumbent, CBS, who has had a long tradition with the NCAA and had done a terrific job. Then we could put our production capabilities, our talent, our digital capabilities and our sales organization in with theirs. We thought the two of us made the most powerful combination. It truly is a landmark deal for Turner Broadcasting. To be able to have the Final Four and the championship game on Turner is showing that even the sports world is coming to cable. People watch television. They don’t differentiate between cable or broadcast.

Would Turner like to get bigger in sports?

We carry the best of the best in sports programming: the NCAA tournament, Major League Baseball, NBA basketball, the PGA championships and NASCAR. When I look at properties to purchase for our company, it has to be good for our advertisers, good for our audience and good for our distributors, and fit our brand. We certainly would look at properties like the NFL. The key to all of this, though, if it doesn’t fit our financial models, then we won’t do it.

CNN has been struggling in the ratings after the stellar year with the presidential election in 2008. Has CNN become a harder sell?

You know, it hasn’t. The brand is still very strong. CNN still has the largest total reach for viewership when you look at it across a full day, and when you look at it from the Internet and mobile perspective. CNN lives in a lot of different places. I’m not going to kid you, we are focused on bringing the ratings up on television as well. That’s a priority here in this company.

What type of advertising integrations are you discussing with Conan O’Brien? Are we going to see Triumph, the cigar-chewing dog, sell Dove soap?

There is so much excitement from the advertisers around Conan O’Brien, an Emmy Award-winning comedian who reaches a target demographic that everyone wants. He owns his show, so he’s going to have an incentive to be advertiser friendly. His whole organization wants this to be successful. You are going to see product integrations and possibly even live commercials with Conan.

meg.james@latimes.com