Disney Sells a $1-Billion Ad Package

Walt Disney Co. has cemented an estimated $1-billion deal with a group of major advertisers in what could be the largest ever for a media company, an advertising executive said Monday.

The yearlong agreement guarantees prominence for the advertisers in shows and upcoming ABC events, including the Super Bowl, the Academy Awards and next year’s NBA playoffs.

Disney has been in talks for months to structure the deal with OMD USA Inc., one of the world’s largest advertising buying firms. OMD represents PepsiCo Inc., McDonald’s Corp. Apple Computer Inc., Universal Pictures, Gillette Co., Visa and other makers of well-known brands.

“It’s certainly never been done before on this scale and with this many entities,” said Dan Rank, OMD USA’s managing partner who handled negotiations for the advertisers. “This thing touches every single media unit of the Walt Disney Co. from ABC, ESPN, radio stations, the radio network and publishing to the Internet.”

The multi-network, multi-advertiser package eclipses last year’s $300-million deal between Procter & Gamble, which makes Tide detergent and Crest toothpaste, and Viacom Inc.’s television properties, including CBS and MTV.

Disney executives declined to comment late Monday.

In addition to selling commercial time on ABC, ESPN networks, ABC Family, Lifetime, A&E; Networks and other Disney properties, the Burbank-based company also agreed to joint program-production deals with advertisers, joint funding of television specials and sporting events as well as product placements in shows, sources with knowledge of the deal said.

OMD’s Rank would not comment on specific terms or which advertisers were included in the deal. He also declined to quantify the rate discount that Disney offered to advertisers who joined the package.

For Disney, the ABC network, which has struggled in ratings, will be the largest beneficiary, with the advertisers agreeing to buy up to $500 million in commercial time on the network, including $300 million during prime-time. The ESPN networks will take in about $150 million, sources said.

Such package deals are becoming more common because of the rapid consolidation of media companies and advertising agencies.

Five media conglomerates own the six top television broadcast networks and the most popular cable channels.

On the other side of the table, a handful of companies represent the nation’s largest advertisers, making it easier for both sides to negotiate package deals.

OMD is putting together another so-called cross-platform deal with AOL Time Warner Inc. properties, although the Disney deal dwarfs that package.