For now, things couldn't look more rotten for the broadcast networks, with ratings tumbling and primetime lineups upended because of the just-ended writers' strike, and all of that amid more and more talk by economists of the nation slipping into a recession.

Yet the broadcast networks still look to be in pretty good shape for this summer’s upfront ad market, with spending by advertisers likely up from last year's $9.3 billion, or at worst flat.

As sour as things may seem, the upfront market operates on its own rules, and they are rules that tend to benefit the networks: supply and demand.

Last year, advertiser demand was up and supply--expressed in available rating points--was down, and that led advertisers to spend about 5 percent over what they'd spent in the 2006 upfront.

This year looks a lot like last year.

The supply of rating points is down again. Four of the five networks are posting declines this season in the 18-49 demographic. The only exception is Fox, which had the Super Bowl. Lower ratings translate to lower rating points.

Too, advertiser demand has been brisk, never mind all the talk of recession.

The key indicator of that demand is the scatter market, where inventory not sold in the prior upfront market is auctioned off. Scatter prices have been trending some 20 percent or more over upfront prices. High scatter prices tend to push advertisers to spend more in the upfront market for fear of facing higher prices if they hold off and buy later in the year.

“A recession doesn’t necessarily mean people will stop advertising,” says Larry Novenstern, executive vice president and joint managing director of newcast at Optimedia.

“In some cases, like pizza companies, chips and soft drinks, [advertisers] spend a little bit more. You have decent-sized categories that are recession-proof.”

Most forecasters say it’s too early to predict if advertising demand will still be strong by the time the upfront rolls around, typically in June. Forecasts for upfront spending will start coming out in the next few weeks.

As it is, the outlook for ad spending on network TV for the full year is still decent, if not great, according to forecasters. Expenditures are projected to increase 2.7 percent over full-year 2007, according to a forecast issued last month by TNS Media Intelligence.

There is one major concern for the networks, though.

Ratings held up quite well through much of the strike.  But over recent weeks they've taken a steep tumble. If that continues, some advertisers may shift money to other media, says Louis Roloff, vice president and group director of video investment and activation at MediaVest.

“The strike may have accelerated ratings erosion,” he says. “That got smart advertisers to think about looking at other media. The strike got people thinking down that path, and that could affect spending.”

What will change in this year’s upfront ad market is the glitz that typically goes with it. There will likely be less of it.

Each March the networks typically preview shows in development at big meetings in Los Angeles. This year they'll host face-to-face meetings with media buyers instead.

As for May upfront presentations, they’ll go on as usual, despite some talk they’d be canceled this year. Most of the networks confirmed yesterday that they’ll preview fall lineups to media buyers. But there will be fewer parties and fewer shows.

“You may not see 12 new shows and six midseason replacements at the May meetings,” says Novenstern. “The networks will be more selective about green-lighting programs because there will be fewer of them because of the strike.”