CELLA: UPFRONT NOT ZERO SUM GAME

 

The merger of UPN and The WB will tighten network TV advertising inventory and embolden all the broadcast networks to raise rates, said Magna Global Chairman and CEO Bill Cella at NATPE. But they should not count on making the higher rates stick, he said.

                                                                                                                

Together, The WB and UPN garnered about $900 million in last year’s upfront advertising market. “Not all of that is going to the [remaining] networks,” he told reporters. (Some reports last spring put the combined WB/UPN take at slightly more than $1 billion.)

 

Despite his prediction, Cella grumbled at the NATPE panel that the loss of the network is not good for his business. “The industry needs less of a consolidated situation.”

 

CBS and Time Warner, the owners of UPN and The WB, respectively, announced Tuesday that they would shut down the two financially struggling networks and merge them into The CW, which they would own equally. The new network, which will debut this fall, will mix the best programming of its two progenitors.

 

The other media buyers on the NATPE panel also reacted to the merger.

 

Irwin Gotlieb, global chief executive officer, Group M, said life would be tough for the stations that lose their WB or UPN affiliation and don’t win The CW affiliation. The merger “has created a new category of stations—the U and U, unaffiliated and unconsolidated,” he said. “They are on their own. They have to create branding, market position, audience flow—all of that stuff.

 

“We may have a shift in the dynamics of syndication that results inadvertently from [the merger],” he continued. “But that, frankly, would be a good thing.”

 

Mike Rosen, chief investment officer, GM Planworks-Video Investment Group, said a single network makes sense, and more sense than it might have a couple of years ago because the target audiences of the networks were beginning to overlap. They both seem to be aiming for the same “sweet spot,” he said, adding that he is curious to see what kind of demo The CW pursues.

 

“I’m very happy that the true independent is back,” said Peggy Green, president, broadcast & entertainment, Zenith Media Services. “Where are they going to acquire programming from? I think we are in for a good time and a fun time. It’s definitely going to change the whole industry.”