Advertisers have been warned to expect increased media inflation in 2010 from free-to-air TV networks as they aim to recoup the heavily discounted deals they struck in early 2009.

According to a report that appeared in Businessday.com.au, Foxtel and Austar’s advertising sales unit, MCN, attempted to ambush its free-to-air rivals with an early start to making deals before the 2010 annual TV rate negotiations this week.

This week will see much of the $2.7 billion in metropolitan TV advertising allocated to TV stations for the next year.

“Media inflation is going to be a very significant issue for most advertisers next year. Demand is starting to pick up and naturally the free-to-air networks drive their prices up. The key driver, though, is the networks lowered their [advertising rate] baseline massively and advertisers got some tremendous deals – negative 10% in many cases,” said MCN chief executive Anthony Fitzgerald.

Pay TV has been under pressure in recent months because of concerns about how its audiences and revenues will hold up as new digital channels are launched by free-to-air broadcasters in time for the 2010 deal-making season.