June 12 (Bloomberg) -- News Corp.’s Fox broadcast network is almost finished negotiating advance advertising commitments that fell to about $1.75 billion for the coming television season, said a person with knowledge of the situation.
That represents a decline of about 10 percent from the $1.95 billion in so-called upfront commitments a year ago, said the person, who asked for anonymity because negotiations are private. Average ad rates rose 5 percent to 7 percent, and Fox sold commitments for about 80 percent of its ad inventory in the coming season, the person said.
The value of Fox’s total total ad commitments has dropped even though rates are higher because its audience declined 21 percent in the season that ended in May. Among viewers aged 18 to 49, a group targeted by advertisers, its audience dropped 22 percent, according to Nielsen data. Fox told advertisers in May it plans to shake up its prime-time schedule by adding five comedies and four dramas. The network will also bring back the hit espionage drama “24” for a limited run.
“American Idol,” Fox’s most-popular program, had been TV’s most popular show until last year. This season, it averaged 13.2 million viewers, down 23 percent from a year earlier. Executive producer Nigel Lythgoe announced this week he was leaving the program. Reality TV chief Mike Darnell also said he plans to exit the network at the end of the month.
News Corp., controlled by Chairman and Chief Executive Officer Rupert Murdoch, fell 2.3 percent to $30.94 at the close in New York. The stock has gained 21 percent so far this year.
The broadcast television networks are finishing talks with their biggest advertisers to establish prime-time rates for the next TV season. CW Network has completed discussions, CBS Corp. is wrapping up, while Walt Disney Co.’s ABC and Comcast Corp.’s NBC continue to negotiate. Ad spending at the broadcast networks will fall 2 percent to $16.9 billion, according to ZenithOptimedia, Publicis Groupe SA’s research division.
CBS’s broadcast network has almost completed negotiations for prime-time advertising commitments totaling about $2.7 billion, a person with knowledge of the situation said last week. Rates are 7.5 percent to 8.5 percent higher than a year ago and CBS is targeting advance commitments for 70 percent to 80 percent of its ad inventory, the person said.
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