×
You will be redirected back to your article in seconds

Blue? Red? Think Green

NAB 2012

Leslie Moonves, president and CEO of CBS Corp., perhaps spoke for many a station owner in December when he summed up his take on a bonanza of 2012 political ad spending: “I’m not saying that’s the best thing for America, but it’s not a bad thing for the CBS Corp.”

A quarter of the way through the year, he is right: Stations are reaping the returns of not just a longer-than-expected Republican contest, but also the rise of the independent expenditures via SuperPACs. Election ad spending is boosting bottom lines in an industry that has yet to fully recover from a bruising recession. Signs still point to a record-setting year in broadcast political advertising, with estimates that spending on local television could hit $2.6 billion, according to the Campaign Media Analysis Group.

Stations are required to sell the lowest unit rate to candidates, so during peak periods such as the week before a primary or the month or so leading up to Nov. 6, demand may drive up prices for non-political advertisers. Stations also can charge top dollar for SuperPACs, which are not under the same restrictions as candidates. And with such independent expenditures outspending the campaigns in some of the primary states, they have proven to be even more lucrative.

What it means for station groups, particularly those with a good share of properties in swing states, is the ability to bolster balance sheets.

Bob Prather, prexy and COO of Gray Television, which has 36 stations in 30 markets, says the extra cash flow has allowed them to pay down debt. He points out that the election this year has the added advantage of being Nov. 6, almost a week into the month.

“That is huge spending those last six or seven days,” he says.

He says political ad revenue has accounted for 16% of Gray’s revenue in 2010, the highest it has ever been, and he adds it could go even higher this year. Gray’s political ad revenue reached about $57.6 million that year, a record.

This year, “It has been good, and we are ahead of where we wanted to be,” he says.

Gray has stations in such swing states as Ohio, Florida, Colorado, Michigan and North Carolina. Its three stations in Wisconsin stand to benefit not just from being a presidential battleground, but also the recall campaign against Gov. Scott Walker.

“The key is if you have got the No. 1 station (in a market), you are going to get two-thirds of the dollars,” Prather says.

Some stations have been expanding their morning newscasts — into ever earlier hours — that adds to inventory most prized by campaigns. Dennis Wharton, spokesman for the National Assn. of Broadcasters, says that as great as spending may be this cycle, it is “all over the map” on which stations will see substantial returns, even in markets where races are competitive. “You tend to see the same sort of station groups get the bulk of political revenue because of [campaigns’] laser-like focus on top newscasts,” he says.

Vincent Sadusky, president and CEO of LIN Media with 32 stations in 15 markets, says, “Some markets have outpaced and others have lagged.” But he doesn’t doubt that political ad revenue will be ever more important this year for stations.

“It has become a much more significant revenue source than it has been in the past,” he says. “In today’s digital world there are so many advertising alternatives, the reality is it is hard to get the message across in a medium where you have people’s attention.”

Political ad spending has helped LIN pay down debt and invest in interactive products and local programming, he says. One of the challenges in peak periods is how to place non-political advertisers amid tight supply, but one advantage for LIN has been that it owns two stations in most markets, giving it more flexibility in managing inventory, Sadusky says.

A caveat is that as predictable as it may seem now to discern where the hot spots will be in the fall campaign, seldom have things gone to expectations. “It never played out exactly like we think it will,” Sadusky says.

With campaigns ever more sophisticated in their polling, they also are more wise about shifting dollars at the last minute. Prather recalls that in 2008, as it became clear that John McCain would not win Ohio, Republicans pulled $800,000 worth of advertising. Democrats followed three or four days later by pulling $500,000 worth of spots. “That money went somewhere else,” he says.

In other words, it is not really a swing state until the polls open.

nab show

NAB 2012
Blue? Red? Think Green | Sarandos tweaking Netflix’s strategy | NAB fetes broadcasting’s best

More Digital

  • Fire TV News

    Amazon Launches Ad-Supported News Video App

    Amazon officially announced its long-rumored ad-supported news video service Tuesday. The new service will be available on Fire TV devices as well as Fire tablets, and rely on videos from publishers including CBS News, Reuters, Huffington Post, Bloomberg, People, Cheddar and others. News coverage served up through the app includes livestreams as well as on-demand [...]

  • Marvel-SiriusXM-podcasts

    Marvel Creating 'Substantial' Number of Exclusive Podcasts for SiriusXM

    Marvel’s Wolverine, Hawkeye, Black Widow and Star-Lord — and potentially more characters down the road — are getting their own podcasts on SiriusXM and Pandora. SiriusXM and Marvel Entertainment announced a multiyear pact under which Marvel will create a “substantial amount” of exclusive podcasts for SiriusXM and Pandora, including both scripted and unscripted series and [...]

  • Polygon

    Quibi Orders Daily Gaming-News Series From Vox Media’s Polygon

    Quibi latest idea about “essential” daily programming? A hopped-up, rapid-fire dispatch about video games and gamer culture. The mobile subscription-video startup, led by founder Jeffrey Katzenberg and CEO Meg Whitman, ordered a daily culture and gaming news show from Vox Media’s Polygon. The yet-to-be-titled series will span headlines, trend deep-dives, first-look previews of new game [...]

  • The Netflix logo is displayed at

    Netflix Stock Falls After Verizon Announces Disney Plus One-Year Giveaway

    Netflix investors, already skittish about the looming entry of Disney and Apple into the competitive streaming space, pushed the stock down as much as 4% in morning trading Tuesday. The drop came after Verizon announced a deal with Disney to offer Disney Plus for 12 months free to all unlimited wireless customers and new Fios [...]

  • Markus Stoll (Harry G), Lisa Bitter,

    Amazon Greenlights German Series Starring Comedian Markus Stoll

    Amazon Studios has greenlit a German comedy series titled “The Bedfellow” (“Der Beischläfer”) starring comedian Markus Stoll, who is popular locally for playing a funny guy named “Harry G” who satirizes life in his native Bavaria. Shooting has started in Munich on the six-part series, which is directed by  Anna-Katharina Maier (“Die Klempnerin”) and  produced [...]

  • Disney-Plus-mobile-app

    Verizon Will Give One Year of Disney Plus for Free to All Unlimited Wireless Customers

    Verizon is giving away Disney Plus — the Mouse House’s new streaming service debuting next month — free for one year to all of its wireless customers on unlimited-data plans, under a broad new partnership between the two companies. When Disney Plus launches Nov. 12, the telco will begin offering 12 months of the video-streaming [...]

More From Our Brands

Access exclusive content