Advertising: Advance Ad Sales for New TV Season Called Lukewarm

After months of buildup and weeks of negotiations, the five English-language broadcasters finished their sales last week in what is known as the upfront market, so named because it takes place before each season begins. The results were not as bad as some had expected, but not as robust as others had hoped.

That reflects how trends in television advertising have been, for a while now, “O.K. but not great,” Doug Creutz, a media analyst for Cowen & Company, said in a report late last month.

Pricing in the upfront market, he added, “was generally in line with expectations — perhaps just a touch light,” with increases in a closely watched metric known as cpm, for the cost to reach each 1,000 viewers, in the mid to high-mid single-digit range.

“A touch light” is not a phrase normally associated with upfront seasons, but the broadcasters “suffered their worst annual decline in viewership” during the 2012-13 season since the 2007-8 season, which was affected by the writers’ strike, Mr. Creutz said. There was no true breakout hit among new series, along with a worrisome slump in ratings for the sophomore seasons of popular new shows from the 2011-12 season.

Although it is notoriously difficult to come up with exact figures for the results of each upfront market, estimates are that the five broadcast networks received commitments from marketers to buy about $9 billion worth of commercial time during the 2013-14 season, which begins next month and continues through May. That is roughly on par with or a shade lower than what they took in last summer, in the 2012-13 upfront market. The results are not that bad considering the outcome of the 2012-13 season or the myriad problems of legacy media, as shown by the sales, in rapid succession, of Newsweek, The Boston Globe and The Washington Post.

Television “is not going away for now,” Brian Wieser, senior research analyst at the Pivotal Research Group, said in a phone interview, because it is “still the least bad way to get your reach and frequency,” referring to two important goals of marketers when communicating with consumers.

As valuable as digital media may be, “you can’t do without” television “if you’re a large brand,” he added, because “you can’t accomplish your media goals” without it.

There was a major difference between this year’s upfront negotiations and last year’s: the dickering ended about six weeks later this time around, primarily because of delays in marketers coming to terms with two of the five networks, ABC and NBC. Those talks concluded last week, whereas CBS and CW wrapped up in early June and Fox Broadcasting the previous week.

The later conclusion of the 2013-14 upfront market might have benefited the broadcasters, Mr. Wieser said, because some marketers may have decided to “bring forward” money they planned to spend during the season in what is called the scatter market. With the start of the season now only a month away, he noted, the line between the upfront and scatter markets could have blurred. (Making commitments during an upfront market is a bet that prices will be higher during the season; deciding to hold back money for the scatter market is a bet that prices will be lower during the season.)

CBS, the biggest broadcast network, led in the total dollar amount of commitments, at $2.5 billion to $2.6 billion; by some estimates, CBS’s take may have been as much as $2.75 billion. The cpm rates that CBS is charging advertisers for the 2013-14 season are estimated to be increasing by an average of 7.5 percent.

According to Leslie Moonves, chief executive of the CBS Corporation, CBS fared the best in the upfront marketplace.

“Once again, we took share from our competitors and we were the leader in both volume and pricing,” he told analysts last week.

In something of a backhanded compliment, Mr. Moonves said of the other broadcasters, “I even noticed our competitors got substantial price increases as well, which actually surprised me, how well they did.”

The rest of the estimates for dollar volume are: ABC, part of the Walt Disney Company, $2.1 billion to $2.2 billion; NBC, part of the NBCUniversal division of Comcast, $1.9 billion to $2 billion; Fox Broadcasting, part of 21st Century Fox, around $1.8 billion; and CW, a joint venture of the CBS Corporation and Time Warner, $400 million to $420 million.

For the second consecutive year, cable channels have fared or are faring better in the upfront market than their broadcast competitors. Estimates are that the combined take for the scores of cable channels that sell commercial time will total as much as $9.8 billion. Many channels are enjoying more robust demand than the broadcasters; for instance, AMC, part of AMC Networks, has said its ad sales are nearly 20 percent higher than in the upfront market last year.

