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Exclusive: Fox Playing Hardball With GM

UPDATED at 4:35 p.m. ET

Fox is pushing back at General Motors and its media agency Carat saying if the automaker persists in refusing to do primetime deals with the network unless cost-per-thousand (CPM) ad rates are decreased by hefty-double digits, then the network will not sell GM any NFL ad time, sources familiar with the negotiations said.

Fox had also refused to close deals for other Carat clients until some type of resolution was reached with the agency and GM on pricing for its package, but did eventually finalized those deals late Tuesday night, leaving GM as the only client not done.

"This is a very delicate situation for both Fox and Carat," one person familiar with the negotiations said. Fox had no comment and Carat did not respond to a request for comment at presstime.

CBS and NBC also televise NFL games. Sources with knowledge of those two networks' upfront negotiations offered no indication that CBS and NBC were taking similar stances with GM and Carat. CBS is expected to complete its upfront selling by the end of this week. NBC has been lagging behind in finalizing deals with most agencies. (CBS had no comment for this story, while NBC did not return a message requesting comment.)

As one of the largest TV ad spenders in the country at more than $1 billion per year, GM has lots of clout both among the TV networks and at its new media agency. Carat was awarded the GM media planning and buying account earlier this year, wrestling it away in a review from incumbent media agency Starcom. According to sources, one of the things that helped Carat win the account was an acknowledgement that it would fight on GMs behalf to reduce broadcast ad rate hikes. (For more on GM's position, click here)

But GM's stand seemingly made matters awkward for the agency, and for a while affected all Carat clients and put the agency in an untenable situation. But Fox eventually agreed to finalize its deals with the other Carat clients.

Beyond the circumstances with Carat, Fox is expected to complete its upfront deals this week, with primetime ad packages averaging 8% CPM increases. CBS primetime packages have averaged 9% CPM increases.

Also expected to complete its upfront selling this week is the younger-skewing CW network, which has averaged CPM increases of 6%-7%. ABC is averaging about 7% increases for its primetime packages, with people familiar with its negotiations saying they might extend a bit into next week.

Unlike Fox and the CW, which only have 15 hours of primetime inventory to sell, ABC, CBS and NBC have 22 hours, plus other dayparts to sell, so it sometimes takes the latter three longer to complete negotiations.

The aggressiveness of media agencies to do deals quickly with The CW brings some positive indications to a network that has lately been bleeding audience, at least with live TV viewing. While most CW series' average viewership is only about 1.5 million live plus same day, a big part of that audience consists of hard to reach millennials. The CW also streams all of its series on its Website beginning only 8 hours after a broadcast is telecast, and the network sells separate ad packages for its streamed shows, and those ads cannot be fast-forwarded. So advertisers buying the network in the upfront are doing so both for TV and online packages.

That The CW is reworking its fall schedule so that almost every show will now have a new time period didn't seem to matter to media buyers who believe that the network's younger viewers are more savvy than those on the other broadcast networks with older median age audiences.

Cable upfront selling, meanwhile, is starting to heat up. Viacom is the lone cable company that has ostensibly wrapped up its upfront selling for networks such as MTV, VH1 and Comedy Central. But talks are taking place at some of the larger cable networks such NBCU's USA and Turner's TNT and TBS.

Sources familiar with the Viacom negotiations said the company averaged about 2% CPM increases across the board for packages, but that percentage was fueled by a desire to sell more volume rather than hold out for higher pricing. Some media agency executives said that solid ratings increases at VH1 were offset by disappointing primetime ratings for some MTV series like The Pauly D Project and Jersey Shore, the latter of which took a bit of a ratings hit this past season after a more solid posting last year when the series took place in Italy.