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Seeking Big Upfront Hikes, CBS Sticking to Its Guns

CBS, expected to take in the most revenue among the broadcasters in the upfront market this year, is not budging from its asking price of 18% hikes and buyers are balking, market sources said.

“There’s a difference of opinion on where this market should be,” said one buyer. “It isn’t a double-digit market.”

Last week, Fox did deals with most of the major agencies at increases that averaged about 11%. Those rates include spots on The X Factor, Simon Cowell’s new competition show, which is expected to draw ratings in the same ballpark as American Idol in the fall.

 Because Fox has the highest ratings among young adults 18 to 49, and less inventory than the other networks, buyers think that Fox should be at the top end of the market, particularly when X Factor is taken into account. Fox also doesn’t have shows in other dayparts, like news or late night, to complicate and slow down negotiations

But CBS, which bills itself as America’s Most Watched Network, believes its stable schedule and low level of ratings erosion is worth paying for. CBS CEO Les Moonves is also on record as saying CBS expects double-digit price increase in the upfront market.

How can CBS justify seeking a double digit increase that’s closer to 20% while Fox has settled for closer to 10%? One argument comes from pricing in the scatter market, where ads this season cost 30% or more than they did during the 2010 upfront, when prices rose about 9%. That would make 18%–or a compromise closer to 13% t o 14%–seem like a bargain.

But buyers say that predictions that a huge amount of money would flow from scatter to this upfront market have proved unfounded and that the actual increases are more modest.

Sales execs in cable and syndication are waiting to see how long this game of chicken will last. Agencies are registering budgets for their clients with cable and syndication, but are mostly trying to negotiate only with the broadcasters.

“We’re working through it,” said one buyer. But as of yesterday, “nobody’s getting anywhere.”