Magazine article ADWEEK

Upfront Hits High Noon: Mega Media Agency GroupM at Impass with Major Cable Networks on Price as Market Nears Finish

Magazine article ADWEEK

Upfront Hits High Noon: Mega Media Agency GroupM at Impass with Major Cable Networks on Price as Market Nears Finish

Article excerpt

While the 2011-12 upfront will be remembered for the sheer volume of dollars secured by the networks, one media agency titan won't be looking back fondly on the spring selling season. According to multiple industry sources, GroupM badly misread the cable market, calculating their planning costs two to three points south of the rates negotiated by rival agencies.

As a result, GroupM only has a few deals completed with the major cable network units, and those with outstanding business with the agency are refusing to budge on price.

To complicate matters, GroupM has insisted that cable networks invest in its year-old media bartering initiative, the Midas Exchange. The practice of swapping excess inventory or other underperforming corporate assets for media credits is nothing new--Omnicom Group's Icon International has been trading on unwanted and idle property for 25 years.

GroupM vehemently denies that it has strong-armed sellers to back the exchange, noting that the service is merely a single arrow in its quiver. The agency also dismissed network beefs, charging that the sellers were guilty of trying to negotiate rates in the press.

As of June 24, GroupM remained at odds with Turner Broadcasting, A&E Networks, and FX Networks. Because it handles Paramount Pictures' $450 million media budget, GroupM had an incentive to hash out an early deal with its Viacom sibling, MTV Networks.

While cable waits for GroupM to come to terms, the final take for the upfront should add up to around $18. …

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