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Network TV ad sales are worse than expected

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NEW YORK — As the dot-com advertising bonanza fades into distant memory, the just-concluded advertising market for next fall's TV season is sure to set the tone for other media sales through the rest of the year: slower, longer and more stressful.

The major broadcast networks have mainly wrapped up their pre-season sales blitz, known in the industry as the "upfront," and the results are worse than many had been expecting.

Current estimates call for a total take by ABC, NBC, CBS and Fox of just under $7 billion, down about 14 percent from the $8 billion in commitments taken in at the same time last year. Many analysts had been predicting a drop of up to 10 percent. It was the first major decline in a decade, but even so the spending numbers were in line with the levels of about two years ago, before wild spending by Internet companies and the booming economy flooded the advertising market with money.

"Last year it was a mass hysteria," says Jack Myers, chief economist and CEO of Myers Reports Inc., a leading media research firm. "Within days after networks announced their lineups, buyers just rushed right in. This year it was more methodical."

No one doubted the market for network advertising would be weaker this year — the question was by how much. Buyers and sellers of advertising couldn't agree on pricing at first, and for several weeks there was a standoff as networks insisted on keeping prices in line with last year.

NBC finally broke the stalemate by agreeing to buyers' demands for sizable discounts, and other networks followed suit. CBS insists that it held the line on its pricing, demanding higher rates because of its big rating gains with hits like "Survivor."

In the end, NBC agreed to discounts of about 6 percent of the costs to reach every thousand viewers, according to estimates from Merrill Lynch, while ABC, which had suffered a ratings decline from last year, discounted its rates 7 percent. CBS eked out a price gain of about 1 percent.

For many participants, this year's market was tougher to read since the adjustment was so great from the frenzied pace last year.

"I think the vendors had to go through a process of going through the negotiations before they saw how much money was being taken off the table," said Mel Berning, an advertising buyer for MediaVest Worldwide. "You've got more rational spending. They're not spending monopoly money any more."