Fox wraps upfront advertising sales at nearly $1.8 billion
The Fox broadcast network, which suffered a prime-time ratings free-fall during the just completed TV season, has closed out its upfront advertising sales with its total haul falling short of last year’s auction.
Despite its ratings woes, Fox was able to hike its ad rates by 5% to 7% for prime-time commercials for the 2013-14 television season, according to a person familiar with the negotiations. The News Corp. network secured commitments from advertisers totaling $1.75 billion to $1.8 billion, which represents about an 8% decline from its year-ago amount.
Ratings declines at all the broadcast networks seem to be taking a toll.
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“Buyer demand has come in a bit weaker than last year with ‘reported’ pricing in the mid-single digits,” Nomura Securities media analyst Michael Nathanson wrote in a report early Wednesday. He noted that “the underlying TV economy is not growing, while dollars are shifting out of broadcast and into cable.”
Nonetheless, Fox has big hopes for a brighter season.
In February it will televise the biggest event of the year, the Super Bowl, and the network plans a dramatic overhaul of its longtime tentpole, “American Idol.” The aging singing competition show dropped 20% in the ratings this year as the new kid on the block, NBC’s “The Voice,” hit the ratings high notes.
Nearly the entire cast of “American Idol” and two top producers have been herded off the stage, joined by the network’s top executive for unscripted shows.
David Hill, the colorful former chairman of Fox Sports and a longtime lieutenant of Rupert Murdoch, will help re-engineer “American Idol” for the upcoming season. Pers Blankens, lead producer of the popular “Swedish Idol” for more than five seasons, was hired to produce the show.
Last week, the No. 1-ranked CBS and the small CW, a joint venture between CBS Corp. and Warner Bros., closed the book on their upfront sales. CBS notched nearly $2.6 billion in sales, mustering rate increases of as much as 7.5%. Total volume was on par with last year. CW accepted orders totaling nearly $410 million.
Walt Disney Co.’s ABC and Comcast Corp.’s NBC continue to haggle with advertisers. The broadcast industry is expected to finish the auction below the high water mark of $9.2 billion established several years ago.
The market is called the upfront because broadcasters sell roughly two-thirds of their commercial inventory in advance, or “upfront,” of the new season. Advertisers like to place their orders during the upfront market because networks will provide ratings guarantees. Networks then are on the hook to compensate advertisers for audience shortfalls. Buying leftover time later in the year is more risky for advertisers because prices are typically higher and networks don’t guarantee their ratings.
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