ABC Spells Ad Fight for Disney

ABC has clawed its way back into the ratings game, but the Disney (DIS Quote) unit continues to ski uphill in the advertising race.

At television's upfront ad show this week, much noise is being made of a primetime ratings decline at General Electric's (GE Quote) NBC. The perennial No. 1 network was caught flat-footed this season without replacements for hit shows like Friends and Frasier.

Yet NBC, which has long commanded premium ad dollars based on its appeal with more affluent viewers, continues to hold the upper hand over ABC, as well as Viacom's (VIA.B Quote) CBS and News Corp.'s (NWS Quote) Fox. Its edge lies in the ratings bonanza called the Winter Olympics, which NBC is due to broadcast at the start of 2006.

The network's strong position in the $9.5 billion upfront market shines a spotlight on the challenge that rivals like ABC face in trying to unseat the longtime leader. The upfront competition comes at a particularly delicate time for Disney, where Bob Iger is preparing to take over for longtime Chieftain Michael Eisner and investors are keeping a close eye on the TV operation's progress. ABC's revival helped to fuel Disney's bounce last year, but whether the network can keep it up in the face of tough competition remains an open question.

Indeed, despite efforts at self-effacement and recent blips on its radar screen, NBC still calls the shots in this marketplace.

"We'll use the Olympics to help launch and promote product," says NBC Universal Television Group President Jeff Zucker. "We haven't identified that programming yet, but the promotional power of the Olympics is obvious -- it's a boon to the entire network."

At the network's upfront presentation Monday, entertainment president Kevin Reilly was introduced with a video that chronicled last season's programming failures. It showed him reeling to the Doors tune This Is the End and reprising the Brando role from Apocalypse Now.

Much more telling, however, was how NBC ended the evening. Oscar winner Jamie Foxx rose from the orchestra pit to sing America the Beautiful while images of Olympic glory played on a giant screen behind him.

"You have to remember that they have less need this year," said one buyer with respect to NBC's inventory, thanks to the Olympics.

Ray Warren, director of national broadcast for Omnicom's chief buyer OMD, which boasts several large advertising clients, says NBC "is waiting for others to drop off a little bit. The Olympics are not going to hurt."