Decision on political ad spending may boost revs

The Supreme Court has delivered a stimulus package to local TV stations.

Broadcasters who gathered at the annual National Assn. of Television Program Executives confab in Las Vegas last week were cheering the high court’s Jan. 21 ruling striking down restrictions on corporate spending in political campaigns. The decision is expected to goose spending on local TV, cable and radio from campaigns as well as advocacy groups in support of candidates and causes.

Also lifting broadcasters spirits was the upset victory of Republican Scott Brown in the special Jan. 19 election in Massachusetts to fill the late Ted Kennedy’s U.S. Senate seat. Brown’s win is seen as giving the GOP a shot in the arm and a renewed hope at the ballot box. That, in turn, should help encourage well-heeled political donors to open up their checkbooks to help candidates in competitive state and federal races in such key states as Illinois, Texas, Ohio and Florida.

The court decision will also likely fuel the trend of wealthy individuals and candidates pursuing their own political agendas on air.

“I may not like it as a citizen but as a businessman this is great news,” said a TV station exec from Chicago (who said he voted for Obama in 2008).

The 2010 midterm election period was already shaping up to be a healthy haul for TV and radio. Evan Tracey, prexy of the Campaign Media Analysis Group at ad-tracking firm TNS Media Intelligence, says his org projected TV spending to hit the $2.6 billion to $2.8 billion range, the levels reached in 2006 and 2008, respectively. (That forecast was made with the assumption that the high court would at the very least loosen the campaign finance handcuffs.)

Tracey predicts that the lack of restrictions will spur ads to arrive earlier in the election cycle and the content of those blurbs will certainly be more pointed, now that the court has nixed restrictions on how issue ads can be worded.

“You’ll see (advocacy) groups strategically going on air before the candidates go on air to try and define the issues” at stake, Tracey says. “Everybody will get a much earlier start because you’re not going to have to budget your resources as much to get to election day.”

Despite the previous limits, plenty of money had been making its way into candidates’ coffers, political action committees and advocacy groups. But there were restrictions in place that slowed down the flow of coin that could be committed immediately to local media. “What the court decision does is take what had been a revolving door and remove the door altogether,” Tracey says.

As primary and general election dates approach, there will be so much money chasing a finite number of spots on local broadcast stations, particularly Big Four network affiliate stations, that local cable and radio stations are likely to get a boost from the spillover, Tracey predicts.

The deluge couldn’t come at a better time for local stations. After a brutal 2009, station toppers are cautiously optimistic that the worst of the advertising falloff is over, but it’ll still take years to recover from the 20%-40% declines suffered in many large markets. The influx of political cash will undoubtedly push some stations’ regular customers to the sidelines until the election cycle is over — which only gives broadcasters something to look forward to in the height of the holiday shopping season.

Follow @Variety on Twitter for breaking news, reviews and more
Post A Comment 0