Broadcasters are attracting record political advertising from the Republican presidential primaries, a super PAC-driven windfall that will grow in the general election.
The biggest winners through the fall campaign will be the media companies with TV stations in the 12 closely divided swing states identified by Gallup. Hearst has 12 battleground-state outlets, CBS Corp. has 10, Gannett and Gray Television each own 8, News Corp.and E.W. Scripps each have 5, and Comcast's NBC and Walt Disney Co.'s ABC each own 2.
"There's going to be a lot of money spent," CBS CEO Leslie Moonves said in December. "I'm not saying that 's the best thing for America, but it's not a bad thing for the CBS Corporation."
And then there's Lin TV Corp., the Providence, R.I.,-based owner of 17 stations in the 12 swing states. The company may see revenue rise 12% to a record $457 million this year.
The spending is fueled by court rulings including the U.S. Supreme Court's 2010 Citizens United decision, which abolished limits on independent outlays by unions and corporations. By the Nov. 6 election, campaigns will have spent $2.6 billion, with 85% going to local TV, Anthony DiClemente, a Barclays Capital analyst in New York, estimated in a Jan. 31 report.
"TV stations will be the biggest beneficiary," Mr. DiClemente said in an interview. "It's a heated political environment and the relaxation of campaign finance laws is driving it all."
Candidates and their super political action committees spent about $40 million combined on ads in Iowa, New Hampshire, South Carolina and Florida, said Brad Adgate, research director at ad buyer Horizon Media . In South Carolina, Republicans spent $13 million, compared with $7 million in 2008, Mr. DiClemente said.
Competition for the Republican nomination is keeping the money flowing. A super PAC backing Newt Gingrich, who won the South Carolina primary on Jan. 21, received $10 million from billionaire Sheldon Adelson, chairman of Las Vegas Sands Corp., and his wife. That was after super PACs allied with Mitt Romney, the leader in national polls, ran negative ads in Iowa that hurt Gingrich's support.
Even bigger outlays forecast for the general election led Mr. DiClemente to project a 15% rise in campaign-ad spending from 2010's regional contests and a 45% increase from the 2008 presidential year.
The Democratic Party will nominate President Barack Obama for a second four-year term at its convention in Charlotte, N.C., starting Sept. 3.
The campaign of the president, who opposed the Citizens United decision, asked supporters to donate to a Democratic super PAC this week. "It's not just the presidential elections that will spend a lot," Mr. DiClemente said. "Super PACs will contribute to local races, too."
Republicans will meet in Tampa, Fla., starting Aug. 27 to nominate their presidential candidate. Florida and North Carolina are among the dozen states that will be the focus of advertising by Obama and his Republican challenger, according to Gallup. Ohio, Pennsylvania, Colorado, Nevada, Michigan, New Hampshire, Iowa, New Mexico, Virginia and Wisconsin are other swing states.
CBS will receive about $230 million in political advertising this year, Mr. DiClemente estimated in the note. Without political ads, CBS's broadcast revenue would be unchanged from a year ago, he wrote.
Advertising from political campaigns has become Lin TV's biggest growth category, CEO Vincent L. Sadusky said at an investor conference in December.
"Fortunately for us, if you want to get elected in America, you do need to advertise," Mr. Sadusky said. "Political has been very, very strong in the last couple of cycles and we anticipate it to be very strong going forward."
-- Bloomberg News --