Political clout
Television stations reap the rewards of election season
NEW YORK – For TV viewers, this cutthroat election year is a riot of attack ads and media saturation made possible by big-money donors. For TV stations, it’s a stimulus package.
One research group expects TV political spending to hit a record $3 billion, and the windfall may continue well past Election Day because regular advertisers are getting squeezed out of the schedule and could spend their ad budgets later. Coming out of a recession that put some broadcasters in or near bankruptcy protection, political spending is emerging as a critical – but temporary – source of revenue.
Several factors created the upsurge: tea party enthusiasm, self-financed millionaire candidates, an unusually high number of toss-up races and a Supreme Court ruling in January that eased rules on corporate campaign donations.
Ad rates are going up overall because political campaigns are taking up much of the commercial time. Station managers say many regular advertisers aren’t able to buy ads now. That frees up money to spend later.
“The money is much stronger than we anticipated, and we thought it would be pretty big,” said Chris Bailey, who manages ABC affiliate WOLO in Columbia, S.C. His station is benefiting from a particularly expensive House race, one where Rep. Joe Wilson – famed for his “You lie!” outburst during last year’s State of the Union address – is fighting to keep his job.
The Campaign Media Analysis Group, a unit of the consulting firm Kantar Media, projects that spending on political television ads will hit $3 billion this year. Not only would that top a record $2.4 billion spent during the last midterm elections in 2006, but it would also surpass the $2.7 billion spent in 2008, when both congressional and presidential campaigns poured cash into TV ads.
The political boon is showing up across the industry. Political advertising revenue should account for more than 11 percent of the total at local broadcast stations this year, according to Magna Global, a unit of Interpublic Group of Companies that tracks ad spending. That’s up from 7 percent in 2006.
Darrin McDonald, general manager of Fox affiliate KVVU in Las Vegas, says political revenue for the region’s TV stations is on track to hit $30 million this year, compared with $22 million in 2008.
The tea party can’t take all the credit for helping to revive the local TV business this year.
The Supreme Court in January struck down restrictions on how corporations and unions can spend money in elections. Evan Tracey, chief operating officer of the Campaign Media Analysis Group, says it could end up adding $100 million to $200 million in television spending this year, or about 3 percent to 7 percent of the projected total.
At the same time, self-financed candidates such as former eBay CEO Meg Whitman in California and Connecticut’s Linda McMahon, the former head of World Wrestling Entertainment, have spent millions of their own money to run for office. Whitman has spent a record $142 million of her own money so far.
The crunch for commercial time has been such that local affiliates of NBC and ABC have begun selling commercial slots that are ordinarily reserved for national advertisers.
Coming off an abysmal 2009, local stations need any extra cash they can get.
Excluding political ads, local broadcast TV revenue fell from $16.1 billion in 2008 to $13.8 billion last year, a decline of 15 percent, according to Magna Global. The firm predicts an overall jump of more than 20 percent this year and says nearly half that increase comes from political ads.