WarnerMedia Wraps Upfront Sales, Securing Record Revenue

WarnerMedia became one of the last big media companies to finish this year’s upfront negotiations, in what is likely the last time it will conduct upfront business prior to its upcoming merger with Discovery. The company said it had concluded the most successful upfront in WarnerMedia history, with record revenue, but offered no specifics about CPM (cost per thousand viewers reached) or volume increases. “WarnerMedia is home to a tremendous collection of premium content and IP that we are incredibly proud to represent each day,” JP Colaco, head of advertising sales, WarnerMedia, said in a statement. “We are deeply appreciative of how favorably the marketplace responded to that message, with significant demand for all of our properties, from our stellar linear networks to our growth engines like digital and the best-in-class streaming service, HBO Max. Today is just the start of how we are working together with customers to unlock greater possibilities and maximize results, while uniting their valuable messages with solutions that connect to the right consumers at the right time, on all screens.” This was the first WarnerMedia upfront led by Colaco, who joined the company last October. The company unveiled pricing details for its HBO Max ad-supported tier—now called HBO Max With Ads—during last month’s upfront presentation. But that event was overshadowed by the previous day’s shocking news that Discovery and WarnerMedia would be merging, with Discovery CEO David Zaslav leading the combined company, which will be called Warner Bros. Discovery. Coloaco told Adweek last month that any upfront deals will “100% … be honored” if the merger closes before the end of the 2021-22 upfront calendar. The companies conducted their business separately in this year’s upfront, but are expected to enter next year’s talks as a combined unit if the merger is approved by mid-year. Speaking at the Credit Suisse investor conference earlier this month, AT&T CFO Pascal Desroches said that “CPMs are up high single digits” compared to last year’s upfront. “Advertisers have really high demand, not just for the traditional linear inventory but digital as well, including AVOD inventory.” While negotiations were still ongoing at the time, “we are progressing very well, and the market is extremely helpful right now,” said Desroches. WarnerMedia was one of the last big media companies to complete its upfront negotiations. Earlier this month, The CW, NBCUniversal, Disney and Univision had each wrapped talks, with ViacomCBS most recently crossing the upfront finish line on Tuesday. That leaves Discovery—which is set to merge next year with WarnerMedia—as the last remaining upfronts week presenter still engaged in talks. “Our goal each upfront isn’t about finishing first, it’s about putting our customers first,” Katrina Cukaj, lead of ad sales and client partnerships, WarnerMedia, said in a statement. “We remain hyper-focused on taking the right amount of time to listen and understand each of our customer’s distinct goals, to develop meaningful partnerships that resonate and deliver their desired outcomes.” The ‘lion’s share’ of HBO Max With Ads inventory HBO Max With Ads—which debuted on June 2, featuring more than 35 brands—was a big priority for WarnerMedia during its upfront. Early demand for HBO Max With Ads, which was first sold in last year’s upfront, “exceeded all expectations,” Colaco told Adweek last month, adding that demand in this year’s upfront was “very high as well.” The company sold “the lion’s share of the inventory in the upfront.” However, linear inventory also continues to be “an extremely important part of the advertising mix” in the upfront, said Colaco. “All of the [digital] video, whether connected TV or mobile, can’t match the reach that we have of linear.” Colaco had anticipated that the marketplace would proceed as quickly as it did, telling Adweek that a strong scatter market had resulted in “a tremendous amount of demand” heading into the upfront. As a result, “a lot of our partners want to move very quickly, so it’s moving faster than anticipated,” said Colaco. “I think people who wait right now in this frothy market, they may be left behind.” The company also saw demand for its sports offerings, including its new NHL package. Colaco said in May his top upfront priority was to “increase our volume at better than market pricing, which seems pretty natural. But, but we also want to really have deep partnerships with the advertisers. That’s really important to us. It’s more than just spots and dots. It’s a collaborative relationship where both sides are extracting a fair amount of value.” WarnerMedia’s JP Colaco on Selling HBO Max With Ads and His First Upfront at the Company