Local TV Stations Are Projected Winners in Midterm Elections

With Competitive Races in House and Senate, 2010 Could Be Record-Breaking Year for Political Ad Spending

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The 2010 elections will be viewed by pundits as a test of the Obama administration's popularity, but to media companies -- particularly local TV stations -- it will be viewed as a welcome stimulus package. Between increasingly unhappy (and active) voters, close congressional races and wide open gubernatorial contests, this year could eclipse 2006's record-breaking midterm spending of $2.6 billion. The economy, of course, might drag down fundraising efforts, but that could be offset by a Supreme Court ruling on campaign funding as well as the fundraising lessons learned from the Obama campaign's use of new-media tools.

More than $20 million has already been spent on 2010 TV ads in 2009, so the ad wars are well underway. And with 26 states holding primaries before July, it is unlikely that we'll see any lulls in ad spending. Further, the nation is layered with competitive races ranging from the U.S. House, where there could be as many as 70 competitive races, to the one-third of the U.S. Senate up for election. Better yet for those selling ad space, the majority of the 37 governors' races are currently without incumbents running for reelection.

Ad spending on the state level will be driven in large part by those governors' races. There are 37 states with governors' races in 2010, including California, Colorado, Florida, Illinois, Pennsylvania, New York and Texas. With the list of open seats now greater than 20, many of these races will also have interesting and expensive primaries fueling the ad spending.

Adding an even greater significance (and more money) to these governors' races is the impending redistricting of U.S. House districts that will follow the 2010 census. With as many as 18 states possibly losing or gaining a U.S. House seat, governors become the single-most important power brokers in deciding their state's Congressional map. For this reason, the national political parties will raise and spend millions in these states to win or hold these offices. To illustrate this point, both the Republican and Democratic governors' associations are already reporting robust fundraising.

The U.S. House and Senate races in 2010 will be the political equivalent of the national stress test for the health of the Obama presidency going into 2012. For a road map to the most competitive races in the nation, you should look no further than the $300 million-plus worth of issue-ad spending in 2009. The 2009 issue-ad spending related to federal issues, such as health-care reform, cap-and-trade and card check, were largely spent in states with vulnerable U.S. Senate and House incumbents. Although health-care reform is in the end-game stage on Capitol Hill, it continues to be an issue that generates millions of dollars in ad spending in these competitive federal races.

The U.S. Senate and House are also going to provide a number of interesting and expensive races in 2010 -- many with national policy and political repercussions. Florida, Arkansas, Nevada, Connecticut, Missouri, New Hampshire, Colorado and Ohio are just a few of the states that are hosting some of the more competitive and compelling Senate races this fall. The Democrats' 60 votes in the Senate may have allowed them to push through some major policy initiatives, but that in turn will lead to a concerted effort by Republicans to pick up as many seats as possible -- especially as health-care reform and stimulus spending seem to grow increasingly unpopular with voters.

The Democrats' success in winning in traditionally Republican House districts during the last two elections has created the most competitive U.S. House races seen in the past 10 years, and many of these seats are likely to be reversed in 2010.

The question many pundits have right now is will the Democrats give back a handful or a bus-full of seats. Either way, such factors will lead to record ad-spending in a number of states.

What to watch for in 2010

One of the biggest political stories in 2009 was the rise of the "tea party" movement and its impact on the year's elections. That movement and others like it are expected to play a big role in the communication landscape this year. However, since the Reform Party failed to sustain itself on the political landscape, it is worth asking: Will the new digital media act as the glue to sustain these movements beyond the 2010 cycle?

Fundraising remains the biggest variable in 2010. Due to the economy, it is not a reach to predict that ad dollars could be off from past elections.

However, both parties have motivated base voters who are more likely to open their checkbooks. Additionally, the high stakes of these midterms and the various special interests with skin in the game will likely create plenty of money to spend on ads.

One more wrinkle on the campaign finance landscape is the imminent Supreme Court ruling that could radically change the campaign-finance laws of the land. Most Supreme Court watchers believe that the courts will make significant changes that could allow for millions more in outside money to enter the system in 2010.

Numerous new channels of voter communication, such as Facebook and Twitter, are going to be a major aspect of campaign communication, organization and, most importantly, fundraising strategy in 2010. However, in my opinion, it will still be TV ads aimed at those essential independent, undecided and late-deciding voters that will benefit from the bulk of campaign media spending. Because of this, local TV, cable and radio are still the best positioned to be the ultimate dollar winners in 2010.

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