Lisa Richwine and Dawn Chmielewski
LOS ANGELES (Reuters) - The risk of a tariff-induced U.S. recession is pending in the TV industry’s early annual sales season, when companies promote celebrity fundraising on auxiliary brands to devote billions of dollars in advertising over the coming year.
Starting Monday, New York's speech began weeks of negotiations in which television networks and streaming services usually locked in the largest share of advertising revenue that year.
YouTube promises Lady Gaga's performances and one of its biggest stars Beast. NBCuniversal will present speeches at Radio City Music Hall and Warner Bros. Discovery in Madison Square Garden.
But the champagne-driven party, caused by an inappropriate tariff policy by U.S. President Donald Trump, will be held in the context of economic problems, which economists warn that could lead to a recession.
While major media companies have not reported any decline in AD demand, industry analysts predict that brands will reduce spending as reduced consumer confidence.
The research firm’s eMarketer project could spend $13.4 billion on traditional TV in the upfront period, down $4 billion from last year, depending on the level of tariffs that take effect. The Trump administration is in talks with many major trading partners, including China.
Emarketer said the worst case scenario for digital advertising on online devices is that spending will remain flat at about $13 billion. If the tariffs are limited, digital advertising could increase to $14.7 billion.
Data company guidelines say the callback is already obvious. AD spending in the first quarter increased by 7% compared to the same period in 2024, but future bookings suggest that growth could drop to 3% in the second quarter, the guide said.
Media executives acknowledged that some brands might feel nervous but said cuts to advertising spending could cost.
“In a shared process, when many advertisers quickly backed back and then had to redeploy those funds, customers learned some important lessons,” said Jeff Collins, president of advertising sales, marketing and brand partnerships at Fox. “And I think they’re trying not to react knee-jerk to what’s happening right now.”
In the so-called “scattered” market, advertisers waiting for the last-minute purchase time sometimes increase double-digit interest rates, Collins said.
Fox has not seen any impact on advertising demand for tariffs, he added.
Karen Kovacs, president of advertising sales and partnerships at NBCuniversal, said brands that continue to spend their advertising during the past downturn have maintained better sales and market share than other reduced brands.
NBCU parents Comcast said in its latest earnings report that advertising revenue was roughly flat in the first three months of 2025.
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Ross Benes, senior analyst at eMarketer, said ad time sellers may need to make concessions on pricing and cancellation terms, adding that tariffs will have the biggest impact on advertising in physical products such as automobiles and consumer goods.
Digital players such as Google’s YouTube or Facebook’s parent Meta may emphasize the use of artificial intelligence to help brands attract customers more effectively, Greg Kahn, CEO of GK Digital Ventures Media Consulting.
Many U.S. companies cut or withdraw annual forecasts, citing uncertain trade environments, including General Motors, Kraft Heinz and Bleach Maker Clorox.
CEO Linda Rendle said on a revenue call last week that Clorox is evaluating how much it spends on advertising.
"We will continue to invest heavily in the brand, but at what level we will invest most meaningfully, given the returns we get."
Despite this, some media companies remain optimistic.
Disney expects annual advertising growth to surpass its top 3% forecast, while Netflix co-CEO Greg Peters said in April that the company saw no signs of softness in its previous deflection discussions.
The company did not disclose advertising revenue, but analysts surveyed by LSEG project Netflix will receive $2.7 billion from advertising in 2025. Netflix launched its ad-supported options in November 2022 and is still in its early stages of building the business.
"This smallness may have provided us with some market changes in insulation," Peters said, adding that Netflix expects to increase advertising revenue this year.
(Reported by Lisa Richwine and Dawn Chmielewski; Editors by Kenneth Li and Nia Williams)