NBC, CBS, Fox, CW kick off 2014 upfront advertising market


Television’s annual advertising auction is underway.

Fox, NBC, CBS and CW have begun selling their commercial slots for the upcoming television season as part of the annual auction known as the upfront market, people familiar with the process said Wednesday.

The ad market appeared to be moving a bit slowly -- with both sides giving ground on key points to secure deals.

Networks have asked advertisers to pay for viewers who record and watch a show within seven days after its initial broadcast.


In return, advertisers have demanded that some networks slash their ad rates to compensate for the extended viewing window. At least one major advertising agency is negotiating deals that include payments for viewers who watch a show within a week after its network debut.

To get this year’s market moving, Fox agreed to lower prices for its prime-time spots.

The broadcast network, owned by Rupert Murdoch’s 21st Century Fox media company, had less leverage with advertisers this year because it just wrapped up a disappointing season with plummeting ratings for its regularly scheduled programs, including “American Idol.”

Last week, Fox’s entertainment chairman, Kevin Reilly, announced he would leave the network after seven years.

Movie studios were the first to strike deals, which is typical because the studios want to lock in premium TV time to promote their big-budget film releases.

NBC has been able to raise its prices. NBC saw its prime-time ratings jump 17% in the just-ended season in the key audience demographic, boosted by such shows as “Sunday Night Football,” “The Blacklist” and “The Voice.”

The peacock has been securing rate increases of about 8%, according to a person with knowledge of the discussions.

In contrast, Fox’s rate increases appear to be closer to 3% to 4%.

NBC’s parent company also negotiates its deals different from the other networks.

NBCUniversal, owned by cable giant Comcast Corp., bundles commercial time on the NBC network with advertising inventory for its cable channels, including USA Network, Bravo, E! and Syfy. The company for the last two years has tried to capitalize on an economic theory of a “rising-tide-lifts-all-boats.”

Also on Wednesday, CBS and CW executives were negotiating with leading ad buyers, people close to the negotiations said.

CBS owns 50% of the small CW broadcast network, which last month impressed some ad buyers with its new shows, including “The Flash” and “Jane the Virgin.”

The CBS network, the marquee property of CBS Corp., benefits from the most stable prime-time schedule in television with such returning shows as “The Big Bang Theory,” “NCIS,” “Elementary” and “Survivor.”

CBS rolled out promising new shows, including “Madam Secretary,” a political drama with Tea Leoni.

CBS also is expected to score ratings touchdowns this fall with its NFL Thursday night football package. Advertisers have been snapping up time in NFL football, although CBS was not selling commercials in Thursday football as part of its upfront negotiations.

It was unclear late Wednesday whether ABC had started its sales.

The auction is known as the upfront market because the networks sell two-thirds of their advertising time in advance of the upcoming season. Advertisers make commitments to buy ad spots for a certain price in exchange for the network guaranteeing audience levels.

If a show does not deliver the audience promised, then the network is obligated to compensate or “make good” on the ratings deficiency by providing additional time.