$6 Billion in Advance Network Ad Sales

Amid doom-and-gloom predictions about a tide of money flowing to cable TV, the major broadcast networks managed to book an estimated $6 billion in advance prime-time advertising for next season--roughly equivalent to preseason sales last year.

Reported advertising buys for the coming year, most of which were booked last week, nevertheless represent a soft market compared with recent selling seasons. Despite a declining share of viewers, the networks have recorded steady increases in ad sales, mainly because of the networks’ ability to reach a vast national audience.

The soft market, combined with the substantial increases in what the networks are paying for rights to broadcast NFL football and fees to license hit series such as “ER” and “Mad About You,” paints a bleak picture for networks.

What is more, analysts estimate that many of the networks sold more of their commercial inventory upfront rather than holding it for the so-called “scatter” market once the season begins, and opened up new commercial time in order to match last year’s performance.

“The total dollars going to prime time should be flat,” said Jean Pool, executive vice president of North American media buying at ad agency J. Walter Thompson. “When you consider the [rising] cost of programming, it’s very negative for the networks.”

What remains to be seen is how much additional money ends up going to cable, after predictions that the medium’s gradually increasing ratings would eventually begin to take ad dollars from the networks.

“I’m sure that some money will go to cable,” said Larry Hoffner, NBC’s sales chief. “There’s always money that goes to the cheaper medium.”

Although cable networks had been expecting double-digit increases in prices, analysts predict the industry will earn a more modest rise. “Lots of advertisers stepped up to broadcast in the eleventh hour because the networks’ prices were unexpectedly rational,” said Bill Croasdale, president of national broadcasting at Western Media.

Some network executives say that was calculated to keep money from flowing into cable.

NBC remains by far the leader in ratings and revenue. Network officials indicated NBC’s total billings will at least equal the record $2.15 billion that General Electric-owned network netted a year ago.

“The big winners this year were two of the newcomers--Fox and the WB,” said Jon Mandel, director of national broadcasting for Grey Advertising. He said WB, capitalizing on its popularity with teens, was about to command price increases of 15% to 20%, and that Fox’s rates jumped between 7% and 9% over last year. “Everyone else was below that.”

Fox, which is owned by News Corp., pulled in roughly $1.2 billion, despite programming a third fewer hours in prime time than ABC, CBS and NBC.

WB essentially doubled its take to $300 million while offering half as many hours of prime-time programming as the major networks, which deliver 22 hours in prime time each week.

WB can attribute its gains largely to movie studios and other sponsors courting the youth market drawn to WB’s “Dawson’s Creek,” “7th Heaven” and “Buffy the Vampire Slayer.”

Industry sources say ABC eked out between $1.5 billion and $1.6 billion. The Walt Disney Co.-owned network has experienced significant ratings declines over the last two seasons. “The network was perceived by advertisers as the least likely to succeed,” Mandel said.

CBS is expected to finish at or near the $1.25 billion the network billed last year, with the network continuing to lag because of its older audience profile. Network sources say that CBS held more inventory back to sell later in the season.

Meanwhile, Mandel estimated that UPN would be lucky to match the $115 million it booked last year. “UPN was just not a factor,” said Mandel. “They can’t explain who they are to advertisers.”

UPN, which is adding a new night of programming this fall, insists it hit the $200-million mark.