Stations bulking up on Arnold’s recall run

Webs, indies stand to gain from election circus

Arnold Schwarzenegger’s run for the state house in the gubernatorial recall election should provide a much-needed shot in the arm for election-dollar deprived California TV stations.

According to analysts at investment bank Legg Mason, the recall circus could add another $75 million in ad spending on local TV, sprucing up many stations’ bottom lines.

Among the beneficiaries will be station owners in Los Angeles, San Francisco, Sacramento, San Diego and Fresno, where Viacom, Fox Disney and NBC all operate.

In addition, indie station owners Hearst-Argyle (with NBC and WB stations in Sacramento and Monterey) and Young Broadcasting (NBC affil KRON in San Francisco) also stand to gain.

With a field including Hustler magazine founder Larry Flynt, political pundit Arianna Huffington, former child star Gary Coleman, former baseball commissioner Peter Ueberroth and Lt. Gov. Cruz Bustamante, TV is bound to figure prominently in the contest. Media-savvy Schwarzenegger, who is financing his own campaign, is likely to provide a large chunk of the windfall –even more so if several major Democratic candidates wind up entering the whirlwind race.

With the election currently slated for Oct. 7, TV spot spending is expected to begin in earnest. In fact, Republican Rep. Darrell Issa had already begun airing TV ads two weeks ago, though he stepped out of the running last week.

In the 2002 election campaign, the state of California generated an estimated $138 million in political TV ad spending, the largest amount of any state.

Legg Mason reckons that given the well-financed challengers, the 2003 election recall should easily generate at least half that amount as candidates push up airtime prices in pursuit of prime slots.

Some 12% of KRON sales were derived from political ads in 2002, while the San Francisco station represents almost 50% of total Young Broadcasting sales nationwide. For its part, Hearst-Argyle took some 8% of total California political revenue last year.

Politicians also tend to pay in cash, so broadcasters are rarely stuck with receivables from “deadbeat” candidates, Legg Mason analyst Sean Butson noted on Friday.