General Motors has told TV networks that it plans to get out of some advertising commitments during the second quarter of 2006, broadcast executives say.
Automotive News reported last week that GM is cutting its national ad budget this year by more than $200 million, to about $1.3 billion.
GM's strategy is unclear. Executives at some broadcast and cable networks say they are not affected by the cutbacks. Others say the automaker is canceling as much as it can under some contracts.
Most deals for long-term purchases of TV airtime allow an advertiser such as GM to get out of as much as half of its spending commitments in a quarter. To do so, it must give notice 60 to 90 days before the start of the quarter.
A GM spokesperson declined to comment on the company's TV ad spending.
"We evaluate throughout the year what our media requirements are going to be based on our business needs," the spokesperson said. "That's normal. There's some shifting that goes on every year."
Some TV ad sales executives say GM is cutting its ad spending because of its financial troubles. Last month, GM said it lost $8.55 billion in 2005, prompting speculation it might consider a bankruptcy filing. GM has announced plans to eliminate 30,000 jobs and shut 12 plants by 2008.
The ad executives say they are optimistic their companies won't be greatly hurt by GM's cutbacks. Because of the large amount of money GM spends on advertising, they note, the company generally gets volume discounts when it buys TV commercial time. The ad sellers predict they can sell the ad slots GM is dropping for higher prices to other clients.