Forecast : Weakest upfront in a decade


It will be one of the weakest upfronts in the last 10 years. That's how Salomon Smith Barney broadcasting and cable analyst Niraj Gupta described the upcoming advertising upfront market, which will break after the broadcast networks unveil their new fall schedules in May.

Speaking at Tuesday's Big Picture media conference in New York, Gupta said networks might be faced with flat prices this upfront and at best might realize increases of 4%. Gupta, and his colleague, Salomon Smith Barney entertainment analyst Jill Krutick said they think the networks will sell "much less" of their inventory in the upfront and thus the dollar volume will be less than last year's record $8.2 billion.

But networks with ratings momentum, including CBS, Fox and Univision should do well, Gupta said.

Krutick said she has revised pre-tax earnings growth estimates for the major entertainment companies for 2001 downward from the high teens to the mid-teens, on a percentage basis. And the average falls to about 8% if AOL and Viacom are excluded. Both of those companies will generate 30% EBITDA (earnings before interest, taxes, depreciation and amortization) or close to it, she said. Salomon Smith Barney and Broadcasting & Cable are co-sponsors of the event. - Steve McClellan