Upfront on CBS' upfrontDespite discounts, Moonves insists that, overall, the network's CPM is up for the fall 7/08/2001 08:00:00 PM Eastern
Over the last two weeks of June, the much delayed prime time upfront marketplace finally happened, and estimates on how each network fared in terms of market share and pricing have been sorted out (B&C, July 2). Among the Big Four networks, buyers and sellers generally agreed that the numbers being claimed by ABC, Fox and NBC were reasonable ballpark estimates. But CBS, which had vowed to hold the line against reducing its pricing, took some flak on both the buy and sell sides about the accuracy of its upfront sales claims; top CBS executives wouldn't respond. Then last week, Leslie Moonves, CBS president and CEO, agreed to go on the record to discuss the network's upfront performance with B&C Deputy Editor Steve McClellan. An edited transcript follows.
As of this writing (July 5), how much prime time advertising have you sold in the upfront market?
We're a little below $1.4 billion, but not all of the deals are in yet, and we're confident that we will be north of $1.4 billion. There's still money being written.
CBS is the one major network claiming to have gotten price gains on a cost-per-thousand-viewers [CPM] basis in this year's upfront, but buyers report having done deals at 3% to 5% below last year's prices. What's the story?
Everything we have told the public is absolutely true. We are up in CPMs. Now, is a great deal of that due to Survivor
So you also did deals that are in line with the price declines buyers are talking about.
Did we do some deals that were down? Yes. However, we will have sold approximately 65% of our inventory, and we'll be north of $1.4 billion. Which means, with any luck in scatter at all, we're going to be in terrific shape. So there is nothing erroneous in anything we've reported at all.
How many and how big were the deals on which you accepted price cuts?
There were some, and they were not insubstantial deals. There were some—with our best customers, our best buyers. There were some deals that were minus, but overall we were plus.
For months, Viacom President Mel Karmazin was saying CBS wouldn't cut its rates for anyone, that it was going to be an up market pure and simple. Is it fair to say that that was an overstatement?
Did we have to take some deals minus? We did. Did we want to? No. Did we think we'd have to? Initially, no. But after NBC did, yes, we had to take some of our better clients at a little bit down.
But overall you're plus 1% to 2%?
That includes the P&G deal that was actually done before the general market broke?
Yes, the part that applies to prime time. That's all upfront money.
So you're happy with the way things turned out?
We are. I wish the economy were better. I wish we were plus 8%. Part of the reason we're feeling good is, on Thursday, we've gone from Diagnosis Murder
and City of Angels
to the No. 1 show on television, Survivor, and the No. 1 new show, CSI. Diagnosis Murder
got the lowest 18-49 number in history. Survivor
gets the highest amount that CBS has ever gotten for a regular series.
What about scatter? At this point, a lot of people don't see much of a market.
We're betting that, come the first and second quarter, there's going to be more money available, that the economy is going to turn around. In the fourth quarter, scatter is based on a lot of the movie money going into the holidays. We're going to get a huge chunk of that this year, for the first time. So we're betting on ourselves, and we're betting on the economy.
So you're predicting a strong scatter market?
You and I can have another conversation in February or March, and we'll see where the world is then. But we're confident. We're confident in our schedule, and we're confident in the marketplace. This isn't just Mel being rhetorical. We really believe it. And everything we've said is absolutely true.