Report: Broadcast Upfront Spending Down 22%

Written by Ryan Lawler

Tuesday, September 15. 2009 at 11:05 AM EDT Post a comment

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Broadcast networks saw upfront spending decline 22 percent compared to a year ago, while cable networks fared somewhat better, with a 12 percent decline in upfront sales, according to one financial analyst.

In a research report issued this morning, Credit Suisse analyst Spencer Wang estimates that broadcast networks managed to book $7.2 billion in upfront sales, compared to $9.2 billion a year ago. That reduction was driven primarily by a 14 percent to 15 percent decrease in inventory sellout and a 4 percent to 5 percent CPM reduction.

Among broadcast networks, ABC Inc. and CBS Corp. (NYSE: CBS) fared the worst, with both seeing a 24 percent year-over-year decline in upfront sales, according to Credit Suisse estimates. Meanwhile, upfront sales fell 21 percent for NBC Universal , 18 percent for Fox Broadcasting Co. , and 17 persent for The CW Television Network .

On the cable side, Cedit Suisse estimates that upfront spending fell 12 percent to $6.7 billion. That decline came from a 5 percent decline in CPMs year over year, as well as a 10 percent reduction in inventory sellout.

Upfront sales typically account for 50 percent of full-year national TV advertising, As a result of the upfront trends, as well as an analysis of the scatter market for ad sales, Credit Suisse expects an ad decline of about 5.7 percent for broadcast networks and 2.7 percent growth in cable ad sales in 2010.