Trump’s Reliance on Free Media Coverage Puts Strain on Local Stations

How much poorer will we, as a nation, be at the end of this presidential election? In terms of emotional or psychological cost, it’s impossible to know. But in terms of lost television advertising dollars, we will be $300 million to $400 million poorer — give or take a hundred million.

With the race winding up, projections on how much will be spent on political advertising this year are being tamped down. The culprit is Donald Trump, whose campaign has relied far more on free media coverage than on paid advertising. The impact is being felt by local television stations, which rely heavily on political spending and are already struggling against significant pressure elsewhere in their business.

S&P Global predicted last November that political ad spending on TV in 2016 would reach $3.3 billion, accounting for 14.1% of all TV ad spending for the year. Analyst Peter Leitzinger says the company will adjust that projection in November, likely to $2.9 billion or $3 billion — roughly the level of 2012. In September, Kantar Media downgraded its projection from $3.1 billion to $2.8 billion.

Trump, Leitzinger says, “is relying on real media to get his message out there. He’s just not spending what would normally be spent on TV advertising.”

Ex-Trump advisor Barry Bennett bragged to Fox News in April about free media coverage, saying, “No other candidate can talk when everybody is talking about you.”

Indeed, Trump’s campaign has proved effective at manipulating the media into handing him screen time. In September, when he promised a “major announcement” about his crusade to spread misinformation about President Obama’s birthplace, cable news outlets went live to the candidate, who spent half an hour extolling his new hotel and introducing veterans to speak on his be- half before addressing the promised subject.

“We got played again by the Trump campaign, which is what they do,” CNN’s John King said on the air afterward.

The lack of spending by Trump puts less pressure on Hillary Clinton, whose outlay is less than that of President Obama’s campaign at this time in 2012. And with Trump confirming last week that he would no longer participate in fundraisers for the Republican Party, the GOP will have a tough time raising money to pump into last-minute ads for races up and down the ballot.

The impact of the shortfall will be felt primarily at the local-station level. “Local TV is still the primary vehicle that politicians and PACs and the third-party groups will use to reach voters,” notes Kantar’s Steve Passwaiter. He identified 10 swing states that are hot spots for political spending: Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia, and Wisconsin. “If you’ve got a whole bunch of stations in battleground states, and you were expecting this onslaught of presidential dollars and a bunch of PAC dollars supporting presidential candidates, then you’re going to be sorely disappointed,” he says.

The companies with the most stations in those states are Sinclair Broadcast Group, with 18, and Nexstar, which is awaiting FCC approval on a proposed merger with Media General, with 16. Among broadcast-network owned-and-operated groups, Fox has the most stations in battleground states, with six, followed by CBS, with five.

But lower-margin businesses like pure-play local-station groups remain most vulnerable to a downward shift in political ad spending. Steve Schwaid of media consultancy CJ&N points out that 2017 will have few of the special events local stations count on to boost revenue, such as elections or the Olympics. Stations that had looked forward to a boon in 2016 had also been expecting a lean year to follow. “We’re starting to see stations getting ready for budget cuts,” Schwaid says. “The impact of this election and the lack of money coming from the Republican side is actually starting to have an impact in 2016. Stations are saying, ‘Wait a second, I’m not going to make my budget.’”

The shortfall comes against an already tough landscape for local stations. NFL games, television’s top draw, have seen ratings decline every week this season. NBC’s Summer Olympics coverage drew lower- than-expected linear TV ratings that trickled down to affiliates.

And primetime broadcast viewing this fall remains on a downward trend. This has had an outsize effect on local stations, which pay to run syndicated programming in daytime and to produce morning, afternoon, and evening newscasts. Primetime yields big audiences that come with no costs other than retransmission fees; the ad revenue is close to pure profit. But the ratings to which that revenue is pegged are winnowing amid media fragmentation.

“What’s happening now in the broader business is what happened in the print industry years ago — the bottom fell out,” says Schwaid.

If there’s an upside, it’s how Clinton’s lead over Trump has changed the electoral map, shifting money to states that are not used to seeing spending from presidential campaigns. Recent polls have seen traditional red states such as Indiana and Texas become competitive. Meanwhile, Trump’s appeal to white, working-class voters, even if it has proved too narrow to sustain a national campaign, has thrown into competition markets long considered solidly blue. Passwaiter points to recent buys by Trump in Michigan and parts of Maine.

“I think it’s probably been a while since Michigan has seen ads for a presidential election,” he says.

More Biz

  • 9-1-1: Angela Bassett in the series

    Fox Sees Primetime, Sports Ad Gains As TV Upfront Wraps

    Fox Corporation is the latest to benefit from stronger-than-expected trends in TV ad spending, as the company notched strong gains in advertising commitments for its next cycle of programming – its first since selling off a large chunk of its media assets to Walt Disney. Ad demand was stronger than many executives anticipated, according to [...]

  • BMI Promotes David Levin to Senior

    BMI Promotes David Levin to Senior VP of Digital Licensing

    BMI today announced that David Levin has been promoted to Senior Vice President of Licensing, effective immediately. In his newly expanded role, Levin is responsible for all of BMI’s domestic licensing and revenue generation, encompassing radio, television, digital media, cable, satellite and general licensing.  Levin, who will oversee teams in New York and Nashville, reports [...]

  • Warner Music Group Logo

    Warner Music Acquires Musical Theater Indie First Night Records

    Warner Music Group has acquired First Night Record, an independent record label for West End and Broadway musical theatre cast recordings. The company will be overseen by WMG’s Arts Music Division, led by President Kevin Gore. First Night co-founder John Craig will join the Arts Music team under a multi-year consulting agreement to identify and record musical theatre productions in [...]

  • Woodstock 50 to Hold Open House

    Woodstock 50 to Hold Open House for Local Residents Before Permit Review Tuesday

    If nothing else, the producers of Woodstock 50 are persistent. After two permit applications to hold the troubled festival at the Vernon Downs racetrack in Upstate New York were rejected by the town of Vernon codes office, the producers and venue owner Jeffrey Gural today invited the local community “to embrace the Festival’s spirit of [...]

  • ILM Star Wars The Force Awakens

    ILM to Open Latest Effects Facility in Sydney, Australia

    Sydney, Australia, is to be home to Industrial Light & Magic’s fifth production hub. The Disney-owned special effects company currently has facilities in San Francisco, Vancouver, London and Singapore. The decision to open the Sydney outpost was announced Monday local time by executive creative director and head of ILM Rob Bredow, ILM executive Luke Hetherington, [...]

  • Jesters: The Game Changers

    Spackman Buys Korean Film Producer Simplex

    Spackman Entertainment is to buy Simplex Films, the Korean early-stage production company behind the upcoming period comedy movie “Jesters: The Game Changers.” Spackman, an investment group with a clutch of Korean film and production businesses, has agreed a $2.43 million (S$3.3 million) all-share purchase price for Simplex. It says the acquisition will expand its film [...]

  • Chloe Dan 20th Century Fox TV

    20th Century Fox TV Drama Head Chloe Dan to Step Down

    Chloe Dan, the senior vice president of drama development for 20th Century Fox Television, is leaving her position at the studio, Variety has confirmed. Dan assumed her current role with 20th TV in 2017 and first joined the studio in 2014. Among the shows she worked on during her time at the studio are “This Is [...]

More From Our Brands

Access exclusive content