The Upfront Show Must Go On: Media Companies Fine-Tune Their Pitches While Navigating Through WGA Strike, Murky Economic Climate And Streaming Shift

Even without a once-in-a-generation strike or a Twitter bombshell, next week would already pose a challenge to media companies making their annual upfront pitches to ad buyers next week in New York.

An adverse economic climate and a number of existential questions are confronting those in the ad trenches. With live, linear tune-in continuing to decline, what is the meaning of a prime-time schedule anymore? In a cord-cutting world, how will the profit models of streaming play out? How will advertisers feel the same rush they used to get from putting their chips on the hottest new sitcom or procedural drama and seeing those bets pay off?

“Going into this upfront, there’s a lot of anxiety and excitement — a mix of both,” said Rita Ferro, president of ad sales and partnerships at Disney. “Buyers still love this time of year. They get to see the best of what’s coming from companies, and companies are excited to present that.”

Mark Marshall, elevated Friday to interim chairman of ad sales and partnerships at NBCUniversal after Linda Yaccarino’s stunning exit and expected move to become CEO of Twitter, expressed optimism despite it all during an interview with Deadline this week.

“We feel dramatically better about things than we were a few months ago,” he said prior to the news about Yaccarino on Thursday added another stunning layer of drama to next week’s ritual. “Supply chain issues have improved, inflation is slowing down. The job market continues to churn, which means consumers still have money to spend.”

During the nearly completed wave of first-quarter earnings reports, media and tech companies reported significant ad softness, but held out hope for a rebound in the second half of 2023.

“Remember, the upfront is a futures market,” Marshall said. In the fourth quarter alone, by his count, there will be 16 wide releases from movie studios, 17 new car launches and 10 new drugs put into the market by pharmaceutical companies. All of that requires paid presence on TV and streaming.

With billions of dollars hanging in the balance (a key chunk of the $60 billion-plus annual TV ad haul), and YouTube and Netflix now horning in on the traditional broadcast week, media ad execs have reason to sweat. A Deadline surveyed those about to take the stage found the mood to be resolute-verging-on-hopeful, with heavy “the show must go on” energy. It’s more than understandable, given the fact that Covid for the past three years (remember last year’s Omicron spike?) has upended the rhythms of the upfronts established over decades. So, to have a show at all (after all, plenty of talent had to Zoom in last year even without a strike) is seen as a plus.

The WGA impasse, now in its second week, will nevertheless alter the upfront presentations. Late-night hosts will no longer take the mic, with their shows dark and no guild writers available to supply jokes. Other talent is also bowing out so as not to risk crossing picket lines expected across Manhattan. Fox is expecting to only have unscripted personalities and those from the sports realm, while Bravo will factor heavily into NBCU’s plans, for example.

“We have tremendous respect for the creative community and for unions,” Ferro said. “This has been rough for everyone.” As far as Disney’s event at the newly refurbished North Javits Center, she added, “Yes, it will have talent,” even though some notables like Jimmy Kimmel, Deadline has been told, have bowed out. “The show will be beautiful and will have surprise-and-delight moments.”

“We’re still putting together the splashiness of it,” Warner Bros Discovery Chief U.S. Ad Officer Jon Steinlauf said in an interview. “We’re going ahead. We’re doing a show Wednesday morning at MSG and we expect to have a big crowd for it, but it’s a different year. … We’re trying to make sure the celebrity presence is what we’d like it to be. … It’s a changing situation. We’re working on it. It won’t be like last year.” In respects, he added, the presentation should be more sound than last year’s given that the $43 billion merger of WarnerMedia and Discovery closed barely a month before the 2022 upfront.

Two companies have opted out of live events entirely. Paramount several months ago shifted away from its longtime Carnegie Hall blowout to a series of smaller-scale dinners around the country. Netflix just a few days ago cited the strike in pulling the plug on its live show at the Paris Theatre in favor of a virtual event. The CW, under new owner Nexstar Media, is opting for a lower-wattage press breakfast and client luncheon as opposed to the network’s traditional week-capping extravaganza at the New York City Center Theater.

“I really think it has worked out a lot better this way,” Paramount Advertising President John Halley said. “We have much more detailed and productive conversations and people feel like they can really engage, instead of rushing from event to event.”

Marshall acknowledged that NBCU’s longtime roost at Radio City could well be a target for picketers but said ad clients don’t seem deterred. “We haven’t gotten a lot of questions, other than how [the strike] is going to affect programming or the schedule,” he said. “We’ve got an iconic venue. People are going to be there to see the new shows. We’ll still have a lot of talent there.”

Apart from the disruption of the strike, continued softness in the overall ad market is a reality facing everyone on the sell side. “We see the stress in general in the market,” Fox’s Marianne Gambelli said. Rather than put streaming subsidiary Tubi into the NewFronts, Fox wanted to make it a pillar of the main upfront. Tubi is the focus of the company,” Gambelli said. “We don’t just throw it in.”

Similarly, other streaming outlets like NBCU’s Peacock, will take up space in the main upfront. Steinlauf said Max — as HBO Max will be called starting May 23 — will be a centerpiece of his pitch. “It is the highest priority” of anything in his portfolio, he said. While HBO Max under prior owners AT&T took a cautious approach to advertising around HBO originals, the streaming service in February began selling ads in front of that slate. Max will have pre-roll ads before signature Sunday night series like The Idol, an upcoming show from Euphoria creator Sam Levinson. Mercedes is among the advertisers taking spots in that pre-roll, Steinlauf said.

Ferro also echoed comments from Disney CEO Bob Iger this week about the company’s plan to lean into ad-supported streaming. Disney, which rolled out an ad-supported tier of Disney+ last December, plans to combine content from Hulu and Disney+ into a single app by the end of the year. About 40% of the company’s ad inventory is addressable, Ferro noted, meaning buyers can target much more extensively than they do in traditional linear, and as a result 1,000 new advertisers came aboard in the most recent quarter.

One company is unaffected by the WGA situation because of its unique DNA is TelevisaUnivision. Donna Speciale, the former longtime Turner ad sales chief who took a similar post at Univision prior to its merger with Televisa in 2022, noted that the company’s production base in Mexico and emphasis on sports and news programming shield it from picket-line angst. The company’s upfront at Basketball City, the spot along the East River near South Street Seaport where Disney held its 2022 presentation, will highlight resilience in the Hispanic ad market. Privately held TelevisaUnivision has reported single-digit upticks in ad sales in recent quarters as many other companies, including Big Tech, have registered declines. “Historically, Hispanic investment would be the first to be cut in a volatile market,” she said, “and now the opposite is happening.”

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