Upfront Update: Will Cable Deals Happen First?

(MoneyWatch)  And so another week with almost no movement in the upfront market comes to a close. It's now been three weeks since the last of the upfront presentations, and, after what is becoming my usual scan of the news on Friday afternoons to see if anything has happened to get advertisers signing big deals with the networks, I will report the following: it hasn't.

The most interesting story of the week about the upfront came from Brian Steinberg over at Advertising Age; it put forth the possibility that cable will do deals before broadcast will, because cable might be more willing to give into the price concessions that buyers clearly want. While not unprecedented, this would be unusual -- the last time, per the Ad Age story, that this happened was 2004. But a lot has changed since 2004. Cable now commands a higher share of audience (though usually lower on a program-by-program basis) than network TV does; giving in to advertiser demands sets back cable's aspirations to be treated more like broadcast.

I think another reason the upfront market is moribund right now has to do with something that couldn't have been specifically foreseen even a few months ago: the bankruptcies of General Motors and Chrysler, officially putting into question the budgets of two of broadcast advertising's biggest spenders. Chrysler has opted out of the upfront entirely (it spent almost $150 million on national broadcast last year). GM spends even more, and even though its budget across all media was down by 19 percent in the first quarter, it still spent almost $425 million during that period. Whatever GM does spend in the upfront, it won't be what it might have. With those two advertisers wounded, and, for all we know, other carmakers feeling not quite as pressured to spend in the way they have in the past, that should put additional downward pressure on prices for ad time. Though the networks probably in some ways have planned for this, what was once speculative about these two companies is now harsh reality, and the stars are probably coalescing a bit around this new lay of the land. No, this upfront market isn't going to move any time soon.

Previous coverage of the upfront at BNET Media:

• The Upfront Ad Market Will Start Whenever
• NBC Upfront Strategy: Hold Back Inventory For Scatter
• The Network TV Upfront: CBS Is Where the Sun Always Shines