Wealth Matters: Advisers Caution Against Hasty Decisions in Advance of Tax Changes

But financial advisers say that in their rush to do something this year, investors may end up with regrets.

“Any time you make a decision purely for tax reasons, it has a way of coming back and biting you,” said Mag Black-Scott, chief executive of Beverly Hills Wealth Management. “Could you be at a 43 percent tax on dividends instead of 15 percent? The straight answer is yes, of course you could. But what if that doesn’t happen? What if they increase just slightly?”

Various proposals are on the table, but the taxes the wealthy say they worry most about are an increase in the capital gains rate to 20 percent from 15 percent, which would affect investments like stocks and second homes; an increase in the 15 percent tax on dividends; and a limitation on deductions, which would effectively increase the tax bill. For the truly wealthy, there is also the question of what will happen to estate and gift taxes.

In addition, the health care law sets a 3.8 percent Medicare tax on investment income for individuals with more than $200,000 in annual income (and couples with more than $250,000). Taking taxes on capital gains as an example, Ms. Black-Scott, who started her career at Morgan Stanley in the late 1970s, said people needed to remember that the rates were 28 percent when Ronald Reagan was president. “If they go from 15 to 20 percent, is it really that bad?” she asked. “You need to say, ‘Do I like the stock?’ If you do, why would you get rid of it?”

Here is a look at some of the top areas where short-term decisions based solely on taxes could end up hindering long-term investment goals.

APPRECIATED STOCK Many people have large holdings in a single stock, often the result of working for a company for many years. And the stock may have appreciated significantly over that time. But if they are selling now solely for tax reasons, advisers say they shouldn’t. The stock may continue to do well and more than compensate for increased capital gains.

But there is an upside to an increase in the capital gains rate: wealthier clients may finally be pushed to diversify their holdings. “If you have 75 percent of your wealth in one stock, then it’s a really appropriate time to think about this,” said Timothy R. Lee, managing director of Monument Wealth Management. If the increased tax rate “is a motivating factor for some people, O.K. Letting go of that control and the pride that goes with it is a really difficult decision.”

Selling stock now may also make sense when it is in the form of stock options set to expire early next year. “Do you want to take the risk the price will drop in January?” asked Melissa Labant, director of the tax team at the American Institute of Certified Public Accountants. “What if we have a fiscal cliff or a change in the markets? If you’re comfortable, do it now.”

Some investors may also fear that higher taxes will drive all stocks down. Patrick S. Boyle, investment strategist at Bessemer Trust, said there was no historical link between tax increases and stock market performance.

In the most recent three tax increases, he says, “the market has actually gone up in the six months before and after.” He added: “It’s not that tax rates aren’t important. They are. It’s just that there are so many other things going on that are more important than tax policy.”

MUNICIPAL BONDS Bonds sold to finance state and local government projects are tax-free now and will be tax-free next year. That is no reason to load up on them.

Tax-free municipal bonds have always been attractive to people in higher-income tax brackets. Now, advisers fear that individuals just above the $200,000 threshold, people who say they do not feel wealthy but will probably be paying higher taxes on their income and investments, will try to offset that increase by moving more of their investments into municipal bonds.

Beth Gamel, a certified public accountant and executive vice president at Pillar Financial Advisers, imagined a case where people in higher tax brackets, thinking they were acting rationally, sold stocks this year to take advantage of the lower capital gains rates and then, to avoid higher taxes next year, put all or some of that money into municipal bonds. Maybe they outsmart the tax man, but they do so at risk to their retirement.

“It will be very difficult for them to reach their long-term goals,” she said, “because the yield on muni bonds is lower than stocks over time.”

Or as Will Braman, chief investment officer of Ballentine Partners, said of this trade-off: “It’s not about minimizing the taxes but maximizing the after-tax returns.”

He suggested that people use their deductions to reduce what is owed from taxable securities.