Like gardeners trying to eliminate weeds, Home & Garden
Television is aiming to do away with its double-selling controversy.
Although HGTV is making $2.5 million available for
advertiser make-goods, some ad-agency buyers are more concerned about the situation that
inspired that move.
In its third-quarter-1999 earnings announcement, E.W.
Scripps Co. said it had set aside $2.5 million for possible HGTV advertiser make-goods
"related to possible underdelivery of audience levels since 1997."
Elaborating last week, a Scripps spokesman in Cincinnati
said the potential shortfall was related to gross impressions, not ratings. "The
possible underdelivery of audience would occur if local cable systems covered a national
spot that then resulted in underdelivery of gross impressions promised to an
advertiser," he explained.
Company sources added that the make-good sum amounted to
less than 1 percent of HGTV revenue.
The questionable double-selling practice first came to
light in late September, in an affidavit filed in New York State Supreme Court by Reese
Schonfeld, the founding president of Food Network who now is president of Pacesetter
Communications, a Food co-owner along with Scripps.
In his affidavit, Schonfeld alleged, "The fraudulent
conduct of the HGTV traffic department consists of scheduling advertising spots paid for
by national advertisers in slots that have already been sold to local cable-system
operators."
He contended, "HGTV knows that these slots will be
pre-empted, or 'covered,'" by operators' local avails, and he wanted
to keep that practice from spreading to Food.
Some ad agencies said they were upset.
At TN Media Inc., senior vice president and executive
director of local broadcast Howard Nass said last week, "I'm hoping it was due
to an overzealous salesman who neglected to tell advertisers it was local [time], rather
than national, and [that] it was an oversight on [HGTV's] part" to delay
disclosure.
Perhaps 15 years ago, he recalled, MTV: Music Television
sold local avails to national clients. But that network was upfront about it, and it sold
those units at a discount, he added.
"I don't think any [network] in their right mind
would [double-sell] in this day and age because they're going to be found out,"
Nass said, adding, "I just hope I'm right."
Nass -- who said his clients have not yet received HGTV
make-goods -- said he was not aware of other cable networks engaging in double-selling.
Until now, the problem only appeared to be an international
one. A January 1998 article in Multichannel News International reported that
monitoring of cable-network commercials in several Latin American countries indicated that
in Chile and Argentina, between 1 percent and 9 percent of spots on average were covered
by local commercials.
