The cable and syndication upfront markets plodded along last week, as both buyers and sellers said it may take several more weeks, or longer, to wrap up business. Consensus estimates are that cable will be down 15%, to $4 billion. Buyers say syndication will be down between 20% and 30%, or to between $3.4 billion and just under $3 billion. Syndication sales executives say the market may drop 20% but not more than that.
Asked how the syndication market was moving last week, Marc Hirsch, president of Paramount Advertiser Services, replied, "Slowly, very slowly." By day's end last Thursday, Hirsch estimated that Paramount had sold 40% of the company's upfront syndication inventory.
As to pricing, Hirsch said, "It's not what I would have hoped for in April. We're writing our best stuff in line with the discounts the networks wrote for prime time," meaning, roundly, about 7%. But Hirsch said the weakest syndication product is being sold at price decreases exceeding 15% compared with last year. And he estimated that, among major advertisers, spending budgets are 15% to 20% below last year's.
Why syndication got slugged more than cable or the broadcast networks was a head scratcher. But Bob Cesa, executive vice president, advertising and cable sales, Twentieth Television, offered that "most people buy network because it's the premium product. If they feel it's cheaper to buy this year, they might spend more money there." On the cable side, he said, some networks may have benefited from subscriber penetration gains, meaning "they're gaining a larger share of eyeballs, and money tends to follow that."
Buyers and sellers say they're prepared to wait. "I work all summer anyway," quipped Cesa. "I think some agencies see things more on the downside than where most of the syndicators see it. That's probably slowing things down."
Hirsch reported the recurring phrase he's hearing from advertisers: "We're waiting to see where the bottom is." But, he said, "as far as we're concerned, we've reached the bottom of where we're going to sell."
Some cable networks said they were close to wrapping up upfront. Lifetime expected to be "nearly finished" by week's end, said Lynn Picard, executive vice president of ad sales. Turner was more than halfway done for WTBS and TNT.
Both Lifetime and A&E denied reports that they were doing some business at prices 20% to 25% below last year's.
Ron Schneier, A&E executive vice president for sales and marketing, said the network has cut prices but the discounts have not and will not reach or exceed 15%. And Schneier warned advertisers not to be greedy, because if advertising were to be off 25%, network-program budgets would drop, resulting in a "lose-lose" situation for sellers and buyers.
Tim Spengler, executive vice president and director of national broadcast, Initiative Media, said the syndication and cable upfront markets have weeks to go before they conclude. "Last year, there was more of a herd mentality to get your business done and get out," he said. "This year, it seems like there's an endless amount of supply. I'm not sure you're any better off going early, middle or late. We don't see them selling out at any point during the upfront."