Election ads big money for television

By Andrew Vanacore

Associated Press

Published: Friday, Oct. 29 2010 9:22 p.m. MDT

NEW YORK — For TV viewers, this cutthroat election year is a riot of attack ads and media saturation made possible by big-money donors. For TV stations, it's a stimulus package.

One research group expects TV political spending to hit a record $3 billion. The windfall may continue well past Election Day because regular advertisers are getting squeezed out of the schedule and could spend their ad budgets later. Coming out of a recession that put some broadcasters in or near bankruptcy protection, political spending is emerging as a critical — but temporary — source of revenue.

Several factors created the upsurge: tea party enthusiasm, self-financed millionaire candidates, an unusually high number of toss-up races and a Supreme Court ruling in January that eased rules on corporate campaign donations.

Ad rates are going up overall because political campaigns are taking up much of the commercial time. Station managers say many regular advertisers aren't able to buy ads now. That frees up money to spend later.

"The money is much stronger than we anticipated, and we thought it would be pretty big," says Chris Bailey, who manages ABC affiliate WOLO in Columbia, S.C. His station is benefiting from a particularly expensive House race, one where Rep. Joe Wilson — famed for his "You lie!" outburst during last year's State of the Union address — is fighting to keep his job.

The Campaign Media Analysis Group, a unit of the consulting firm Kantar Media, projects that spending on political television ads will hit $3 billion this year. Not only would that top a record $2.4 billion spent during the last midterm elections in 2006, but it would also surpass the $2.7 billion spent in 2008, when both congressional and presidential campaigns poured cash into TV ads.

The political boon is showing up across the industry. Political advertising revenue should account for more than 11 percent of the total at local broadcast stations this year, according to Magna Global, a unit of Interpublic Group of Companies that tracks ad spending. That's up from 7 percent in 2006.

Darrin McDonald, general manager of Fox affiliate KVVU in Las Vegas, says political revenue for the region's TV stations is on track to hit $30 million this year, compared with $22 million in 2008. (He declined to offer specific figures for his own station.)

That's all the more welcome in a state where economic troubles have taken a big bite out of local advertising budgets. In Nevada, home prices have fallen more than 50 percent from their highs — among the worst in the nation. The state still has an unemployment rate of 14.4 percent, almost five percentage points above the national average of 9.6 percent.

"Political advertising has been a gigantic Band-Aid for this market," McDonald says.

He can largely thank Senate Majority Leader Harry Reid and tea party challenger Sharron Angle.

According to the Center for Responsive Politics, a campaign finance watchdog group, the candidates and outside interest groups have spent more than $58 million combined. Much of that went to television. That's about seven times what Reid and his GOP rival at the time spent in 2004.

Reid-Angle is one of 47 tossup races in the House and Senate, compared with 35 tight races around this time during the 2008 campaign and 25 back in 2006, according to the Cook Political Report.

The tea party can't take all the credit for helping to revive the local TV business this year.

The Supreme Court in January struck down restrictions on how corporations and unions can spend money in elections. Evan Tracey, chief operating officer of the Campaign Media Analysis Group, says it could end up adding $100 million to $200 million in television spending this year, or about 3 percent to 7 percent of the projected total.

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